20070501_m

COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Housing

DATE:

April 11, 2007

BOARD MEETING DATE:

May 1, 2007

SPECIAL NOTICE/HEARING

10 Day Publication, Public Hearing

VOTE REQUIRED

Majority

TO:

Honorable Board of Supervisors

FROM:

Duane Bay, Director, Department of Housing

SUBJECT:

FY 2007-2008 Annual Action Plan for the Use of Federal Funds under three Programs: CDBG, ESG, and HOME

Recommendation

1.

Conduct a public hearing; and

2.

Adopt a resolution authorizing:

A. Approval of the FY 2007-2008 Annual Action Plan for the use of federal funds provided under three entitlement programs: Community Development Block Grant; Emergency Shelter Grant; and HOME Investment Partnerships; and

B. The submission of the Action Plan and required certifications to the U.S. Department of Housing and Urban Development (HUD).

Vision Alignment

Commitment: Ensure basic health and safety for all; Offer a full range of housing choices.
Goals 8 and 9: Help vulnerable people – the aged, disabled mentally ill, at-risk youth and others – achieve a better quality of life; and Housing exists for people at all income levels and for all generations of families.

The action contributes to these commitments in that the programs and projects recommended for funding in the Action Plan will improve the quality of life for County residents, particularly those with the least resources, by offering them access to quality affordable housing, enhanced community facilities, and meaningful programs that effectively address residents’ issues that impede them from fuller participation in prosperity-building activities in the County.

Performance Measures:

Number of Projects/Programs Assisted

FY 2006-07
Actual

39*

FY 2007-08
Target

23*

* The performance target for FY 07-08 differs markedly from FY 06-07 due to: (1) minimum contract amount for FY 07-08 of $15,000 for most contracts, resulting in fewer programs assisted; and (2) FY 06-07 performance measure included four housing projects, while for FY 07-08, CDBG/HOME funding for housing projects will be allocated on a quarterly schedule starting July 2007.

Background

HUD provides annual funding allocations to the County under three programs: Community Development Block Grant (CDBG); HOME Investment Partnerships (HOME); and Emergency Shelter Grant (ESG). In terms of CDBG, the funds are provided to the County on behalf of itself and the 16 small cities. These 17 jurisdictions comprise the Urban County. (The four largest cities – Daly City, South San Francisco, San Mateo, and Redwood City – each receive a separate CDBG entitlement from HUD.)

HOME funds are received by the County as a HOME Consortium, which consists of the Urban County and the City of South San Francisco. No longer members of the County HOME Consortium, the Cities of Daly City, San Mateo, and Redwood City, each receive their own separate HOME allocations.

Regarding ESG funds, the County is the sole recipient for countywide distribution.

The three HUD programs require a locally-defined public participation process for the distribution of funds. The County’s public process starts with an annual priorities-setting community meeting in the Fall, followed by the issuance of a Notice of Funding Availability and a formal application process. The County’s public process is facilitated by a 15-member Housing and Community Development Committee (HCDC). Preliminary staff recommendations are made to the HCDC. Through three HCDC subcommittees, each of which presides over a public hearing with the funding applicants, Staff’s recommendations may be re-adjusted for Board of Supervisors’ consideration and approval. The final piece of the public process is the public hearing held by the Board, after which the Action Plan is finalized for submission to HUD, due no later than May 15 of each year.

Discussion

Dwindling HUD Funding
HUD funding to the County has been dwindling for the past decade - all this against the backdrop of continually rising costs and needs. While FY 2007-08 CDBG funding of $2.9 million will be a half percent lower than the current year’s CDBG funding, the new funding reflects a dramatic 25% cut from 12 years ago, a difference of almost a million dollars.

HOME funding has also eroded over time. Four years ago in FY 2003-04 when the City of Daly City dropped out of the HOME Consortium to receive its own separate allocation of HOME funds, the County received $1.9 million. For next fiscal year the County, in receiving $1.67 million, will sustain a 10% HOME reduction from FY 2003-04. Meanwhile, housing development costs – land, construction, and financing – continue to soar.

