Visalia City Council - File #: 24-0067

Date	Ver.	Action By	Action	Result	Action Details	Meeting Details	Video
4/15/2024	1	Visalia City Council	approve as recommended	Pass	Action details	Meeting details	Video

Agenda Item Wording:

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Adopt 2024 Annual Action Plan - Conduct a second Public Hearing to adopt and appropriate the Program Year (PY) 2024 Annual Action Plan, and PY 2019 CDBG CARES Act (CDBG-CV) Annual Action Plan Amendment IV for the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG), HOME Investment Partnership Program (HOME) activities.

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Deadline for Action: 4/15/2024

Submitting Department: Finance and Technology Services

Contact Name and Phone Number: Margie Perez, Housing Specialist, 713-4460, margie.perez@visalia.city <mailto:margie.perez@visalia.city>; Melody Murch, Assistant Finance Director, 713-4379, melody.murch@visalia.city <mailto:melody.murch@visalia.city>; Renee Nagel, Finance Director, 713-4378, renee.nagel@visalia.city <mailto:renee.nagel@visalia.city>

Department Recommendation:

1. Conduct a second a Public Hearing, allowing a final opportunity for citizens to provide input and comment on the proposed 2024 Annual Action Plan, and 2019 CDBG-CV Annual Action Plan Amendment IV;

2. Adopt and appropriate the proposed 2024 Annual Action Plan, and 2019 CDBG-CV Annual Action Plan Amendment IV activities;

3. Authorize City Manager or their designee enter into all contracts as listed in 2024 Annual Action Plan;

4. Authorize City Manager or their designee to submit the 2024 Annual Action Plan, and 2019 CDBG-CV Annual Action Plan Amendment IV to HUD.

Background Discussion:

As an entitlement community (EC) for CDBG and a participating jurisdiction (PJ) for HOME, the City of Visalia receives federal formula grants through the U.S. Department of Housing and Urban Development (HUD). This provides the City with annual direct grant funding for the benefit of low-income persons and households. As required by HUD, the City developed a 5-year Consolidated (ConPlan) to guide the use of federal Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) funds. HUD requires the City to develop an Annual Action Plan to meet the CDBG and HOME objectives established in the 5-year Strategic Plan within the Council approved ConPlan. The 2024 Annual Action Plan is the 5^thyear of the 5-year ConPlan that has been produced based on the objectives established in the City’s 5-year Strategic Plan for the Program Years 2020/21 through 2024/25.

Staff is seeking final public comment on the priorities and activity allocations proposed for the 2024 Annual Action Plan, and 2019 CDBG CARES Act (CDBG-CV) Annual Action Plan Amendment IV. Tonight’s public hearing will complete the citizen participation process which has been conducted to obtain community input for the development of the proposed Program Year (PY) 2024 Annual Action Plan, and PY 2019 CDBG-CV Annual Action Plan Amendment IV. This is the second public hearing to be held by Council, with the first having been held on April 1, 2024. The proposed plans were also presented at the Citizens Advisory Committee (CAC) on April 3, 2024, to receive additional public input. Council is asked to consider the comments, recommendations, and requests for funding as provided in further detail below and provide final approval.

PY 2024 Proposed Annual Action Plan: The proposed PY 2024 Annual Action Plan consists of an estimated $1,300,000 in CDBG projected resources, and $1,065,000 in HOME projected resources. The PY 2024 proposed CDBG and HOME resources, activities, and funding allocations are explained in further detail below.

PY 2024 Proposed Community Development Block Grant (CDBG) Resources and Expenses:

The PY 2024 CDBG resources consists of $1,200,000 in estimated annual grant allocation, and $100,000 in estimated program income for a total of $1,300,000 in PY 2024 CDBG resources as identified in Table 1: 2024 CDBG Projected Resources. *CDBG program income is generated from repayments of CDBG funded first-time homebuyer and owner-occupied rehabilitation loans.

