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HomeMy WebLinkAboutItem01 Community Development Block Grant (CDBG) Update AGENDA ITEM SUMMARY Meeting Date: 1/22/2018 Meeting Type: Work Session Staff Contact/Dept.: Erin Fifield/DPW Staff Phone No: 726-2302 Estimated Time: 20 minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Mandate ITEM TITLE: COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) UPDATE ACTION REQUESTED: Approve a draft FY2019 CDBG One Year Action Plan to be published for public comment. ISSUE STATEMENT: Each year, the City receives federal Community Development Block Grant (CDBG) funds from the US Department of Housing and Urban Development (HUD). The City must allocate CDBG funds through a One Year Action Plan to indicate how the City intends to address the strategies identified in the Eugene- Springfield Consolidated Plan. ATTACHMENTS: ATT1 – Council Briefing Memo DISCUSSION/ FINANCIAL IMPACT: The Springfield Community Development Advisory Committee (CDAC) met on January 4, 2018 to discuss potential strategies for the allocation of 2018-2019 CDBG funds, and has made a recommendation to Council for a One Year Action Plan for Fiscal Year 2019. Next steps: Following Council’s direction, staff will publish the draft One Year Action Plan for public comment. In April, the CDAC will meet to hold a public hearing on the draft plan, and will make a final recommendation to Council for the allocation of funds. Thereafter, Council will be asked to adopt a final CDBG FY19 One Year Action Plan for submission to HUD. M E M O R A N D U M City of Springfield Date: 1/22/2018 To: Gino Grimaldi COUNCIL From: Anette Spickard Erin Fifield BRIEFING Subject: CDBG UPDATE MEMORANDUM ISSUE: Each year, the City receives federal Community Development Block Grant (CDBG) funds from the US Department of Housing and Urban Development (HUD). The City must allocate CDBG funds through a One Year Action Plan to indicate how the City intends to address the strategies identified in the Eugene-Springfield Consolidated Plan. COUNCIL GOALS/ MANDATE: Council Goals: Mandate BACKGROUND 2015 Eugene-Springfield Consolidated plan This 5-year regional strategic plan for housing and community development, required by the US Department of Housing and Urban Development (HUD) to receive CDBG funds, sets the goals and activities for the use of CDBG and HOME funds. The Consolidated Plan relied on the analysis of qualitative and quantitative data from the US Census, Lane Livability Consortium, interviews and surveys with over 50 local agencies and non-profit human service providers, and participation and comments from the community to identify housing, homeless, and community development needs and trends. The 2015 Consolidated Plan developed the following seven (7) strategies to address the priority needs of low-income residents it identified: 2015-2020 Eugene-Springfield Consolidated Plan strategies 1. Increase the supply of affordable housing 2. Rehabilitate existing housing stock 3. Provide down-payment assistance for home ownership 4. Remove barriers to affordable and supportive housing 5. Support a human services delivery system 6. Promote economic development and employment opportunities 7. Make strategic improvements to improve low income neighborhoods One Year Action Plan Each year, the City is entitled to receive an allocation of CDBG funds from HUD o In Fiscal Year (FY) 2018, Springfield received an allocation of $486,236 o The President’s proposed budget does not include any funding for the CDBG program, but so far Congress has not eliminated CDBG funding from the budget o In order to receive CDBG funds, the City must develop a One-Year Action Plan describing how it plans to allocate funds to address local community needs MEMORANDUM 1/18/2018 Page 2 o The proposed uses of funding must align with allowed uses of funds and with the local community needs and strategic plan identified in the 2015 Eugene-Springfield Consolidated Plan o The City must submit to HUD its One Year Action Plan for FY19 CDBG funds by May 2018; funds for FY19 would be made available July 1, 2018. OVERVIEW OF ONGOING CDBG PROGRAMS Of the seven (7) Consolidated Plan strategies, the City has provided ongoing funding through its One Year Action Plan for three (3) particular strategies for over 20 years, as well as administration and planning: Rehab existing housing stock (Springfield Emergency Home Repair program) Provide downpayment assistance for homeownership (SHOP program) Support a human services delivery system (contribution to the Lane County Human Services Commission) Emergency Home Repair (EHR) Program – Springfield’s EHR program provides urgent home repair services as a grant (up to $5,000 over 5 years) to very low-income Springfield homeowners. City staff coordinate efforts with the following agencies: Housing and Community Service Agency of Lane County (HACSA), LCOG Senior and Disability Services, Habitat