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C ITY O F SAN L U I S O B I S P O
FROM: John Mandeville, Community Development Directq /�
Prepared By: Tyler Corey, Associate Planner
SUBJECT: CONSIDERATION OF 2011 COMMUNITY DEVELOPMENT BLOCK
GRANT (CDBG) FUNDING RECOMMENDATIONS.
RECOMMENDATION
I) As recommended by the Human Relations Commission (HRC), adopt a resolution
to approve funding recommendations for $647,517 of CDBG funds for the 2011
Program Year for projects proposed by CAPSLO, City of San Luis Obispo and
Habitat for Humanity.
2) Reallocate $6,205 of unexpended 2006 and 2007 CDBG funds from completed
projects for the City of San Luis Obispo ADA Corrections City Facilities, Prado
Day Center Improvements and Anderson Hotel Fire Sprinkler System Upgrade to
the City of San Luis Obispo Property Acquisition for Affordable Housing (31 3)
South).
DISCUSSION
Situation
The City's annual CDBG review process provides Council and the public with an opportunity to
provide early input in the grant award process and assists Council with prioritizing community
needs. The focus is on maintaining an open, inclusive and fair grant application process. The
HRC is the advisor to the Council on community needs and funding recommendations. The four
major steps in the CDBG review process are as follows:
I. HRC hosts a "Needs Workshop": The HRC hosted a public hearing on September 1, 2010,
to inform the public about upcoming funding amounts, how to apply for grants and to receive
community input on grant funding needs.
2. Council priority-setting hearing: On October 5, 2010, the Council held a public hearing to
consider the HRC's recommendation and adopted funding priorities for 2011.
3. CDBG applications hearing: On December 1, 2010, the HRC held a public hearing to
review the 2011 CDBG applications with respect to the Council's adopted funding priorities,
and forwarded its funding recommendations for inclusion in the 2011 Draft Action Plan.
4. CDBG Program hearing: On March 1, 2011, the City Council will hold a public hearing to
consider the HRC's recommendation as shown in the Draft Action Plan and adopt funding
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2011 CDBG Funding Recommendations Page 2
recommendations for the 2011 CDBG Program Year. This action will be submitted to the
County Board of Supervisors for inclusion in the final 2011 CDBG Action Plan for the San
Luis Obispo Urban County.
On October 5, 2010, the City Council adopted the following priorities for allocating CDBG funds
during the 2011 CDBG Program Year:
1. Develop and enhance affordable housing for low and very-low income persons.
2. Emergency and transitional shelter, homelessness prevention and services.
3. Education concerning and/or removal of architectural barriers for the disabled and
elderly.
4. Economic development (to include seismic retrofit, economic stability, low and moderate
income jobs).
These priorities were used by staff and the HRC to develop their funding recommendations for
the 2011 CDBG applications.
HRC Recommended 2011 CDBG Funding
The table below lists the projects recommended for funding and the funding amounts:
Applicant Project Funding
CAPSLO Maxine Lewis Homeless Shelter $97,128
City of SLO Property Acquisition for Affordable $184,669
Housing 313 South)
Habitat for Humanity Property Acquisition for Affordable $211,217
Housing (3212 Rockview
CAPSLO Homeless Campus Design& Drawings $25,000
City of SLO Housing Element Implementation $77,702
City of SLO CDBG Administration $51,801
Total $647,517
The total funding requested during the 2011 CDBG application process was $912,332, which
amounts to 41% more than anticipated available funding. Attachment 1 includes a list of the
applications submitted to the City for CDBG funding and the recommended funding amounts.
Attachment 2 includes the December 1, 2010, HRC staff report with a description of each
funding request, followed by the meeting minutes.
The recommendation reflects the restrictions of 15% for public services and 20% for program
administration. The CAPSLO request for the Maxine Lewis Homeless Shelter is for a total of
$141,753, which is the same amount requested for the past several years. In the past, the City has
chosen to provide 100% of the public services allowance to the shelter to maximize the benefit of
these funds. This year, the total is anticipated to be $97,128 (15% of the City's CDBG
allocation). The City has budgeted $41,100 from the General Fund for the shelter during the
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2011 CDBG Funding Recommendations Page-3
2010-2011 fiscal year. In order to fully fund CAPSLO's request, the Council would have to
authorize $44,625 from the General Fund in fiscal year 2011-2012, which is $3,525 more than
the current General Fund support. The Council will consider this General Fund allocation along
with the 2011-2013 financial plan. Previous financial plans have designated additional General
Funds to maintain the public services support for the Maxine Lewis Homeless Shelter at the
requested level of funding. HRC recommends continuation of this practice.
