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HomeMy WebLinkAbout08/17/1993, 2 - CONSIDERATION OF CANDIDATE PROJECTS FOR COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING UNDER THE FIRST YEAR PLAN OF THE COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY (CHAS). 11 40 43 . IIII� II1IIIIII Ip�III1 MEET G T 1011111111Q 1011111 city of san uis 0131SW - - COUNCIL AGENDA REPORT ITEM MBER: 0 FROM: Arnold Jonas Community Development Director; By: Jeff Hoo ,tssociate Planner SUBJECT: . Consideration of candidate projects for Community Development Block Grant funding under the First Year Plan of the Comprehensive Housing Affordability Strategy (CHAS). CAO RECOMMENDATION: Review the candidate projects and, by motion: 1) identify and prioritize projects to be receive approximately $800,000 in CDBG funds in the 1994-1995 program year; and 2) provide direction on appropriate funding levels. SITUATION On July 6th the City Council approved the City's participation in the Community Development Block Grant (CDBG) "Urban County" program, and authorized the Mayor to sign the Cooperation Agreement with the County of San Luis Obispo establishing the program. County staff has been working with the participating cities of San Luis Obispo, Atascadero, El Paso de Robles, Grover Beach, and Pismo Beach to prepare the CHAS and related CDBG application materials for submittal to the U.S. Department of Housing and Urban Development (HUD). To assist the County with the CHAS, staff has prepared a list of candidate projects which: 1) would be eligible for funding from the City's share of CDBG funding; 2) could be initiated in the first year of the program; and 3) would help meet a demonstrated community need. Before compiling the First Year Plan, staff is requesting that the City Council provide direction on the type of projects to be funded, priorities, and funding levels. DISCUSSION I. Staff Recommended CDBG Candidate Projects Following are the projects/programs that staff recommends for priority funding in the First Year Plan, and the proposed funding levels. City Council is being asked to review the preliminary list of CDBG projects and provide direction as appropriate by modifying priorities, adding or deleting projects, or by adjusting projected funding levels. Actual Urban County funding levels may be adjusted by HUD once the CHAS is submitted and the total Congressional CDBG allocation is apportioned among entitlement cities and counties nationwide, probably in early 1994. If this happens, or if other significant funding changes are needed, staff would return for City Council direction. Otherwise, the proposed CDBG candidates and recommended funding will be reflected in the First Year Plan which guides the City's use of funds in the 1994-95 program year. City Council will have another opportunity to review CDBG projects when the completed First Year Plan and Five Year Strategy return for Council review in the Fall, prior to submitting it to the County for inclusion in the CHAS. city of Sar MIS OBI SPO 4b j COUNCIL AGENDA REPORT Staff Report Page 2 Recommended Program Priorities Under HUD guidelines, cities and counties are required to prioritize their CDBG programs. HUD considers higher priority projects to be those that most closely reflect HUD's and the local jurisdiction's affordable housing objectives, and would, therefore, be the first to receive funds in the event that. the total funds allocated was less than projected. For the first program year, the following priorities and projects are recommended, and at the funding levels specified: PRIORITY #4: AFFORDABLE HOUSING::: Develop and support programs to: <increase the supply pf- fordable housing.for low income:households through ahe:construction of new dwelling units or the:acquisition::and rehabilitation of existing:units. Programs: ■ Engineering/design feasibility study for downtown affordable elderly/handicapped housing ($50,000). ■ Expansion of affordable rental housing program citywide, including acquisition and/or construction ($250,000). TOTAL FUNDING $300,000 PRIORITY #2.i 'EMERGENCY SHELTER. Provule emergency shelter for homeless persons: Programs: ■ Provide $120,000 annually to operate the San Luis Obispo homeless Shelter using CDBG entitlement funds. TOTAL FUNDING $120,000 a ;�' a ������i�a►�IpI��InN�� III city of san At oBispo WaS COUNCIL AGENDA REPORT Staff Report Page 3 PRIORITY # 3:. REMOVAL OF ARCHITECTURAL BARRIERS:FOR HANDICAPPED AND ELDERLY PERSONS. Install handicapped accessible doors in City Halland replace curb, gutter and'sidewalk with handicapped ramps at approximately. 