Visalia City Council - File #: 25-0724

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Agenda Item Wording:

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Public Hearing to review draft 2026 Annual Action Plan and 2025 Annual Action Plan Amendment - Conduct the first public hearing to review and comment on the proposed use of U.S. Department of Housing and Urban Development Community Development Block Grant (CDBG) and HOME Investment Partnership Program for the Program Year (PY) 2026 Annual Action Plan and PY 2025 CDBG Annual Action Plan Amendment.

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Agenda Date: 04/06/2026

Prepared by: Margie Perez, Housing Specialist, margie.perez@visalia.gov, (559) 713-4460; Nichol Ritchie, Finance Manager, nichol.ritchie@visalia.gov, (559) 713-4379; Renee Nagel, Finance Director, renee.nagel@visalia.gov, (559) 713-4375

Department Recommendation: It is recommended that the City Council provide comments and conduct a public hearing on the following:
- PY 2026 CDBG Annual Action Plan;
- PY 2026 HOME Annual Action Plan; and
- PY 2025 CDBG Annual Action Plan Amendment.

Summary:

Staff is seeking direction from the City Council and public comment on the priorities and activity allocations proposed for the 2^nd year of the current 5-year Consolidated Plan (ConPlan) in the PY 2026 (Fiscal Year 2026-2027) Annual Action Plan and PY 2025 (Fiscal Year 2025-2026) Annual Action Plan Amendment. The proposed programs for the draft PY 2026 Annual Action Plan and PY 2025 Annual Action Plan Amendment were formulated based upon applications received in response to a Notice of Funding Availability (NOFA) released by the City to seek applications for the available funding. At this time, Council can change the draft PY 2026 Annual Action Plan and PY 2025 Annual Action Plan Amendment; however, significant changes would require an amendment to the current 5-year ConPlan.

Staff will incorporate any requested changes and return to Council with the final 2026 Annual Action Plan on April 20, 2026, to hold a public hearing for adoption. The final plan will include any comments provided by Council today, those received at meetings with the Citizens Advisory Committee (CAC) on April 1, 2026, and all public comments received during the 30-day Public Review Period beginning March 20, 2026, through April 20, 2026. The adopted 2026 Annual Action Plan is due to HUD by May 15, 2026.

Background Discussion:

The City of Visalia is an entitlement community (EC) for Community Development Block Grant (CDBG) funds and a participating jurisdiction (PJ) for the HOME Investment Partnerships Program. This allows the City to receive annual federal funding through U.S. Department of Housing and Urban Development (HUD). This provides the City with annual direct grant funding primarily for the benefit of low-income persons and households. As required by HUD, the City develops a 5-year Strategic Plan based on a Community Needs Assessment which is reviewed and approved by Council during the development of the Consolidated Plan (ConPlan). As also required by HUD, the City develops an Annual Action Plan each year for the purpose of implementing the activities included in the ConPlan. The Program Year (PY) 2026 Annual Action Plan is the second year of the current 5-year ConPlan, and the plan objectives have been produced based upon those established in the City’s 5-year Strategic Plan.

Staff is seeking direction from the City Council on the priorities and activity allocations proposed for the second year of the current 5-year Consolidated Plan (ConPlan) in the PY 2026 (Fiscal Year 2026-2027) Annual Action Plan. The proposed programs for the draft PY 2026 Annual Action Plan were formulated based upon applications received in response to a Notice of Funding Availability (NOFA) released by the City to seek applications for the available funding. At this time, Council can change the draft PY 2026 Annual Action Plan; however, significant changes would require an amendment to the current 5-year ConPlan.

Once public comment and Council direction have been received, staff will incorporate any changes directed by Council and return with the final PY 2026 Annual Action Plan and PY 2025 Annual Action Plan on April 20, 2026, to hold a public hearing for adoption. The final plan and amendment will include any comments provided by Council today, those received during the Citizens Advisory Committee (CAC) on April 1, 2026, and all public comments received during the 30-day public comment period beginning on March 20, 2026, through April 20, 2026. The adopted PY 2026 Annual Action Plan must be submitted to HUD by May 15, 2026.

PY 2026 proposed Annual Action Plan: The proposed PY 2026 Annual Action Plan consists of an estimated $1,200,000 in CDBG projected resources, and $525,000 in HOME projected resources. The PY 2026 proposed CDBG and HOME resources, activities, and funding allocations are explained in further detail below.

Projected PY 2026 Community Development Block Grant (CDBG) Resources and Expenses: The PY 2026 CDBG resources consists of $1,150,000 in estimated annual grant allocation, and $50,000 in estimated program income, for an estimated total of $1,200,000 in PY 2026 CDBG resources as identified in Table 1: 2026 CDBG Projected Resources. *CDBG program income is generated from repayments of CDBG funded first-time homebuyer and owner-occupied rehabilitation loans.