Reallocation of Prior Year CDBG Funds
In 2006, the City was awarded $122,600 in CDBG funds for the ADA Corrections City Facilities
Project and CAPSLO was awarded $50,000 in CDBG funds for the Prado Day Center
Improvement Project. These two projects are complete and staff recommends reallocating the
remaining $1,033 ($51 from ADA Corrections City Facilities Project and $982 from Prado Day
Center Improvement Project) of the awards to the City's project to acquire property for
affordable housing on 313 South Street.
In 2007, HASLO was awarded $30,000 in CDBG funds for the Anderson Hotel Fire Sprinkler
System Project.. This project is also complete and staff also recommends relocating the
remaining $5,172 of the award to the City's project to acquire property for affordable housing on
313 South Street.
Staff Recommended CDBG Funding Reallocations
From/To Applicant Project Funding
From City of SLO 2006—Completed ADA Corrections of $51
Ci Facilities Project
From CAPSLO 2006 — Completed Prado Day Center $982
Irn rovement Project
From HASLO 2007 — Completed Anderson Hotel Fire $5,172
S rinkler System Project
Total From $6,205
To City of SLO 2009 — Property Acquisition for $6,205
Affordable Housing 313 South
Total To $6,205
Staff is recommending funding reallocations to Property Acquisition for Affordable Housing
(313 South) because it fulfills a top CDBG funding priority established by Council to develop
affordable housing to low and very-low income persons. In addition, the project would involve
implementation of Housing Element Program 6.12, which specifically identifies the site as a
location that should be considered for rezoning to allow infill housing. This project has received
multi-year CDBG funding in order to acquire enough money for acquisition. Project entitlements,
including a General Plan Amendment, Rezoning and Architectural Review have been applied for
and the timeframe for approval is March 2011. Property acquisition could occur in fall 2011,
after 2011 CDBG Program Year funds become available.
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2011 CDBG Funding Recommendations Page 4.
Next Steps
The 2011 CDBG funding recommendations adopted by the.City Council will be forwarded to the
County Board of Supervisors for inclusion in the 2011 Urban County Action Plan, which
includes funding allocations for all of the participating jurisdictions. Although the CDBG fiscal
year begins on July 1, 2011, funds for projects awarded by the City Council are not expected to
be available until October..
Future Federal CDBG Funding
On February 14, 2011 President Barack Obama unveiled his budget request for the 2012 fiscal
year. The proposal would shave $1.1 trillion off the federal deficit over 10 years. His budget
request for the Department of Housing and Urban Development (HUD) is 1 percent below the
2010 level and includes a reduction of$300 million (7.5%) in funding for CDBG. This level of
funding reduction would result in City funding allocations at 2009 levels for the 2012 CDBG
Program Year. Proposed CDBG funding reductions for the 2012 fiscal year will not affect
funding recommendations before Council tonight for the 2011 Program Year. Staff will monitor
the federal budget process closely over the next several months and-will report back to Council if
further CDBG funding reductions are adopted or if steps are taken to rescind CDBG funding for
2011.
FISCAL IMPACTS
Decisions made regarding CDBG funding determine how the limited pool of funds the City
receives through the Urban County allocation process is spent. To the extent that projects are
funded through CDBG, the burden on the City's General Fund to pay for those projects is
reduced. As a result, projects that receive CDBG funding have a positive fiscal impact on the
City if they otherwise would have been paid for out of the General Fund. The amount of funding
shown for 2011 is an estimate based on current year funding. If the amount awarded to the City
is more than the amounts shown, staff will recommend adjustments to the allocations. If the
amount is less, additional General Fund monies may be needed to supplement costs associated
with General Plan Implementation of the Housing Element, which is a fixed cost associated with
the Housing Programs Manager position.
ALTERNATIVES
.1. The Council may modify the proposed funding amounts.
2. The Council may choose to fund a CDBG application not recommended by the HRC or
staff.
3. The Council may continue consideration of funding for the CDBG 2011 program year.
Direction should be given to staff regarding additional information needed to make a
decision on funding amounts.