The proposed activities for the PY 2024 Action Plan were formulated based upon applications received in response to a Notice of Funding Availability (NOFA). A NOFA was released to allow all interested parties to apply for available funding to administer programs in accordance with the City’s 5-year ConPlan goals and priorities approved by Council on April 20, 2020. The City released a NOFA from January 3^rd, 2024, through February 15^th, 2024, to solicit applications for the administration of the City’s PY 2024 CDBG public services, emergency accessibility home repair program, and senior/disabled mobile home repair program. The NOFA was published in the Visalia Times Delta on 1/3/24 and 1/10/24. The NOFA was posted on the City’s purchasing website, on the Central Valley Purchasing System “BidNet”, and on the Kings/Tulare Homeless Alliance listserv, which has over 400 recipients.

Recommended 2024 Annual Action Plan Activities:

The proposed 2024 Annual Action Plan activities and their respective funding are included, as Attachment B: 2024 AAP Amendment Table. The public hearing to be conducted tonight will allow Council a final opportunity to comment, discuss, and direct any necessary changes to the proposed activity allocations. In addition to the activities described below, the 2024 proposed CDBG administration budget is $260,000, which is allowed 20% of the annual grant allocation and program income.

CDBG federal regulations restrict public services to 15%, which is $240,000 available, in total, from the 2024 grant allocation and prior year program income. Funding requests received for the $240,000 of Public Services funding totaled over $500,000, which is twice the funding available.

The Committee funding recommendations are based upon the priorities set by the current ConPlan and intended to provide funding where it will be most impactful. Priority is recommended for programs that directly fund housing placements for homeless individuals through the provision of rent, vouchers, or the operation of housing units. The NOFA also imposed the limitation of program administration (staffing, operating, etc.) to 25% of total program budgets. To distribute the available funding, some applications have been partially funded, and two have not been recommended for funding.

The PY 2024 Proposed CDBG Public Services are listed below and included in Table 2: PY 2024 CDBG Proposed Public Services.

• Kings/Tulare Homeless Alliance (KTHA): At $20,000.

o KTHA is the designated Continuum of Care (CoC) for our region. The CoC is recommended by HUD as a comprehensive approach and to promote communitywide cooperation to ending homelessness. As the designated CoC, KTHA oversees the Point in Time (PIT) Count. KTHA oversees the administration of HUD funded Permanent Supportive Housing (PSH) and Rapid Rehousing (RRH) programs, as well as the Coordinated Entry System (CES) which begins the process of housing placement. KTHA also operates the Visalia weekly Local Initiatives Navigation Center (LINC) at the Visalia Rescue Mission to promote homeless services including mental health assessments/enrollments, document readiness, mainstream benefit enrollment, social security advocacy, substance abuse program enrollments, veteran services, clothing assistance, and food assistance.

• Family Services of Tulare County (FSTC): At $50,000.

o FSTC administers a HUD CoC Permanent Supportive Housing (PSH) rental voucher programs that require a 25% match to secure funding. These CDBG funds will be used as a required match to secure PSH rental vouchers for chronically homeless individuals residing in Visalia. FSTC also provides ongoing case management and support services to chronically homeless persons already housed in Visalia who are currently receiving a PSH voucher. If PSH match is not secured, these currently housed chronically homeless individuals could return to homelessness.

• Kings View PATH Program (PATH): At $20,000.

o PATH will provide Housing Flex Funds as direct client assistance which includes security deposits, rental application fees, utility deposits, motel vouchers, legal document fees, and emergency rental assistance to prevent evictions. Outreach services also include case management, transportation assistance, legal document assistance, linkage to employment services, and completion of the VI-SPDAT assessment to begin permanent housing placement. In addition, 90% of Kings View PATH CDBG funds go directly to client assistance. Kings View leverages other funding sources to cover salaries and administrative costs.

• Elevate Community Services (Elevate): At $25,000.

o Elevate requires match funding to secure 22-units of HUD CoC permanent supportive housing (PSH) vouchers for FY 2024/25 for the Majestic Gardens. The Homekey contract has been executed and project completion is expected in September 2024. As a result, rental assistance and PSH match is needed in FY 2024/25. If PSH match is not secured in FY 2024/25, 22 PSH vouchers will be lost for the project and the region as they will be returned to HUD. Funding opportunities for FY 2024/25 are very limited to meet the PSH match requirement for the next fiscal year. CDBG funds will also be used to provide on-site case management and supportive services to tenants to ensure housing stability.

