COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Services Agency

Office of Housing

DATE:

April 23, 2004

BOARD MEETING DATE:

May 4, 2004

TO:

Honorable Board of Supervisors

FROM:

Maureen Borland, Director, Human Services Agency

Steve Cervantes, Director, Office of Housing

SUBJECT:

FY 2004-05 ACTION PLAN FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG), EMERGENCY SHELTER GRANT (ESG) AND HOME INVESTMENT PARTNERSHIP ACT (HOME) PROGRAMS.

Recommendation

1.

Conduct a public hearing; and

2.

Adopt a resolution authorizing:

A.

Approval of the FY 2004-05 Action Plan for the use of funds provided under CDBG, ESG and HOME; and

B.

The submittals of required certifications to the United States Department of Housing & Urban Development (HUD).

Background

HUD provides annual allocations of CDBG funds to the County on behalf of itself and the 16 small cities. In cooperation with the small cities, the County receives the CDBG funds as an Urban County entity. In addition to the 16 small cities, each of the remaining four, the largest cities, receive a separate allocation of CDBG funds from HUD.

HUD also provides annual allocations under the HOME to local HOME Participating Jurisdictions (PJs). Within the County, there are four PJs - the County HOME Consortium, which includes the Urban County and the City of South San Francisco, and each of the three other large cities (Daly City, San Mateo, and Redwood City).

The County is the sole recipient of ESG funds for local distribution. HUD funding requires a

locally-defined public participation process for their funds distribution. Last year, the Office of Housing streamlined the funding processes of these programs by facilitating a single application cycle. Consolidating the application processes has eased the course for both: applicants and staff: (1) For applicants, it has reduced paperwork, especially from housing developers who no longer have to respond to multiple Office of Housing funding notices; and (2) For staff, the process allows more latitude on funding decisions for projects requiring multiple funding sources.

The consolidation necessitated the merging of the two public advisory bodies, now a 15-member Housing and Community Development Committee (HCDC). The HCDC is empowered through a public process to determine annual funding priorities for the three programs and to make funding recommendations to the Board of Supervisors. The HCDC, through its three subcommittees, hold public hearings with the applicants prior to finalizing their recommendations.

The final piece of the public review process is the public hearing presided by the Board of Supervisors after which the Action Plan is finalized for submission to HUD, due no later than May 15, 2004.

Discussion

HUD Allocations/Program Budget

The federal trend of declining HUD funding, evident for the past few years, will continue into the new fiscal year. The County expects a net decrease of 1.7% (-$94,255) in its combined CDBG, HOME, and ESG entitlements.

The HUD decrease, however, will be offset by approximately $198,600 of additional HOME funds under the new American Dream Down payment Initiative (ADDI). These funds can only be used to assist low-income first time homebuyers, up to $10,000 assistance per family. Since the other HOME PJs in the County were not qualified to receive the ADDI funding, these funds will be used on a countywide basis to leverage the County's First-Time Homebuyer Program.

The Action Plan budget for FY 2004-05 is $7.9 million, and is made up of the following sources: $5.4 million from the annual HUD CDBG, HOME and ESG entitlement grants; $198,600 from the new American Dream Program under HOME; and $2.3 million from various CDBG loan repayments, reprogrammed and unprogrammed funds.

The focal point of the Action Plan is housing development, at $3.2 million, which comprises 41% of the budget. Increasing the supply of affordable housing has been continually identified by County's Consolidated Plan as critical to meeting the goals to provide affordable housing opportunities for lower-income individuals and special needs group. Providing ample affordable housing is also integral to maintaining a healthy County economy.

Public Process

In the spirit of HUD's citizen participation requirements, the HCDC Subcommittees held three public hearings in mid-March 2004, with the applicants on their proposals for funding. In late March, the HCDC reconvened as a whole in a public session to review and ratify the funding subcommittee recommendations for Board action.

Today's public hearing represents the culmination of the public review process. At the close of this public hearing, the Board is asked to finalize the recommendations for submission to HUD as part of the HUD required 5-year Consolidated Plan (Housing and Community Development Strategy). The FY 2004-05 Action Plan represents the second year submission of the current Consolidated Plan.

HCDC and Staff Follow-Up Recommendations

The County received requests totaling over $15 million which exceeded funding availability of $7.9 million. The attached FY 2004-05 Action Plan enumerates the initial requests, and separates Staff and HCDC recommendations.

The HCDC reviewed the proposals on the following categories: housing development; nonprofit-administered housing rehabilitation programs; public facilities; micro-enterprise assistance; and public services; Other categories are: program administration, the County-administered housing rehabilitation revolving loan program, and certain Office of Housing-discretionary projects (e.g., the upgrading of two County-owned shelters; the HUD-required homeless information management system).

A CDBG pre-commitment of $50,000 from the FY 2005-06 funding cycle is further recommended by the HCDC.

The HCDC recommendations are made to the Office of Housing, which is now submitting the finalized recommendations to the Board, as summarized in the attached table. The Office of Housing has made three revisions to the HCDC recommendations - two involve funding and the third involves a date change in a funding condition: (1) Community Gatepath (#22) is recommended for $36,932 provided it provides a satisfactory strategic facilities plan for County review by June 30, 2004; (2) CORA (#39) is recommended for $30,000. Reasons for these modifications are noted in the attached County of San Mateo Action Plan FY 2004-05 Table, under the column Notes, but essentially the County has a long history with Community Gatepath and CORA, both programs which have provided reliable and important services to County residents; and (3) El Concilio's (#25) deadline to close on its purchase is moved back from April 30, 2004 to June 30, 2004 in order for it to be approved for additional funding of $25,000 toward project renovation.

HUD Certifications

In order to receive CDBG, HOME, and ESG funds, the County must submit pro-forma certifications to HUD assuring that the County: (1) will not discriminate in providing services; (2) is following a detailed citizens participation process delineating a public input plan; (3) is providing a drug-free workplace for staff; and (4) has adopted and is enforcing a policy prohibiting the excessive use of force against any individuals engaged in non-violent civil rights demonstrations. In approving the Action Plan, the Board is therefore asked to approve the aforementioned certifications.

Vision Alignment

The CDBG/ESG/HOME Action Plan keeps three commitments: (1) Realize the potential of our diverse population, goal number 2; Civic engagement including voting, public service charitable giving, volunteerism, and participation in public discussions of important issues; (2) Offer a full range of housing choices, goal number 9: Housing exists for people at all income levels for all generations of families; and (3) Responsive, effective and collaborative government, goal number 20: Government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. The Action Plan contributes to these commitments and goals by its very public participation activities which invoke a civic engagement process based on careful consideration of future impact, including the assurance of affordable housing opportunities for families and various special needs populations.

Fiscal Impact

Funding will be provided under the CDBG, ESG and HOME programs with no general funds involved. There is no Net County Cost from this action. Each project or proposal will be individually approved under a separate funding agreement at a later date.