PH1-4
2011 CDBG Funding Recommendations Page 5
ATTACHMENTS
1. HRC Recommendation—2011 CDBG Funding
2. HRC Memorandum
3. HRC Meeting Minutes
4. Draft resolution approving the staff recommendation
COUNCIL READING FILE
2011 CDBG applications submitted to the City for funding consideration
TACommunity Development\CARS\CDBGCC 2011 Funding Recommendations.DOC
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1
Attachment 2
iIIIIII III MEMORANDUM
i CITY OF SAN LUIS OBISPO
TO: Human Relations Commission
VIA: Kim Murry, Deputy Community Development Director
FROM: Tyler Corey, Associate Planner
MEETING DATE: November 17, 2010
SUBJECT: Item#1: Overview and discussion of 2011 CDBG applications.
Situation
On October 5, 2010, the City Council endorsed the NRC's recommended Community
Development Block Grant (CDBG) funding priorities for 2011. The priorities established by the
HRC and City Council are listed below:
1. Develop and enhance affordable housing for low and very-low income persons.
2. Emergency and transitional shelter, homelessness prevention and services.
3. Education concerning and/or removal of architectural barriers for the disabled and elderly.
4. Economic development (to include seismic retrofit, economic stability, low and moderate
income jobs).
2011 CDBG Applications
The above priorities are used as the basis for making recommendations regarding the 2011
CDBG applications. The City received a total of 11 CDBG funding applications requesting
$912,332. Expected funding for the 2011 Program Year is $647,517. The following discussion
provides a brief overview of each funding request and evaluates the proposals for consistency
with funding priorities. This recommendation is also summarized in a spreadsheet, which is
included as Attachment 1. A copy of each of the 2011 CDBG applications is provided for HRC
review. Those applications not recommended for funding also have the opportunityto apply for
the City's Grants-In-Aid funds.
Project Overview and Preliminary Funding Recommendations
1. Maxine Lewis Homeless Shelter (CAPSLO): The CAPSLO request for the homeless
shelter is for $141,753. The City is limited to using 15% of its allocation for public services
uses. In the past, the City has chosen to provide 100% of this allowance to the shelter to
maximize the benefit of these funds. This year, the total is anticipated to be $97,128 (15% of
PH1-7
Attachment 2
HRC Memorandum,2011 CDBG Applications Workshop
Page 2
the City's CDBG allocation). The City has budgeted $41,100 from the General Fund for the
shelter during the 2010-2011 fiscal year. In order to fully fund CAPSLO's request, the
Council would have to authorize $44,625 from the General Fund in fiscal year 2011-2012,
which is $3,525 more than the current General Fund support.
2. Prado Day Center (CAPSLO): The CAPSLO request for $59,907 cannot be met by CDBG
funding if the City allocates all of the Public Services allowance to the homeless shelter, as
proposed. The City normally supports operations at the Prado Day Center through a
contribution from the General Fund. In the 2010-2011 financial plan, the City allocated
$53,700 to the Prado Day Center from the General Fund: The Council would have to
authorize an additional $6,207 from the General Fund to fully fund the 2011 CAPSLO
request of$59,907.
3. Transitional Food and Shelter: Transitional Food and Shelter has requested $3,000 to
support their operations of providing emergency shelter for the medically fragile and
homeless. These funds would come from the limited pool of funds available to support
public services. Although this request meets Council adopted priority two, City staff does
not support using CDBG funds to support this activity because it would reduce the amount of
funding available for the homeless shelter, which matches the City's funding priorities more
closely.
4. Alliance for Pharmaceutical Access: Alliance for Pharmaceutical Access has requested
$3,500 to support their operations of providing access to prescription medications for chronic
medical conditions to targeted populations. These funds would come from the limited pool of
funds available to support public services. The preliminary recommendation from staff does
not allocate CDBG funds to this project because it would reduce the amount of funding
available for the homeless shelter, which matches the City's funding priorities more closely.
5. Senior Nutrition Program of SLO County: Senior Nutrition Program has requested $5,000
to support their operations of providing hot lunches to needy seniors. These funds would
come from the limited pool of funds available to support public services. City staff does not
support using CDBG funds to support this activity, because it does not closely match one of
the four funding priorities outlined by the HRC and Council.
6. City of San Luis Obispo (Property Acquisition; 313 South Street): The property located
on 313 South Street is currently developed with the McCarthy Steel warehouse. This
property is currently zoned Manufacturing, but is identified in the City's Housing Element as
a suitable site for high-density, infill housing that should be considered for residential zoning.