• Self-Help Enterprises (SHE) Eden House: At $125,000.

o SHE is requesting operational funding for Eden House, a transitional - bridge housing project for people experiencing homelessness awaiting a permanent housing unit. Operational expenses include a housing specialist to place clients into permanent housing and meal assistance for 15 designated Visalia beds. Eden House serves as an additional level of support in transitioning from homelessness including the Navigation Center to independent permanent housing.

o Eden House currently receives 15% of the city annual Permanent Local Housing Allocation (PLHA) allocation. However, in FY 2023/24, PLHA funds were 50% less than the previous year reducing the Eden House annual allocation from $277,551 to $94,622. The proposed CDBG funds will help alleviate the reduction of PLHA funds. Eden House also recently applied for $400,000 in Homeless Housing, Assistance and Prevention (HHAP) Round 5 and was not awarded any funding. As a transitional bridge housing project, it is unable to charge rents to collect ongoing revenue, such as permanent housing projects. As a result, Eden House is dependent on grant funding for ongoing operating costs. If insufficient grant funding is not secured each year, the project is at risk of closing.

CDBG public services are limited to 15% of the grant annual allocation and prior year program income. Due to limited public services funding, priority is recommended for programs that directly fund housing placements for homeless individuals through the provision of rent, vouchers, or the operation of housing units. As result the following applications were not recommended for FY 2024/2025 CDBG public services funding.

• United Way of Tulare County (UWTC): Requested $180,000 and the NOFA Committee recommends $0.

o UWTC proposed to provide homeless prevention services that includes emergency rental and/or utility assistance to prevent an eviction or utility service cutoff for low-and moderate-income households experiencing an economic hardship. The NOFA committee does not recommend awarding homeless prevention programs at this time, because priority is recommended for programs which provide housing for individuals currently experiencing homelessness. In addition, $291,599 in CDBG-CV funds were provided for rental/mortgage assistance for January 1^st through December 31^st, 2023.

• Salt + Light (SL): Requested $76,000 and the NOFA committee recommends $0.

o SL Everyone Eats Food Truck Program proposed to provide food assistance and street case management to people experiencing homelessness. The food truck is how SL has cultivated trust for relationship-based care and services, and it serves as the gateway to housing because from these touch points, then referred to case management services and social enterprise services.

o The NOFA committee does not recommend awarding this program because it does not create or fund housing as discussed above, and 72% of the overall program funding is spent on administration, which exceeds the standard set by the NOFA. Consideration was given to partially fund this program but given that other housing projects were not funded recently by another funding source, the committee is recommending focusing on housing programs.

The PY 2024 CDBG Proposed Affordable Housing Projects are listed below and included in Table 3: PY 2024 CDBG Projected Affordable Housing.

• Habitat for Humanity (Habitat): At $50,000.

o Habitat applied for $50,000 to administer an Emergency Repair and Accessibility Program (ERAP) to provide at least 8 low-income owner-occupied households with necessary emergency and accessibility repairs and improvements, and $75,000 to administer a Senior Mobile Home Repair Program (SMHRP) to provide senior and/or disabled owner-occupied mobile homeowners with necessary repairs.

o The NOFA committee recommends awarding $50,000 to administer an Emergency Repair and Accessibility Program (ERAP) to provide at least 8 low-income owner-occupied households with necessary emergency and accessibility repairs and improvements.

• Self-Help Enterprises (SHE): At $75,000.

o SHE will administer a Senior Mobile Home Repair Program (SMHRP) to provide at least 3 senior and/or disabled owner-occupied mobile homeowners with necessary repairs including roof replace/replacement, accessibility improvements, floor repair/replacement, plumbing improvements, and energy efficient improvements.

o The SMHRP policies currently limit the per unit assistance at $11,500, Staff recommends effective immediately to increase the per unit cost from $11,500 per unit to $25,000 per unit to allow for additional mobile home repairs including roof repairs. The most sought-after repairs are roof repairs ranging from $20,000 to $25,000 per mobile home. This change will provide much needed assistance.