for Humanity, Springfield Utility Board, Catholic Community Services, local hospitals, local contractors, and managers of manufactured home parks. Program staff costs to comply with HUD requirements include: inspecting the home, processing applications, conducting an environmental review, coordinating work orders, verifying completed work. Staff continue to explore ways to conduct outreach and make the program more efficient. Springfield Homeownership Program (SHOP) – Springfield’s SHOP program assists low-income residents with the first-time purchase of a home by providing an interest-free loan, up to $7,000, toward the down payment and related costs of buying a qualified home in Springfield. Springfield’s SHOP was originally funded with HOME funds; as HUD requirements changed, SHOP is now funded with CDBG funds; the program had to be retooled in FY2016 to comply with different requirements. EHR Cash Flow FY14 FY15 FY16 FY17 FY18 Beginning Cash -$ 52,452$ 92,087$ 144,824$ 146,624$ Annual Allocation 167,168$ 155,749$ 141,604$ 110,000$ 55,000$ TOTAL available 167,168$ 208,201$ 233,691$ 254,824$ 201,624$ Expenses*114,716$ 116,115$ 88,867$ 108,199$ 116,337$ Remainder*52,452$ 92,087$ 144,824$ 146,624$ 85,287$ # units rehabbed*26 49 52 60 60 *estimated for FY18 MEMORANDUM 1/18/2018 Page 3 Contribution to the Human Services Commission (HSC) – Springfield allocates CDBG and General Fund dollars to support a human services delivery system administered by Lane County. The HSC is an intergovernmental commission comprised of Springfield, Eugene, and Lane County elected officials and budget committee members to address basic needs of low- income residents o Springfield, Eugene, and Lane County pool their state and federal grants and general funds contributions to contract with public and nonprofit human service providers In FY2018, Springfield contributed $73,204 in CDBG funds and $132,600 in General Funds to the HSC. o CDBG funds supported staff costs at Catholic Community Services, Food for Lane County, Relief Nursery, and Womenspace; these funds do not pay for Lane County staff costs. HUD caps the amount of CDBG funds that can be spent on public service at 15%. Springfield contributes this amount to the Human Services Commission (HSC), which distributes these funds to help various non-profit service providers pay for staff costs to serve Springfield residents. G Street OASIS– This program is a collaboration of multiple organizations aiming to provide homeless families with children with access to a set of coordinated services offered at multiple locations within the immediate G Street neighborhood in Springfield. o For use in FY 2017, the City received CDBG program income beyond its Entitlement Funds, and allocated 15% to the G Street OASIS program o For this current fiscal year, the City did not have additional CDBG program income to allocate, and allocated $25,000 out of its General Fund toward the G Street OASIS. Grant Administration and Planning – The City of Springfield uses CDBG funds to pay for staff costs to administer the CDBG program. The HUD requirements to administer the CDBG program includes planning for the Consolidated Plan, One-Year Action Plans, subrecipient monitoring, program management, coordination with other agencies, environmental review compliance, federal reporting, and ongoing evaluation of the program itself. Additional planning and strategic efforts by City staff for housing and community development activities assisted with CDBG or HOME funds are also eligible for reimbursement with CDBG administrative costs. The CDBG program limits reimbursement for program administrative costs to 20% of the City’s annual allocation. As CDBG entitlement funds have decreased over the years, so have the City’s available resources for administration and planning. It is estimated that staff administration and planning costs for FY19 will be $164,000. SHOP Cash Flow FY16 FY17 FY18 Beginning Cash -$ 91,337$ 123,832$ Annual Allocation 100,000$ 100,000$ 50,000$ TOTAL AVAILABLE 100,000$ 191,337$ 173,832$ Expenses*8,663$ 67,505$ 85,611$ Remainder*91,337$ 123,832$ 88,221$ # households assisted*1 9 10 *estimated for FY18 MEMORANDUM 1/18/2018 Page 4 UPDATE ON RECENTLY FUNDED CDBG PROJECTS Housing and Community Services Agency (HACSA) – Glenwood Place In FY13, the City allocated $81,580 in CDBG funds (and close to $400,000 in HOME funds) toward Glenwood Place, the future site of 150 units of affordable housing In FY15, HUD determined there were regulatory violations, and the Cities of Eugene/Springfield (as part of the HOME consortium) would need to complete an Environmental Assessment and submit a waiver request to HUD before spending any future CDBG or HOME federal funds on this site. In December 2017, HUD granted the regulatory waiver! Once the release of funds has been granted, HACSA has indicated they will purchase the site, and may request CDBG / HOME funds when they are closer to