40 locations:in:the Central Business.District and in areas close to hospitals; elderly:and handicapped housing. Programs: ■ Provide approximately $80,000 for the conversion of existing public sidewalks to meet California standards for handicapped accessibility. ■ Allocate $20,000 for installation of power activated doors at City Hall to assist handicapped persons and the elderly. TOTAL FUNDING $100,000 PRIORITY # 4. ECONOMIC DEVELOPMENT. Enhance economic stability, job opportunities for low and moderate.income persons, and promote:economic vitality through diversity. rsity. NOTE: The following programs anticipate that specific similar recommendations will be forthcoming from the Economic Stability Task Force, and subsequently approved by the City Council. If those actions do not occur, then staff will return to Council with alternative recommendations for programming the funds allocated to this priority. Programs: ■ Allocate $70,000 annually to hire an economic development coordinator to staff a newly formed economic advisory commission and to implement economic development policies and programs, plus $20,000 annually for a 1/2 time secretary. � I 11110►1IIII1111WI p city of sadMIS OBISPO 11i;% COUNCIL AGENDA REPORT Staff Report Page 4 ■ Allocate$30,000 for small business assistance program, including possible programs in business retention and reinvestment incentives,job training, seismic retrofitting, economic data base development and maintenance, and coordination with private industry and Cal Poly to encourage research and development locally. TOTAL FUNDING $1209000 FUNDING SUAMARY Total Program Allocation $640,000 Grant Administration 1$ 60,000 (Indirect cost recovery @ 20% of total City funding) Total Giant Allocation (estimate) $8009000 H. HUD Funding Objectives The U.S. Department of Housing and Urban Development (HUD) has three broad national objectives for CDBG-funded projects: 1. To benefit low- and moderate-income persons; 2. To aid in the prevention or elimination of slums or blight; and 3. To meet community development needs having a particularly urgency. HUD requires that at least 70 percent of the block grant recipient's overall expenditures during the funding period be used for activities that benefit low-and moderate-income persons. At least 51 percent of individual project or program funds must benefit low- and moderate-income persons. 20 percent of the City's total funding can be used for overall CDBG program administration and other indirect costs. III. Identification of Possible CDBG Programs/Projects Candidate projects were identified from three sources: A) a community housing need workshop; B) the Council Hearing Draft Housing Element; and C) City budget deliberations. There are more possible projects than funds available to implement them. Council is being asked to review 111111►1IIIII11 N f san t 1�91d1 city ci o ws osispo COUNCIL AGENDA REPORT Staff Report Page 5 the candidate programs and projects, and to prioritize them. Highest priority projects and programs will, to the extent CDBG funds are available, be undertaken in year one of the City's 5-year community development plan which is incorporated into the County's Comprehensive Housing Affordability Strategy (CHAS). Based on the council-identified funding priorities, staff will prepare and submit the plan to the County. The deadline for submitting the completed CHAS to HUD is December 31, 1993 for the 1994 program year. A. Community Housing Needs Workshop. To qualify for Urban County CDBG funding, the County was required to hold "housing need" hearings to allow the public to identify housing problems and needs. The County held three public hearings in May, one of which was held in the San Luis Obispo Veteran's Building. Housing agencies, housing support groups, and social service organizations were invited. From the comments made at the hearing in San Luis Obispo, these were identified as high priority, community housing needs: 1. Housing assistance for low-income fust time homebuyers, including single-parent families, large families, and handicapped persons. This would be accomplished through the San Luis Obispo Housing Authority, probably under a low-cost loan program, with the Authority pre-qualifying borrowers and administering the program. Staff anticipates that this need will be addressed, at least partially, through the Housing Trust Fund, a new program included in the Draft Housing Element which would be funded through the payment of housing in-lieu fees. The City should consider funding this program with CDBG funds in subsequent years. 2. New rental housing for very-low and low income households, especially 2 and 3 bedroom units. In the short term, the most practical approach: acquisition of existing rentals by the Housing Authority or non-profit housing agencies to "lock in" affordability guarantees. In the mid- to long-term, construction of new rental units, perhaps in conjunction with new development in expansion areas, is another viable option. This need is most appropriately funded under the CDBG program, and is addressed as Priority #1 in the list of candidate programs. 