HomeMy WebLinkAboutItem 16- CDBG Substantial Amendments AGENDA ITEM SUMMARY Meeting Date: 6/17/2024
Meeting Type: Regular Meeting
Staff Contact/Dept.: Erin Fifield / DPW
Staff Phone No: 726-2302
Estimated Time: 5 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: Encourage Economic
Development and
Revitalization through
Community Partnerships
ITEM TITLE: COMMUNITY DEVELOPMENT BLOCK GRANT SUBSTANTIAL
AMENDMENTS
ACTION
REQUESTED:
Motion to approve/not approve the proposed substantial amendments to the
Community Development Block Grant Fiscal Year 2022 and Fiscal Year 2023
Annual Action Plans and authorize the City Manager to execute all documents
needed to give effect to the City’s agreement with the U.S. Department of Housing
and Urban Development for these funds.
ISSUE
STATEMENT:
These substantial amendments would reallocate $470,494 in funds previously
awarded to Catholic Community Services of Lane County (CCSLC)’s OASIS day
center construction project for homeless families with children. The City is at risk
of losing CDBG funds if they are not spent quickly. This project has experienced
delays and is currently not ready to proceed. Amending these plans would
reallocate funds toward projects ready to proceed.
ATTACHMENTS: 1. Council Briefing Memo
DISCUSSION/
FINANCIAL
IMPACT:
Per HUD regulations, CDBG funds need to be spent in a timely manner otherwise
those funds are at risk of being recaptured by HUD.
Given the need to spend funds quickly, Council directed staff during the April 22
work session to move forward with a substantial amendment to prior year plans to
reallocate the funds previously awarded to CCSLC for the OASIS project.
Subsequently, city staff published the proposed substantial amendments for public
comment for 30 days, and the City’s Community Development Advisory
Committee (CDAC) held a public hearing on the proposed amendment during their
May 29th meeting.
The CDAC heard from 9 people during the public comment period and public
hearing, as well as City staff on other identified needs, and is recommending
Council allocate funds to the following strategies that would be able to spend the
funds quickly:
• Repaying Section 108 loan.
• Supporting architectural and pre-development costs for eligible projects
that support human services.
• Promoting economic development through microenterprise business
support.
It was also discussed during the May 29th CDAC meeting that additional CDAC
funds will need to be reallocated this fall from programs that are spending funds
down slowly and do not need their full allocation. Staff estimate $200,000 –
300,000 may be available in the fall. The CDAC further recommends the City
reallocate the full amount of what will be available this Fall toward rehab for low-
income rental housing developments and issue a Request for Proposals to award
those funds.
M E M O R A N D U M City of Springfield
Date: 6/17/2024
To: Nancy Newton COUNCIL
From: Jeff Paschall, Community Development Division
Director
Erin Fifield, Community Development Analyst
BRIEFING
Subject: COMMUNITY DEVELOPMENT BLOCK
GRANT SUBSTANTIAL AMENDMENTS
MEMORANDUM
ISSUE: These substantial amendments would reallocate $470,494 in funds previously
awarded to Catholic Community Services of Lane County (CCSLC)’s OASIS day center
construction project for homeless families with children. The City is at risk of losing CDBG
funds if they are not spent quickly. This project has experienced delays and is currently not
ready to proceed. Amending these plans would reallocate funds toward projects ready to
proceed.
COUNCIL GOALS/
MANDATE:
Encourage Economic Development and Revitalization through Community Partnerships
BACKGROUND:
Per HUD regulations, CDBG funds need to be spent in a timely manner otherwise those funds
are at risk of being recaptured by HUD.
The oldest CDBG funds we have allocated right now were awarded spring of 2021 and 2022 to
Catholic Community Services of Lane County (CCSLC) for a construction project to build a day
center for their OASIS program serving homeless families with children. This project has had
several delays over the past few years (including a HUD environmental review that is still
underway, increased construction costs that have created a financing gap, and staff turnover at
CCSLC). CCSLC continues to support this project, but it is currently not ready to proceed.
Given these delays, it is not likely that this project would be completed in the next year.
A proposed Substantial Amendment to prior year CDBG Action Plans was publicized and went
through a public process for consideration.
As part of the Citizen Participation Plan through the Eugene-Springfield Consolidated Plan,
there are procedures to follow when the City is considering amending a CDBG Action Plan. As
part of our substantial amendment process:
• The City published a legal notice in the Register Guard that the City was considering a
reallocation of funds.
• The substantial amendment was made public on the SpringfieldOregonSpeaks website
for 30 days for the public to comment.
o City staff received emails from 4 local low-income affordable housing providers
expressing the need for funds for capital improvements, including roof
replacements, ductless HVAC installation, staircase repairs, and fencing
replacement.