ESG funding has remained somewhat steady these past five years at more or less $125,000 – but because the allocation is relatively small, the FY 2007-08 grant of $126,275 reflects a $836 negligible increase.

Program Budget

The total FY 2007-2008 Action Plan budget, including loan repayments and reprogrammed funds, is $6.2 million, a 10% reduction from the current year’s budget, which itself represented a 9% reduction from the previous year. The new HUD allocation includes another year of a special HOME set-aside of some $30,500 for the American Dream Downpayment Initiative (ADDI), financial assistance to low-income homebuyers.

The FY 2007-2008 budget is summarized below under Total Sources, with allocations for specific categories under Total Uses:

TOTAL SOURCES

CDBG Grant

$ 2,913,272

HOME/ADDI Grant

$ 1,667,393

ESG Grant

$ 126,275

HOME ADDI Grant

$ 30,589

CDBG Reprogrammed

$ 45,777

HOME Reprogrammed

$ -

CDBG Program Income (Loan Repayments)

$ 1,487,685

HOME Program Income (Loan Repayments)

$ -

TOTAL SOURCES

$ 6,270,991

TOTAL USES

Housing Devt./ADDI

$ 2,159,168

34.4%

Minor Home Repair Programs

$ 291,327

4.6%

Public Facilities/ Micro-Enterprise Assist.

$ 293,933

4.7%

Public Services/Emergency Shelter Operations

$ 556,952

8.9%

Fair Housing

$ 40,785

0.7%

SMC Housing Rehab Program

$ 1,250,000

19.9%

Section 108 Loan Repayments

$ 629,405

10.0%

Program Management & Adm.

$ 1,049,421

16.7%

TOTAL USES

$ 6,270,991

100.0%

Funding Recommendations

As noted earlier, the public participation process involves staff making preliminary recommendations to the HCDC, which in turn may either re-affirm or modify the recommendation for Board consideration. On March 22, 2006, after three HCDC Subcommittee hearings held the prior week, the HCDC convened to review and ratify the Action Plan for Board of Supervisors’ approval. Attachment A shows the proposed Action Plan, highlighted below:

§ In the attempt to respond more opportunistically to housing production needs, the housing development portion of the CDBG and HOME funding of $2.1 million have all been put in the Housing Reserve Fund, to be accessed on a quarterly basis until the funds are exhausted. The first application deadline will be June 1 with the first HCDC review to occur in July 2007. Another $410,800 has been set aside in anticipation of interest payments on the County’s pending Section 108 loan from HUD of $7.145 million for the 123-unit Trestle Glen at El Camino Transit Village next to the Colma BART Station.

§ Public Service applications were reviewed against Board-established priorities of emergency shelter and transitional housing operations; safety-net provider agencies; and other services that keep people in their homes. The category of Public Services, which includes Emergency Shelter Operations, has always been small, this year comprising almost 9% ($556,952) of the budget. Funding for this category is limited under CDBG Program rules to 15% of the annual CDBG Grant. ESG funds augment this category but, as noted earlier, the County’s ESG allocation has always been modest ($125,000+) in relation to CDBG and HOME. HOME funds cannot be used for this category. All but one of the programs recommended for funding represent continued funding.

§ The HCDC has established a working goal of recommending a minimum of $15,000. Contract amounts smaller than $15,000 tend not to result in a measurable service impact and do not justify staff contract administration costs. All but one program have been recommended for $15,000 or greater.

HUD Certifications

In order to receive CDBG, HOME, and ESG funds, the County must submit pro-forma certifications to HUD assuring the County: (1) will not discriminate in providing services; (2) is following a citizens participation process delineated in 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 Annual Action Plan, the Board is, therefore, asked to approve the aforementioned certifications.

County Counsel Review

County Counsel has reviewed and approved the Resolution.