The proposed programs 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 21, 2025.

The City released a NOFA from January 5^th, 2026, through February 5^th, 2026, to solicit applications for the administration of the City’s PY 2026 CDBG public services, single-family home repair program, and senior/disabled mobile home repair program. The NOFA was published in the Visalia Times Delta on 1/2/26 and 1/7/26. 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 on 1/6/26 and 1/23/26, which has over 630 recipients.

CDBG NOFA Committee Recommended 2026 Annual Action Plan Activities:

The proposed PY 2026 Annual Action Plan activities and their respective funding are summarized in Attachment B. Staff requests that Council comment, discuss, and direct any requested changes to the proposed project and program allocations.

CDBG Admin & Planning:

The 2026 CDBG administration and planning budget is $240,000, which is 20% of the 2026 grant allocation and program income. The administration budget will pay for staff and operations to oversee the CDBG program.

CDBG Public Services:

CDBG federal regulations restrict public services to 15%. This means that $180,000 is available from the 2026 grant allocation and prior year program income. The City received $395,217 in request. All requests were reviewed and ranked by an evaluation committee. 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. The NOFA also imposed the limitation of program administration (staffing, operating, etc.) to 25% of total program budgets. The PY 2026 Proposed CDBG Public Services are listed below and included in Table 2: PY 2026 CDBG Proposed Public Services.

As a result of the release of the PY 2026 CDBG NOFA, the City received the following public service applications:

• Kings/Tulare Homeless Alliance (KTHA): Requested $20,000 and the NOFA committee recommends $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 end 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 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): Requested $50,000 and the NOFA committee recommends $50,000.

o FSTC administers a HUD CoC Permanent Supportive Housing (PSH) rental voucher program that requires 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 living on the streets in Visalia.

• Community Services, Employment &Training (CSET): Requested $25,000 and the NOFA committee recommends $30,000.

o CSET will provide fair housing education outreach and workshops to Visalia residents. Fair housing education services are a requirement to remain compliant with our Housing Element and 5-year ConPlan. CSET requested $25,000; however, they exhausted their FY 2025/26 allocation by January 2026. As a result, the NOFA committee recommends providing an additional $5,000 to allow fair housing education services and outreach through the end of the next fiscal year and remaining compliant with our Housing Element and ConPlan.

• Salt + Light (S+L): Requested $300,217 and the NOFA committee recommends $80,000.

o S+L will provide direct homeless services which will include street outreach, case management, housing search and housing placement assistance, documentation assistance, landlord coordination, transportation assistance, completion of the VI-SPDAT assessment, Homeless Management Information System (HMIS) data entry, and participate in the Coordinated Entry System. Direct client assistance includes rental application fees, security deposits, client moving costs, and basic palliative care items including hygiene kits.

Due to the limited funding, staff worked with S+L to reduce the scope which eliminated food services.

CDBG Affordable Housing Projects:

• The PY 2026 CDBG Proposed Affordable Housing Projects are listed below and included in Table 3: PY 2026 CDBG Projected Affordable Housing Projects. The City received $395,000 in requests and is recommending to fund $395,000 based on available funding.

• Self-Help Enterprises (SHE) - Single-Family Home Repair Program: Requested $100,000 and the NOFA committee recommends $100,000.

o SHE applied to administer a Single-Family Home Repair Program (SFHRP) to provide at least 3 low-income senior and/or disabled owner-occupied homeowners with necessary repairs including roof repair/replacement, accessibility improvements, floor repair/replacement, and energy efficient improvements.

o The SFHRP will provide up to $25,000 in assistance per household to allow for additional home repairs including roof repairs. The most sought-after repairs are roof repairs ranging from $20,000 to $25,000 per home.

• Self-Help Enterprises (SHE) - Senior Mobile Home Repair Program: Requested $100,000 and the NOFA committee recommends $100,000.

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

o The SMHRP will provide up to $25,000 in assistance per mobile home, to allow for additional mobile home repairs including roof repairs. The most sought-after senior repairs are roof repairs ranging from $20,000 to $25,000 per mobile home.

• Code-Enforcement: Requested $195,000 and the NOFA committee recommends $195,000.

o The NOFA committee recommends $195,000 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. 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. Code enforcement also generates approximately $35,000 in CDBG program income that is returned to the program.

CDBG Facility Improvement Projects:

The PY 2026 CDBG proposed facility improvement projects are listed below and included in Table 4: PY 2026 CDBG Projected Facility Improvement Projects.

• Parks Improvements - Lincoln Oval Park (CP0752): At $140,000 for park improvements at Lincoln Oval Park to complete the installation of a wrought iron fence around the park and provide LED lighting. On April 21, 2025, Council approved CDBG funds for park improvements in the current 5-year ConPlan. The Lincoln Oval project CP0752 currently has budget $50,000 in CDBG funds approved by Council on April 15, 2024 in the PY 2024 Action Plan, bringing the updated budget to $190,000 in CDBG funds due to actual project costs.