• City staff discussed potential needs or activities that could help spend the funds down
Attachment 1
Page 1 of 4
MEMORANDUM 6/13/2024 Page 2
o Staff identified the opportunity to use CDBG funds to pay off the City’s Section
108 loan with HUD. The City currently has a Section 108 loan outstanding with
HUD for approximately $165,430.35. [The loan was made in 2009 to help
DevNW purchase their existing building on Main Street, which holds four units
of low-income qualified housing on the 2nd floor.] The City can use CDBG
funds to pay off this loan early. Meanwhile, DevNW will continue to make their
loan payments as planned; those payments will then be receipted in as CDBG
program income and can be used for future CDBG projects.
o The City has identified a need to provide accessible bathrooms at City Hall, and
are proposing to redesign/construct new bathrooms that remove accessible
barriers to mobility. City could use CDBG funds for the design costs, estimated
at $50,000. The City has about $200,000 available for the cost of construction.
• The CDAC held a public hearing on May 29th to consider any public comment on the
proposed changes. 5 people spoke during the public hearing:
o Three people spoke about the Early Child Care Business Accelerator Program at
Lane Community College (LCC). That program offers business training and
support for new and expanding in-home childcare businesses in Lane County. A
$5,000 grant per graduate of the 4-month program would help them start new
childcare businesses. Staff estimate there will be 8 graduates of the program in
the next 6 months.
o Two people spoke from Plaza de Nuestra Comunidad (Plaza), a Latinx-serving,
culturally specific, bilingual community service provider in Lane County. Plaza
is the new combined nonprofit of Centro Latino Americano, Downtown
Languages, and Huerto de la Familia. Plaza shared that they have bought a
building in Springfield to establish a wellness center offering treatment
programs, mental health services, and family support. They are renovating the
building this fall and are in need of $250,000 in non-construction funding (e.g.
architectural and engineering costs) to complete the project.
The CDAC recommends Council substantially amend the Fiscal Year 2022 and Fiscal Year
2023 CDBG Annual Action Plans.
The CDAC voted in favor of recommending that Council substantially amend the Fiscal Year
2022 and Fiscal year 2023 CDBG Annual Action Plans in order to reallocate funds toward
needed projects which could spend down funds quickly.
Prior
Year
Action
Plan
Amount
to be
Amended
Prior Year Allocated
Strategy
CDAC’s Recommended Amendment
FY2022 $ 322,492 Support a human
services delivery
system (i.e. CCSLC’s
OASIS day center
construction project)
Reallocate funds toward the strategies:
• $259,000 to “Support a human
services delivery system” (i.e.
architectural and pre-development
costs for eligible projects)*
• $46,063 to “Promote economic
development” (i.e. microenterprise
business support)*
• $17,428.35 to “Increase the supply of
affordable housing” (i.e. repayment
of City’s Section 108 loan)
Attachment 1
Page 2 of 4
MEMORANDUM 6/13/2024 Page 3
FY2023
$ 148,002 Support a human
services delivery
system (i.e. CCSLC’s
OASIS day center
construction project)
Reallocate funds toward the strategy:
• $148,002 to “Increase the supply of
affordable housing” (i.e. repayment
of the City’s Section 108 loan)
*Funding for these strategies include the cost of City staff to carry out this activity.
Addressing the need for funding for rental rehab
It was also discussed during the May 29th CDAC meeting that additional CDAC funds will need
to be reallocated this fall from programs that are spending funds down slowly and do not need
their full allocation. Staff estimate $200,000 – 300,000 may be available in the fall. Erin stated
that the Tree Planting Program won’t spend all its allocated funds. The Home Repair program is
likely overallocated given spending thus far on the program in FY25. And the SHOP program
also has uncertainty; the program has not issued a loan since issuing three (3) in the month of
December.
The CDAC further recommends the City reallocate the full amount of CDBG funds that will be
available this Fall toward rehab for low-income rental housing developments and issue a
Request for Proposals (RFP) to award those funds. The CDAC agreed that an RFP would allow
the City to be transparent with the funds available and conduct outreach to eligible applicants to
apply for funds.
City staff support the CDAC’s recommendation
City staff support the CDAC’s recommendation, particularly regarding funding rental rehab
needs with a substantial amendment later this fall. The CDAC’s recommendation to award funds
first for non-construction activities allows for those funds to easily be awarded and contracted
out, while also supporting community projects that are happening now. The recommendation to
award additional funding this fall just for rental rehab construction needs also allows City staff
time to issue an RFP and the capacity to be more efficient in addressing those needs.
Next steps
If the proposed substantial amendments are approved, staff will do the following over the
summer:
o Work with HUD to repay the Section 108 loan with CDBG funds
o Develop a program with LCC’s Early Childhood Business Accelerator to award
eligible microenterprise businesses with grant money to help start their business
o Contract with Plaza to award non-construction funds to help renovate their recently
purchased Wellness Center
o Prepare / distribute an RFP for eligible rental rehab projects
o Initiate a substantial amendment to prior year CDBG Action Plans to reallocate
funds toward the strategy to “Rehab the existing housing stock” in order to support
rental rehab. As part of the substantial amendment process, the CDAC will
reconvene to hold a public hearing and make a recommendation to Council on
funding allocations. The final decision will come back to Council at a regular
session.
Attachment 1
Page 3 of 4
MEMORANDUM 6/13/2024 Page 4
RECOMMENDED ACTION: Approve the Community Development Advisory Committee’s
recommendation to substantially amend the Community Development Block Grant Fiscal Year
2022 and Fiscal Year 2023 Annual Action Plans.
Attachment 1
Page 4 of 4