3. Expansion of the San Luis Obispo homeless shelter, with emphasis on accommodating elderly and families. This need is addressed as Priority #2 in the list of candidate programs. B. Council Hearing Draft Housing Element The June 1993 Council Hearing Draft Housing Element includes the following housing programs CK - S ���� ►�Illll p� ►��I`► city of san ,6aI s OBISPO j COUNCIL AGENDA REPORT Staff Report Page 6 which appear to be most appropriately be funded through the CDBG program (listed in no particular order): 1.22.12 Housing Trust Fund. The City will establish a housing trust fund to be used to develop affordable housing units and acquire land for affordable housing projects. To qualify for such public assistance, housing must include guarantees that it will remain affordable as long as legally permissible. Affordable housing in-lieu fees will be placed in this fund. 1.23.7 Housing Rehabilitation Program. Using State and Federal funds, such as Community Development Block Grants, the City will establish a housing rehabilitation program offering low-cost loans or other rehabilitation assistance to those who cannot afford or obtain conventional financing. Many of the City's older housing units in the R-1 and R-2 zones provide housing for those on fixed- incomes, and provide rental housing for those who cannot afford to purchase housing. By providing a limited number of low interest loans according to need and affordability criteria, the City will help preserve safe, adequate housing for these citizens. Staff`'anticipates funding a housing rehab program starting in program year 1995-96. 1.23.13 Seismic Hazard Education Program. The City will create an educational campaign for owners of older residences informing them of ways to reduce the seismic hazards commonly found in such structures, and encouraging them to undertake seismic upgrades. This program could be carried out at minimal cost (estimated $5,000 for printing and mailing expenses), and funded during subsequent CDBG program years or through General Fund monies as budget allows. 1.23.14 Seismic Retrofit Program. To assist lower income households undertake seismic upgrades to protect their dwellings from loss in an earthquake, the City will create a financial assistance program. Staff'would anticipate funding this program starting in year 2 or 3 of the CDBG program,,possibly as one facet of an overall housing rehab program including low-interest and deferred loans. 1.28.6 Emergency Shelters.. The City will support local and regional solutions to meeting needs of homeless persons, and will continue to support, jointly with other agencies, shelters for the homeless and for displaced women and children. This is addressed in the recommended First Year Plan, and in the City Council's recent action approving a Women's Shelter grant. 1.29.8 Water Conservation/Plumbing Retrofits. Make plumbing retrofits available free of charge to owner-occupied, low income households. �►�� II(p► InI city of San * OBISPO wi;�I%II�IU COUNCIL AGENDA REPORT Staff Report Page 7 C. Budget Deliberations As part of the City Council's budget deliberations, it was apparent that some programs and services may have to be curtailed given the City's tight economic situation and that the viability of certain programs was contingent upon securing resources outside of the City's general fund, such as State or Federal grants. Programs mentioned in this context include: ■ Continued operation of the Homeless Shelter. ■ Economic development program. Consequently, the 1993-95 Financial Plan does not include funding for these important programs beyond fiscal year 1993. The first two of these programs are included in the CDBG First Year Plan and are expected to be at least partially funded through the program on an on-going basis, subject to HUD approval. Additionally, the 1993-95 Financial Plan assumes indirect cost recovery of CDBG administrative costs at $160,000 in 19994-95. FISCAL IMPACTS Identifying CDBG programs and funding priorities will have an overall beneficial fiscal effect. To the extent that regular, on-going City programs are funded through the CDBG program, there is some risk that these necessary programs would have to be curtailed or funded through other means if CDBG funds are no longer available. ALTERNATIVES 1. Revise candidate CDBG projects. Councilmembers may wish to modify the list of candidate projects for CDBG funding, and/or change projected funding levels. 2. Defer identification of candidate CDBG projects. Councilmembers may defer identifying the candidate CDBG projects until a future meeting, pending additional study or receipt of additional information. To provide adequate lead time for preparation of the CHAS, it is recommended that the City Council identify the candidate projects as soon as possible but not later than its August 23rd meeting. ;nn_cftr=a.rpt a -