An affordable housing developer, ROEM Corporation, has entered into a purchase agreement
with the current property owner to develop affordable housing on the property. The project is
expected to accommodate up to 68 units, which will be 100% affordable to low-income,
very-low income and extremely low-income households. ROEM Corporation will be
applying to the State of California for tax credits during 2011 and the City is now applying
for CDBG funding to support the developer's tax credit application. Local support for the
PH1-8
Attachment 2
HRC Memorandum,2011 CDBG Applications Workshop
Page 3
project is necessary for the project to be competitive on a State-wide basis. In addition to
CDBG, the City is applying to the County for HOME funds, and will be able to contribute
additional funding to the project in the form of fee deferrals. The project meets the City's top
priority for use of CDBG funds and staff is recommending funding of this proposal in the
amount of$184,669.
7. Habitat for Humanity for SLO County (Property Acquisition; 3212 Rockview): Habitat
for Humanity has requested $250,000 to acquire land to construct three single-family homes
for very-low income families. The project meets the City's top priority for use of CDBG
funds and staff is recommending funding of this proposal in the amount of$211,217 with the
remaining balance to be funded by the City's Affordable Housing Fund.
8. City of SLO (Curb Ramps): The City of San Luis Obispo, Public Works Department, is
requesting $100,000 for curb ramp projects to remove architectural barriers. This program is
not recommended for funding because there is currently a balance of over $200,000 available
for new curb ramp projects associated with the 2008 CDBG Program Year.
9. CAPSLO Homeless Services Campus: CAPSLO is requesting $25,000 to help fund pre-
development costs for the design and construction of a new homeless services campus to be
located adjacent to the Department of Social Services on 3451 South Mguera Street. The
campus would combine services currently provided at the Maxine Lewis Homeless Shelter
and the Prado Day Center, consistent with the concepts of the 10-Year Plan to End Chronic
Homelessness. The City recently granted a use permit to allow the homeless services campus
at the proposed location and is awaiting site and building design plans for final architectural
review and approval. The project is consistent with the Council-adopted priorities for CDBG
funding and staff is recommending funding of this proposal in the amount of$25,000.
10. MCSC: Mission Community Services Corporation is requesting $10,000 in CDBG funding
for the Women's Business Center Program. The project would fall under the economic
development category, which corresponds to the fourth funding priority adopted by the City
Council. The Women's Business Center Program received an allocation of$10,826 from the
2010 program year, which has not yet been used. The preliminary recommendation from
staff does not allocate additional CDBG funds to this project until funds from the 2010
program year have been utilized.
11. City of SLO (Program Administration, Implementation of Housing Element): HUD
allows up to 20% of the City's CDBG allocation ($129,503) to be used for program
administration. CDBG administration and Housing Element implementation are both eligible
activities. Activities accomplished with this funding include processing CDBG applications,
completing environmental clearances, preparing contracts, preparing quarterly reports and
monitoring projects as they progress. Implementation of the Housing Element is another
function that is proposed to be funded through the CDBG administration program. These
activities include administration of the Affordable Housing.Fund, administration of the City's
affordable housing stock, implementation of the Inclusionary Housing Ordinance and
PH1-9
Attachment 2
HRC Memorandum,2011 CDBG Applications Workshop
Page 4
implementation of various Housing Element programs. These activities are consistent with
the Council's first two priorities because they further affordable housing opportunities in the
City. All of these functions are carried out by the City's Housing Programs Manager
position. The preliminary staff recommendation is to continue funding this position with
CDBG funds.
HRC Role
These preliminary recommendations are provided for the benefit of the HRC. The HRC's role is
to consider these recommendations and either (1) accept the allocations proposed if the HRC
concurs, or (2) make changes so that the recommendation reflects the views of a majority of the
Commission.. The adopted priorities should guide the Commission throughout the discussion.
The November 17'h HRC meeting is scheduled as a workshop to provide the HRC with an
opportunity to discuss these applications and ask questions of staff. A public hearing is
scheduled on December I" for the HRC to receive public testimony and finalize their
recommendation.
The HRC's recommended allocations will be forwarded to the County for incorporation into the
Draft Action Plan for the 2011 CDBG program year. The entire Draft Action Plan will be
considered by the Council in March, 2011.
Attachments:
1
G:\CD-PLAMTcorey\LR\CDBG\Reports\CDBGapps(1 I workshop).doc
PHl-10
-1 Attachment 3
HUMAN RELATIONS COMMISSION (HRC)
MINUTES REGULAR MEETING
December 1, 2010
5:00 p.m.
