Agenda Item Wording:
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Encampment Grant Application - Authorize staff to apply for the Encampment Resolution Program grant in the amount of approximately $2.5 million for operational funds for the Visalia Navigation Center on N. Court to provide interim shelter, and a combination of operating and development funds for Majestic Gardens on W Noble for permanent housing.
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Deadline for Action: 12/4/2023
Submitting Department: Finance and Technology Services
Contact Name and Phone Number:
Margie Perez, Housing Specialist, margie.perez@visalia.city, (559) 713-4460;
Melody Much, Assistant Finance Director, melody.murch@visalia.city, (559) 713-4379; Renee Nagel, Finance Director, renee.nagel@visalia.city, (559) 713-4375
Department Recommendation:
Staff recommends that Council receive a summary of funding available for the Encampment Resolution Funding Program and authorize staff to apply for Encampment Resolution Funding Round 3 in the amount of $2.5 million dollars. The proposed amount is to be split evenly between assistance with the first year of operational funds for the Visalia Navigation Center in the amount of $1.25 million, and assistance for the Majestic Gardens project with development and operational subsidies gap funds in the amount of $1.25 million. These are both projects currently under development will provide interim shelter and permanent housing respectively to persons living in targeted encampments within the City of Visalia.
Background Discussion:
The City has provided significant Federal and State funding and grant application support to both the Navigation Center, in partnership with Community Services Employment Training (CSET), and the Majestic Gardens project, in partnership with RH Community Builders (RHCB). Both projects have received various grants and funding to cover most of their project budgets and an award of this proposed ERF Round 3 application amount would complete the initial funding for both projects. The Navigation Center will provide emergency shelter services and the Majestic Gardens will provide permanent supportive housing. Together these two projects create a pathway for encampment residents to achieve permanent housing, which makes this combination an excellent candidate for Encampment Resolution Program Funding.
The California Interagency Council on Homelessness (Cal ICH) released the Encampment Resolution Funding (ERF) Program, Round 3 (ERF Rd 3), Third Disbursement Notice of Funding Availability (NOFA) on December 1, 2023. The Encampment Resolution Funding Program funds, person-centered proposals that resolve unsheltered homelessness in encampments. Proposals should address safety and wellness in encampments, resolve critical encampment concerns via 1) Providing interim shelter with clear pathways to permanent housing and/or 2) Placing homeless individuals directly into permanent housing. Proposals may strengthen existing, successful models and/or support new approaches that provide safe, stable, and permanent housing for people in encampments. The total available funding is $298.7 million and the average grant size per jurisdiction is $2.5 million. Staff recommends applying for ERF Rd 3 for $1.25 million for the Visalia Navigation Center’s first year operational costs to provide immediate interim shelter, and $1.25 million for the Majestic Gardens development gap, rental subsidies, and operational staffing to provide direct placement into permanent housing for people residing in encampments within the City of Visalia.
Eligible ERF Rd 3 applicants are local jurisdictions including a city, a county as well as a Continuum of Care (CoC). The ERF Round 3 NOFA is awarded on a competitive basis. Applications will be accepted on a rolling basis until all funds are exhausted. Local jurisdictions will have priority to apply for ERF programs on state right of ways over CoC applicants. ERF Rd 3 funds may only be used for proposals that connect people experiencing homelessness in encampments to interim shelter with clear pathways to permanent housing and/or place people directly into permanent housing.
Funds Available: The total available funding is $298.7 million for award through ERF Round 3 NOFA until June 30, 2024, or until funds are exhausted, whichever comes first. Awards are expected to be released in July 2024. The deadline to expend 50% of ERF Round 3 funds and obligate 100% of funds is June 30, 2025. The deadline to expend 100% of ERF Round 3 funds is June 30, 2027. Up to 50% of the funds authorized for ERF Round 3 shall be prioritized for local jurisdictions with proposals that address encampments on state right-of-way and meet priority criteria established by Cal ICH in consultation with the California Department of Transportation (Caltrans).
Eligible Uses: Eligible uses include, but are not limited to, development and operational costs of interim emergency shelters or navigation centers, rapid rehousing, rental subsidies, security deposits, landlord mitigation, case management, operating subsidies for emergency shelters or navigation centers, street outreach, job training programs, and delivery of permanent housing.
Proposed Activities:
1. Providing interim shelter with clear pathways to permanent housing - the Visalia Navigation Center.
a. The Navigation Center is currently in need of first year operational costs to assist in covering furnishing costs for the facility and start-up staffing costs, as shown below in Table 1: Navigation Center ERF Rd 3 Funds Request Summary. This would also help meet ERF Rd 3’s very short expenditure deadline of having 50% of funds expended within a year of the award. A full detailed Navigation Center ERF Rd 3 funding request summary can be found in Attachment B.