• Code-Enforcement: At $175,000 to provide code enforcement inspections in CDBG eligible low-moderate income target areas to address substandard housing. This funding pays the full cost of one staff position which is responsible for code enforcement in CDBG Target Areas. A code enforcement staff person has been funded with CDBG annually for 25+ years. Code Enforcement activities were identified as an objective during the development of the 5-year Consolidated Plan. HUD requires consistent CDBG drawdowns to prevent becoming an at-risk grantee. Code Enforcement allows for consistent monthly CDBG drawdowns to remain in compliance with CDBG regulations.

The PY 2024 CDBG proposed facility improvement projects are listed below and included in Table 4: PY 2024 CDBG Projected Facility Improvement Projects.

• Parks Improvements - Lincoln Oval Park: At $50,000 for park improvements at Lincoln Oval Park to complete the installation of wrought iron fence around the park and provide LED lighting. On April 20, 2020, Council approved $50,000 for park improvements in the current 5-year ConPlan. A CIP number will be created.

• ADA Compliance Project - ADA Tree Wells (CP0618): At $450,000 for ADA Compliance Projects, which includes design and construction for tree well rehabilitation in the downtown area per the request of the Disability Advocacy Committee (DAC) in 2020, prior to its disbandment into the Citizens Advisory Committee. The current condition of the tree wells creates barriers to accessibility in the downtown area and this project is a high priority for Visalia’s disabled citizens. *Any increase or decrease of PY 2024 CDBG annual allocation or program income will be an adjustment to the ADA Compliance Project.

PY 2024 Proposed HOME Investment Partnership Program (HOME) Resources and Expenses:

The PY 2024 HOME projected resources include $540,000 in HOME estimated annual grant allocation, $100,000* in estimated program income, and $425,000 in prior year resources for a total of $1,065,000 as identified in Table 5: PY 2024 HOME Projected Resources. *HOME program income is normally generated from repayment of HOME funded first-time homebuyer or owner-occupied rehabilitation loans.

The PY 2024 Proposed HOME funding is listed below and included in Table 6: PY 2024 HOME Proposed Funding.

• HOME Administration: At $64,000 for PY 2024 HOME Admin and Planning. This amount is at the 10% allowed for administration of the HOME program by HUD.

• HOME CHDO Multi-Family Project Rancho Colegio: At $1,001,000 to HOME CHDO Multi-Family development project Rancho Colegio as approved by Council on August 7, 2023, and in the current 5-year ConPlan. As a HOME Participation Jurisdiction, the City is required to provide at least 15% of the annual HOME funds awarded to a Community Housing Development Organization (CHDO) to develop affordable housing. Self-Help Enterprises (SHE) is currently the only certified CHDO for the City of Visalia. The 15% CHDO set-aside has been combined with additional available HOME funds from FY 2023/24 and 2024/25 to provide for a CHDO multi-family project as specified in the current 5-year ConPlan. *Any increase or decrease of PY 2024 HOME annual allocation or program income will be an adjustment to the HOME CHDO Multi-Family project.

The PY 2019 Annual Action Plan Amendment IV:

The PY 2019 Annual Action Plan Amendment IV includes close out of the remaining $18,163 from $291,599 in CDBG CARES Act (CDBG-CV) reallocation funding awarded to the City. The CARES Act allocation was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The City received a total of $1,507,850 in CDBG-CV rounds 1 and 3 funds that were used for a Food Assistance Program and a Subsistence Payment Program for rental, mortgage, and/or utility assistance. The City was awarded an additional $291,599 in CDBG-CV Reallocation (CDBG-CV RE) funds to be used to prevent, prepare for, and respond to COVID-19. On August 1, 2022, Council adopted PY 2019 CDBG-CV Annual Action Plan Amendment III for $291,599 in CDBG-CV RE funding to a COVID-19 Rental/Mortgage Assistance Payment Program.

Council awarded RFP 22-23-25 to Self-Help Enterprises in $291,599 in CDBG-CV funds to administer a CDBG-CV Rental/Mortgage Assistance Program to working low-and moderate households impacted by the Coronavirus Pandemic for a contract term of January 1^st through December 31^st, 2023. Assistance was set at $2,000 per working household for a maximum of 6 consecutive months and was expected to assist approximately 116 households. A total of $273,435.94 of CDBG-CV RE funds were spent, and 111 households were served. As a result, $18,163.06 in CDBG-CV RE funds are remaining as shown in Table 7: CDBG-CV Reallocation Summary.

