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Home My WebLink About03/19/1991, C-11 - REQUEST FOR AUTHORIZATION TO APPLY FOR A COMMUNITY DEVELOPMENT BLOCK GRANT TO PURCHASE AND REHABILITATE THE HOMELESS SHELTER SITE LOCATED AT 750 ORCUTT ROAD IN SAN LUIS OBISPO. I��H��NIVNIIIIIIIII�IUIII V7 f MEETING DATE: ct o san tuts o�ispo qftiis COUNCIL AGENDA REPORT FTEM NUMBER: •/ FROM: Ken Hampian, Assistant City Administrative Officer Prepared by: Deb Hossli, Administrative Analyst Dir, SUBJECT: Request for authorization to apply for a Community Development Block Grant to purchase and rehabilitate the Homeless Shelter site located at 750 Orcutt Road in San Luis Obispo. RECOMMENDATION: Authorize staff to apply for a Community Development Block Grant to purchase and rehabilitate the Homeless Shelter site. DISCUSSION: Grant Proposal Staff is requesting authorization to apply for a Community Development Block Grant (CDBG) on behalf of the Economic Opportunity Commission (EOC) and San Luis Obispo Housing Authority to benefit the Homeless Shelter. The grant, as proposed, includes three components: * purchase of the current shelter site property * rehabilitation of house located on the site * final payment for the modular homes on the site I i The first component of the grant, purchase of the property, would save over $24,000 in rental payments annually. While this would not result in any immediate savings to the Program (the rent is funded with a grant that cannot be used for other expenses) , it would help to stabilize the Homeless Shelter Program and enhance the EOC' s chances for obtaining future capital improvement grants. i The second component of the grant, rehabilitation of the house to bring it up to health and safety codes for sheltering, would also be very beneficial. Currently, the house's structural unsoundness precludes the EOC from using it for sheltering. The third component, final payment for the modular houses on the site, is critical to the EOC. An Emergency Shelter Program (ESP) grant has been used for the last three years to make the annual lease purchase payment for the modulars. The EOC recently learned that ESP grants will be discontinued after 1991. Therefore, without CDBG grant monies, the final, fifth year payment of $27 ,701, would have to be made up through other funding sources. No formal estimates have been prepared for the grant application as yet, however, staff would expect to apply for the maximum allowable grant of $500, 000. I °f��iiil�illllllll��1° ll�Ill city of San Luis OBispo COUNCIL AGENDA REPORT Page Two Council Agenda Report Grant Preparation/Property Ownership I The Housing Authority has agreed to prepare the CDBG application free of charge with assistance from City staff, the County Homeless Coordinator and EOC. Under this arrangement, if the City was successful in securing the grant, ownership of the property would be transferred to the Housing Authority for long-term administration. The Housing Authority, in turn, would enter into an agreement with the EOC to use the property for the Homeless Shelter Program (for a minimal rent such as $1 per year) . The EOC concurs with this arrangement. It is important to note that, initially, discussions at the staff level envisioned a joint City/County application for the Homeless Shelter project. However, after reviewing the proposed project more closely with the State, CDBG staff confirmed that a City sponsored grant application would be viewed more favorably. Based on the State's grant scoring formula, a City sponsored application would receive a higher rating because the shelter is located within the city limits (regardless of the fact that the Shelter serves the entire County) and the City's poverty index is higher than the unincorporated areas of the County. CDBG staff also confirmed that there would be no added benefit to filing a joint application for the project. To demonstrate their commitment for the project, however, the County's Homeless Shelter Coordinator will assist the ! Housing Authority with preparing the application. The County also intends to write a letter of support for the project to include in the application packet. Recommendation Given the need for the project and the Housing Authority' s offer to prepare the application at no cost to the City, it is recommended that staff be authorized to pursue the CDBG application on behalf of the EOC and Housing Authority (it is important to note that the EOC and Housing Authority are not eligible to apply for CDBG funds on their own) . It should be emphasized, however, that the City's involvement in the grant application is purely limited to assisting in the acquisition and rehabilitation of the Homeless j Shelter site. The EOC will continue to operate the Homeless Shelter in the same manner as in the past. A successful grant would be extremely advantageous to the City, County and EOC. As the Council is aware, the City and County hold contracts with the EOC for the operation of the Homeless Shelter Program. The City and County contribute equal amounts to the Program annually (a maximum of $120, 000 each) . The balance of the • � i 11� 411'iVil1111�i ► " 11111 CItY Of San -JIS OBISPO amaze COUNCIL AGENDA REPORT Page Three Council Agenda Report Homeless Shelter budget, approximately $160, 000, is funded by the EOC with State and Federal grants. Given the current funding arrangements, anything that can be done to stabilize the Homeless Shelter Program benefits the City, County, and EOC. If the Council authorizes staff to submit the grant, the next month will be used prepare the application. A public hearing on the application will then be held in the latter part of April. The application is due to the State by May 3, 1991. j FISCAL IMPACT: Approval of this recommendation will not result in significant costs to the City. It is possible that the City may be requested to provide "up front" funding for an appraisal of the property (not to exceed $3,000) . However, expenditures of this nature are fully reimbursable under the grant. j ALTERNATIVES: fI 1. Defer the application for the Homeless Shelter to the 1992 grant funding cycle. While this is feasible option, it is not recommended. The current lease agreement for the Homeless Shelter contains an option to purchase the property. The lease agreement, however, expires prior to the 1992 CDBG grant funding cycle. Therefore, if the Council does not take advantage of this 1991 CDBG grant funding cycle, there are no guarantees that the opportunity to purchase the property would be available in the future. 2. Do not authorize staff to apply for CDBG monies for the I Homeless Shelter project. Again, while this is a feasible alternative, it is not recommended. Ownership of the property and full usage of the house are critical to maintaining a stable Homeless Shelter Program. It only benefits the City, County and EOC to take advantage of the CDBG Program as a potential source of funding for the Homeless Shelter Program. CONCURRENCES: i The EOC, Housing Authority, and County have reviewed this report and concur with its contents. In addition the property owners are fully aware of this report and are supportive of the grant application. ATTACHMENT: 1 - Letter from County Supporting Grant Application F:CDBG 7// 3 RE. ]VEQ MAR 11 1991 County of San Luis Obispo ION SAN99eC_A COUNTY GOVERNMENT CENTER.RM.370■SAN LUIS OBISPO,CALIFORNIA■(805)549-5011 OFFICE OF THE COUNTY ADMINISTRATOR March 8, 1991 Mr. John Dunn, City Administrator 990 Palm Street San Luis Obispo, CA 93401 Dear John: This is in response to your request for a letter of support for the homeless shelter grant application that you are recommending the City sponsor. On behalf of the County, I extend our full support for your application to purchase and rehabilitate the homeless shelter site. The County is also submitting an application for Community Development Block Grant (CDBG) funds to provide a portion of the long-term financing for homes purchased in a Nipomo development by low income households. It is my hope that each of these applications will be highly competitive and that we are successful in bringing a significant amount of CDBG monies into the county to complete these worthy projects. Please let me know if I can be of further assistance. Sincerely, ROBERT E. HENDRIX County Administrator ��- '% ATTACHMENT 1