• ADA Compliance Project - ADA Tree Wells (CP0618): At $245,000 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), prior to its transition 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. The ADA Tree Wells project CP0618 will have a budget of $900,000 in the PY 2025 Action Plan Amendment, bringing the updated budget to $1,145,000 in CDBG funds. *Any increase or decrease of PY 2026 CDBG annual allocation or program income will be an adjustment to the ADA tree wells compliance project CP0618.

Projected PY 2026 HOME Investment Partnership Program (HOME) Resources and Expenses:

The PY 2026 HOME projected resources include $425,000 in HOME estimated annual grant allocation, $100,000* in estimated program income, for an estimated total of $525,000 as identified in Table 5: PY 2025 HOME Projected Resources. *HOME program income is normally generated from repayment of HOME funded first-time homebuyer or owner-occupied rehabilitation loans.

The PY 2026 Proposed HOME funding is listed below and included in Table 6: PY 2026 HOME Proposed Funding.

• HOME Administration: $50,000 for PY 2026 HOME Admin and Planning. This amount is within the 10% allowed for administration of the HOME program by HUD.

• HOME CHDO - Crescent Meadows Senior Affordable Housing Project (CP0792): $475,00 toward construction of Crescent Meadows an 80-unit senior affordable housing project within the City of Visalia for low-income seniors aged 62 years as approved by Council in the 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 CHDO for the City of Visalia. The HOME CHDO 15% has been combined with additional HOME funds to provide for a HOME CHDO senior affordable housing project as specified in the current 5-year ConPlan. The HOME CHDO - Crescent Meadows project CP0752 currently has budget $226,944 in HOME funds approved by Council on April 21, 2025, in the PY 2025 Annual Action Plan, bringing the updated budget to $701,944 in HOME funds. The City’s total HOME commitment is $1 million from FY 25/26, FY 26/27, and FY 27/28 of HOME funds to the Crescent Meadows Project, which was approved by Council on 7/21/2025. **Any increase or decrease of PY 2026 HOME annual allocation, program income, and/or prior year resources will be an adjustment to Crescent Meadows the HOME senior affordable housing project CP0792.

Proposed FY 2025/26 Annual Action Plan Amendment (see Attachment “C”):

The Program Year (PY) 2025 Community Development Block Grant (CDBG) Annual Action Plan Amendment includes reappropriating $900,000 of unspent emergency shelter development funds (CP0793) to the ADA tree well compliance project (CP0618), as shown below in Table 7: Proposed PY 2025 CDBG Annual Action Plan Amendment. The purpose of the PY 2025 CDBG Annual Action Amendment is to allow additional time to plan for the development of an emergency shelter.

Public Hearing for Adoption: Staff will return to Council with the final drafts of the PY 2026 Annual Action Plan, and PY 2025 Action Plan Amendment on April 20, 2026, to hold a public hearing for adoption. This will include the comments provided by Council today, those received at the Citizens Advisory Committee (CAC) meeting on April 1, 2026, and all public comments received during the 30-day public review period commencing March 20, 2026, through April 20, 2026, including those received tonight, and at the April 20^th public hearing. The adopted PY 2026 Annual Action Plan must be submitted to HUD no later than May 15, 2026.

Fiscal Impact including annual maintenance and operating costs: All expenditures proposed in this item will be funded with CDBG and HOME grant funds and no General Fund money is requested or included. The final budgets for CDBG and HOME, as approved in the 2026 Annual Action Plan and 2025 Annual Action Plan Amendment will be appropriated at the April 20, 2026, City Council meeting.

Prior Council Action: • April 15, 2024 - Adoption of the 2024 Annual Action Plan • April 21, 2025 - Adoption of the 5-year (2025/26 - 2029/30) Consolidated Plan and 2025 Annual Action Plan. • July 21, 2025 - Authorized recertification of Self-Help Enterprises as a Community Housing Development Organization (CHDO); and commitment of $1 million in HOME funds for the development of Crescent Meadow a senior affordable housing project.

Alternatives: None Recommended

Recommended Motion (and Alternative Motions if expected):

recommendation

No motion is required.

Environmental Assessment Status: N/A

CEQA Review: N/A

Deadline for Action: 04/06/2026

Attachments:

• Attachment A: Draft 2026 Annual Action Plan

• Attachment B: Draft 2026 AAP Table

• Attachment C: Draft 2025 Action Plan Amendment

• Attachment D: Draft 2026 AAP PowerPoint

Strategic Goal: Indicates which City Strategic Goal(s) this item supports. Check all that apply.

☐Economic Vitality

☐ Organizational Excellence

☐Fiscal Strength

☐ Infrastructure & Growth

☒ Quality of Life