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Table 1: Navigation Center ERF Rd 3 Funds Request Summary |
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Uses of Funds |
Amount |
|
Shelter Worker (Rec 2 FTE) |
$ 1,839 |
|
Food Services Manager (Asst Dir 1 FTE) |
77,601 |
|
Homeless Services Food Prep Assistant (SPS 4 FTE) |
184,584 |
|
Custodian (SPS 2 FTE) |
92,292 |
|
Homeless Navigator (SPS 1.5 FTE) |
69,219 |
|
Indirect costs |
153,353 |
|
Staff training |
8,000 |
|
Furniture, supplies, window covering, and equipment. |
663,112 |
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Total Navigation Center Request |
$ 1,250,000 |
2. Placing homeless individuals directly into permanent housing - Majestic Gardens.
a. The Majestic Gardens has a development gap of approximately $650,000. Visalia Homekey LP, the sponsor entity initially planned to apply for HHAP 5 funds to cover the remaining gap, however, California Interagency Council on Homelessness (Cal ICH) stated new HHAP 5 projects are not to be awarded and funds should be focused on sustaining existing projects. There is also a shortage of rental subsidy vouchers due to the large number of new permanent supporting housing projects in our region.
ERF Rd 3 funds can provide up to 2-years of rental subsidies for Majestic Gardens, while the Continuum of Care (CoC) and the Housing Authority of Tulare County (HATC) are in the process of obtaining additional rental vouchers. The project has secured 22 permanent supportive housing vouchers from the Kings/Tulare Homeless Alliance/Continuum of Care but is in need of rental subsidies for the remaining 19 units. RHCB requests two (2) years of rental subsidy for 19 units as we work to secure additional long-term rental subsidies. Please see a breakdown of this request below in Table 2: Majestic ERF Rd 3 Rental Subsidies.
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Table 2: Majestic ERF Rd 3 Rental Subsidies |
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# of Units |
Unit Type |
2024 Fair Market Rents (FMR) |
Year 1 Rental Subsidy |
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19 |
0 BR |
$977 |
$ 222,756 |
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# of Units |
Unit Type |
2025 Fair Market Rents (FMR) |
Year 2 Rental Subsidy |
|
19 |
0 BR |
$1,026 |
$ 233,928 |
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Total Majestic Rental Subsidies Request |
$ 456,684 |
In addition, the Majestic Project also plans to utilize ERF Rd 3 funds to provide additional on-site security staffing to ensure the safety of tenants, the property, and the nearby neighborhood and businesses. The Majestic’s total ERF Rd 3 request is shown below in Table 3: Majestic ERF Rd. 3 Funding Request Summary.
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Table 3: Majestic ERF Rd. 3 Funding Request Summary |
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Funding Activity |
Amount |
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Capital Development |
$ 648,810 |
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Rental Subsidy (19-units for 2-years) |
456,684 |
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Operating Subsidy |
144,506 |
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Total Majestic Gardens Request |
$ 1,250,000 |
ERF funds are competitive, and activities should center around 1) Providing interim shelter with clear pathways to permanent housing and/or 2) Placing homeless individuals directly into permanent housing. Therefore, applying for both the Visalia Navigation Center and the Majestic Gardens project will strengthen the City of Visalia ERF Rd 3 application and increase the chances of being awarded. An award of ERF Rd 3 will provide essential gap funding to support two important City of Visalia projects that will provide immediate interim shelter and direct placement into permanent housing for people with experience homelessness in the City of Visalia.
Fiscal Impact:
If awarded, Encampment Resolution Funding Round 3 will generate $1.25 million for the Visalia Navigation Center’s first year of operational costs to provide interim shelter, and $1.25 million to the Majestic Project for development costs and rental subsidies to provide direct placement into permanent housing to people residing in encampments within the City of Visalia for a total of $2.5 million in ERF Rd 3 funds. No matching funds are required for this application, and no General Fund money is included or requested for the funding of these projects.
Prior Council Action: ● June 21, 2021 - Council awarded RFP 20-21-26 to CSET for the development and operation of the Visalia Navigation Center. ● July 18, 2022 - Council awarded RFP 21-22-28 to RHCB Development LP to the Majestic Inn at 4545 W. Noble Avenue into the Majestic Gardens, a permanent affordable rental housing complex with on-site case management.
● January 17, 2023 - Council approved an application for ERF Round 2 funding for the Navigation Center.
● April 17, 2023 - Council approved an application for Homekey Round 3 funding for the Majestic Gardens project.
Other: None.
Alternatives: Do not apply for the Encampment Resolution Funding Round 3. (Not recommended.)
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize staff to apply for Encampment Resolution Funding Round 3 in the amount of $2.5 million dollars to provide first year operational funds for the Visalia Navigation Center, and a combination of operating and development funds for Majestic Gardens which will provide interim shelter and permanent housing to persons living in targeted encampments within the City of Visalia.
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Environmental Assessment Status: Completed
CEQA Review: Completed
Attachments: ● Attachment A: Encampment Resolution Funding Rd 3 NOFA ● Attachment B: Navigation Center Project Letter of Request ● Attachment C: Majestic Gardens Project Letter of Request