990 Palm St— Council Chambers
CALL TO ORDER: 5:00 PM
PRESENT: Chairperson: Charlene Rosales; Commissioners: Louise
Matheny, Shana Ogren, John Rollefson, and Hillary Trout
ABSENT: Vice Chairperson: Tom Sant; Commissioners: Trey Duffy
STAFF
PRESENT: Greg Zocher, Risk and Benefits Manager; Tyler Corey, Acting
Housing Programs Manager
CONSIDERATION OF MINUTES
ACTION: Moved by Matheny/Trout to approve the minutes of November 17,
2010 as submitted; motion carried 5-0.
PUBLIC COMMENT
There were no comments for items not on the agenda.
PUBLIC HEARING
Item 1. COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PUBLIC
HEARING (COREY/MURRY)
Public testimony heard.
ACTION: Moved by Trout/Mathenv to accept staff recommendation for
funding CDBG Projects. In the event CDBG funding exceeds
$647,517, additional funds for public services would go first to
Maxine Lewis Memorial Shelter and then to Prado Day Center.
Excess funding for housing/public facilities would go to Mission
CSC; motion carried 5-0.
PHl-11
Attachment 4
RESOLUTION NO. XXXX-11
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SAN LUIS OBISPO APPROVING THE 2011 CDBG
PROGRAM AND REALLOCATING $6,205 OF FUNDING FROM
PREVIOUS CDBG PROGRAM YEARS
WHEREAS, the City of San Luis Obispo is a participating jurisdiction in the San Luis
Obispo Urban County, along with the cities of Arroyo Grande, Atascadero, Grover Beach, and
Paso Robles and the County of San Luis Obispo; and
WHEREAS, said cities and County cooperatively administer several federal grant
programs under the provisions of the Cooperative Agreement approved by the San Luis Obispo
City Council on June 21, 2005, and under applicable U.S. Department of Housing and Urban
Development Department (HUD) rules; and
WHEREAS, pursuant to said agreement, the Urban County Public Participation Plan and
HUD rules, the City Council held a public hearing on March 1, 2011, to consider funding
recommendations by the Human Relations Commission (HRC), to review applications for
federal grant funding, and to consider public comments on community needs and the use of such
funds; and
WHEREAS, The Council has considered applications fore Community Development
Block Grant (CDBG) funds, public testimony, the Urban County's proposed One-Year Actio_n
Plan and the HRC and staff recommendations included in the agenda report; and
WHEREAS, the Council has also considered previous years' CDBG funding allocations
and determined that amendments are necessary to re-allocate unused funds from completed
projects to other eligible uses.
BE IT RESOLVED, by the City Council of the City of San Luis Obispo as follows:
Section 1. 2011 Community Development Block Grant Program Amendments. The
City's 2011 Community Development Block Grant Program is hereby approved, as shown in
Exhibit A. The City Manager is authorized to approve final dollar amounts once HUD releases
allocations with the direction to make up differences in the two amounts.
Section 2. Community Development Block Grant Program Amendments, The 2006
and 2007 CDBG Programs are hereby amended, as shown in Exhibit B.
Section 3. Board of Supervisors Consideration. The Council hereby forwards the
above actions to the San Luis Obispo County Board of Supervisors for consideration prior to the
Board's final action o the Urban County's 2011 Consolidated Plan.
Section 4. City Manager Authority. The City Manager is authorized to act on behalf
of the City in executing grant agreements and other actions necessary to implement the approved
PH1-12
Attachment 4
Resolution No. (2011 Series)
Page 2
Consolidated Plan and CDBG Program, including minor revisions to funding amounts for the
2011 CDBG Program if the City's actual CDBG allocation is different than expected.
Upon motion of seconded by and on the
following vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was passed and adopted this 151 day of March, 2011.
Mayor Jan Marx
ATTEST:
Elaina Cano
City Clerk
APPROVED AS TO FORM:
store Dietrick
City Attorney
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PH1-14
Attachment 4
Exhibit- "B"
CDBG Reallocations
From/To Applicant Project Fundis
From City of SLO 2006—Completed ADA Corrections of $51
City Facilities Project
From CAPSLO 2006 — Completed Prado Day Center $982
Im rovement Project
From HASLO 2007 — Completed Anderson Hotel Fire $5,172
Sprinkler System Project
Total From $6,205
To City of SLO 2009 — Property Acquisition for $6,205
Affordable Housing (313 South)
Total To $6,205
PHl-15