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
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COUNCIL AGENDA REPORT ITEM MBER:
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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.
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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
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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.
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■ 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
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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
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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.
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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.
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