Public Hearing for Adoption: The 30-day public comment period for the review of the draft 2024 Annual Action Plan, and 2019 CDBG-CV Annual Action Plan Amendment IV began on March 15^th through April 15^th, 2024. During the 30-day public comment period the draft plans were available for public review on the City’s website at www.visalia.city <http://www.visalia.city>. Public notices were published on City’s social media outlets, and in the Visalia Times Delta on March 15^th, and March 29^th, 2024. Public notices were also included in Kings/Tulare Homeless Alliance and the Visalia Chamber of Commerce email listservs. A public hearing was conducted on April 1, 2024, to allow public comment and input. The proposed plans were also presented at the Citizens Advisory Committee (CAC) on April 3, 2024, to receive additional public input. Tonight’s public hearing is the final step in the public comment period. The adopted 2024 Annual Action Plan is due to HUD no later than May 15, 2024.

Fiscal Impact:

Approval of this item will appropriate $1,200,000 of FY 2024/25 annual CDBG grant funds and $540,000 of FY 2024/25 annual HOME grant funds, which are to be received on a reimbursement basis. This will require submission of the 2024 Annual Action Plan and to HUD in the Integrated Disbursement and Information System (IDIS) to properly track and report on separate activities. Approval of this item will also appropriate $100,000 in CDBG program income and $100,000 in HOME program income in the 2024/25 budget year. The first hearing to receive public comment on this amendment was held on April 1, 2024, and no changes were recommended. Table 8: FY 2024/2025 CDBG and HOME Annual Action Plan below summarizes the recommended 2024 CDBG and HOME funding and the proposed appropriations.

In addition, approval of this item will appropriate, and transfer $18,163 in FY 2023/24 CDBG-CV program operating to administration as shown below in Table 9: 2019 CDBG-CV Annual Action Plan Amendment IV.

Prior Council Action: • April 20, 2020: Adoption of the 5-year (2020/21 - 2024/25) Consolidated Plan. • August 1, 2022: Council adopted PY 2019 CDBG CARES Act (CDBG-CV) Annual Action Plan Amendment III for $291,599 in CDBG-CV reallocation funding to a COVID Emergency Rental/Mortgage Assistance Payment Program. • December 19, 2022: Council awarded RFP 22-23-25 to Self-Help Enterprises in $291,599 in CDBG-CV funds to administer a CDBG-CV Rental/Mortgage Assistance Program to working low-and moderate households impacted by the Coronavirus Pandemic. • August 7, 2024: Council authorized re-certification of Self-Help Enterprises as a Community Housing Development Organization (CHDO) and a preliminary award letter for a commitment to Self-Help Enterprises for Rancho Colegio up to $1,290,000 in estimated HOME funding combined FY 23/24 $630,000 and FY 24/25 $660,000 contingent on actual HOME annual allocations and program income received. • April 1, 2024: Review draft 2024 Annual Action Plan and 2019 CDBG-CV Annual Action Plan Amendment IV.

Other: None.

Alternatives: None.

Recommended Motion (and Alternative Motions if expected):

recommendation

I move to:

1. Conduct a second Public Hearing, allowing a final opportunity for citizens to provide input and comment on the proposed 2024 Annual Action Plan, and 2019 CDBG-CV Action Plan Amendment IV;

2. Adopt and appropriate the proposed 2024 Annual Action Plan, and 2019 CDBG-CV Annual Action Plan Amendment IV activities;

3. Authorize the City Manager or their designee enter into all contracts as listed in the 2024 Annual Action Plan;

4. Authorize City Manager or their designee to submit the 2024 Annual Action Plan, and 2019 CDBG-CV Annual Action Plan Amendment IV to HUD.

end

Environmental Assessment Status: N/A

CEQA Review: N/A

Attachments: • Attachment A: 2024 Annual Action Plan • Attachment B: 2024 AAP Table • Attachment C: 2019 CDBG-CV Amendment IV • Attachment D: 2024 AAP & 2019 CDBG-CV Amend IV PPT

Legislation Details