proceeding. Neighborhood Economic Development Corporation (NEDCO) – Sprout! food hub NEDCO’s Sprout! building needed an upgraded fire suppression system in order to comply with the change of use as a restaurant incubator and event space. A total of $142,500 in CDBG funds was allocated toward this project. Over the past 7 years, over $500,000 in CDBG grant funds was allocated to Sprout! The project was completed in February 2017. In October 2017, NEDCO sold the Sprout! building, As a HUD requirement, NEDCO must repay a portion of the CDBG funds invested as NEDCO can no longer meet the objectives on which the funds were granted; that repayment is reflected in the draft FY19 One Year Action Plan. Development and Public Works (DPW) – Neighborhood improvements In FY16, City Council awarded $278,199 in CDBG funds toward neighborhood improvements in low-income neighborhoods. In early 2017, the City completed the 13th Street sidewalk connector project by creating a paved, lit path between Centennial Boulevard and Willamalane Park, including a crosswalk and pedestrian-activated flashing beacon at Centennial. The project also included upgrading street lights from yellow sodium to LED in the surrounding areas between Pioneer Parkway and Mohawk Boulevard. Increasing the supply of affordable housing In Spring 2017, Council additionally allocated FY18 CDBG funds toward acquisition, site improvements, and/or other activities to create new affordable housing units. As part of the City’s affordable housing strategy, Council indicated support for securing property for residential development by using CDBG funds for acquisition and preparation of properties for new housing units. In summer-fall 2017, staff identified publicly-owned property that could be available for new housing units, issued a Request for Information (RFI) to developers on one particular site, and plan to discuss the results of that RFI on January 22nd. Given the limited availability of public-owned land suited to residential development, staff will also focus toward acquiring property and land for the purposes of future development. MEMORANDUM 1/18/2018 Page 5 FY 2019 CDBG ONE YEAR ACTION PLAN POTENTIAL REVENUES CDBG REVENUES (estimated) Amount FY 2018-2019 Entitlement Funds $ 486,000 Program Income $ 186,000 TOTAL $ 672,000 CDAC RECOMMENDATION: The Community Development Advisory Committee (CDAC) met on January 4, 2018 to make a recommendation to Council for allocation of FY19 CDBG funds. The CDAC’s discussion centered on balancing funding for the EHR and SHOP programs, along with the need to increase the supply of affordable housing. The CDAC was comfortable allocating a lower amount for Emergency Home Repair (EHR) and the down payment assistance program (SHOP) for FY19 because there is sufficient carryover of funds from past years which are still available to use for those programs. With the CDAC’s recommended allocation, the estimated totals available for both the EHR and SHOP programs match the estimated expenses for FY19. Reducing the allocations this year is not anticipated to impact the City’s ability to meet requests for these programs due to the accumulated carryover. The CDAC also recommends that should the anticipated revenues change from this draft, any changes to the expenditures should match the percentages of the allocation as a proportion of the total as drafted. CDGB EXPENDITURES (estimated) Anticipated carryover funds CDAC FY19 allocation recommendation Estimated TOTAL available (FY19 + previous funds) Consolidated Plan Strategy Activity Amount Amount Amount 1. Increase the supply of affordable housing Acquisition, improvements, etc. TBD $390,000 (58%) $390,000 + TBD 2. Rehabilitate existing housing stock affordable to low-income persons Emergency Home Repair Program (EHR) $85,287 $30,000 (4%) $115,287 CDGB EXPENDITURES (estimated) Anticipated carryover CDAC FY19 allocation Estimated TOTAL available (FY19 + MEMORANDUM 1/18/2018 Page 6 funds recommendation previous funds) 3. Provide down payment assistance for home ownership Springfield Homeownership Program (SHOP) $88,221 $20,000 (3%) $108,221 4. Remove barriers to affordable and supportive housing Support programs that assure housing opportunities are provided without discrimination. $0 $0 $0 5. Support a human services delivery system to address the needs of homeless persons and special needs populations Human Services Commission (HSC) contribution (15% max) $0 $97,000 (15%) $97,000 6. Promote economic development and employment opportunities Economic development; workforce training $0 $0 $0 7. Make strategic improvements to improve low income neighborhoods Public improvements in sidewalks/ streets; Downtown set- aside for improvements $0 $0 $0 Grant Administration (20% max) $0 $130,000 (20%) $130,000 TOTAL $173,508 + TBD $672,000 (100%) $845,000 + TBD RECOMMENDED ACTION: Approve a draft CDBG FY19 One-Year Action Plan to be published for public comment.