Fiscal Impact

The Action Plan is included in the Department of Housing Budget for FY 2007-08. There is no Net County Cost.



COUNTY OF SAN MATEO Inter-Departmental Correspondence
Department of Housing

DATE:				April 11, 2007
BOARD MEETING DATE:				May 1, 2007
SPECIAL NOTICE/HEARING				10 Day Publication, Public Hearing
VOTE REQUIRED				Majority

TO:		Honorable Board of Supervisors
FROM:		Duane Bay, Director, Department of Housing
SUBJECT:		FY 2007-2008 Annual Action Plan for the Use of Federal Funds under three Programs: CDBG, ESG, and HOME

Recommendation

1.	Conduct a public hearing; and

2.	Adopt a resolution authorizing:
	A. Approval of the FY 2007-2008 Annual Action Plan for the use of federal funds provided under three entitlement programs: Community Development Block Grant; Emergency Shelter Grant; and HOME Investment Partnerships; and
	B. The submission of the Action Plan and required certifications to the U.S. Department of Housing and Urban Development (HUD).

Vision Alignment
Commitment: Ensure basic health and safety for all; Offer a full range of housing choices. Goals 8 and 9: Help vulnerable people – the aged, disabled mentally ill, at-risk youth and others – achieve a better quality of life; and Housing exists for people at all income levels and for all generations of families.

The action contributes to these commitments in that the programs and projects recommended for funding in the Action Plan will improve the quality of life for County residents, particularly those with the least resources, by offering them access to quality affordable housing, enhanced community facilities, and meaningful programs that effectively address residents’ issues that impede them from fuller participation in prosperity-building activities in the County.

Performance Measures:
Number of Projects/Programs Assisted			FY 2006-07 Actual 39*		FY 2007-08 Target 23*

* The performance target for FY 07-08 differs markedly from FY 06-07 due to: (1) minimum contract amount for FY 07-08 of $15,000 for most contracts, resulting in fewer programs assisted; and (2) FY 06-07 performance measure included four housing projects, while for FY 07-08, CDBG/HOME funding for housing projects will be allocated on a quarterly schedule starting July 2007.

Background
HUD provides annual funding allocations to the County under three programs: Community Development Block Grant (CDBG); HOME Investment Partnerships (HOME); and Emergency Shelter Grant (ESG). In terms of CDBG, the funds are provided to the County on behalf of itself and the 16 small cities. These 17 jurisdictions comprise the Urban County. (The four largest cities – Daly City, South San Francisco, San Mateo, and Redwood City – each receive a separate CDBG entitlement from HUD.)

HOME funds are received by the County as a HOME Consortium, which consists of the Urban County and the City of South San Francisco. No longer members of the County HOME Consortium, the Cities of Daly City, San Mateo, and Redwood City, each receive their own separate HOME allocations.

Regarding ESG funds, the County is the sole recipient for countywide distribution. The three HUD programs require a locally-defined public participation process for the distribution of funds. The County’s public process starts with an annual priorities-setting community meeting in the Fall, followed by the issuance of a Notice of Funding Availability and a formal application process. The County’s public process is facilitated by a 15-member Housing and Community Development Committee (HCDC). Preliminary staff recommendations are made to the HCDC. Through three HCDC subcommittees, each of which presides over a public hearing with the funding applicants, Staff’s recommendations may be re-adjusted for Board of Supervisors’ consideration and approval. The final piece of the public process is the public hearing held by the Board, after which the Action Plan is finalized for submission to HUD, due no later than May 15 of each year.

Discussion
Dwindling HUD Funding HUD funding to the County has been dwindling for the past decade - all this against the backdrop of continually rising costs and needs. While FY 2007-08 CDBG funding of $2.9 million will be a half percent lower than the current year’s CDBG funding, the new funding reflects a dramatic 25% cut from 12 years ago, a difference of almost a million dollars.
HOME funding has also eroded over time. Four years ago in FY 2003-04 when the City of Daly City dropped out of the HOME Consortium to receive its own separate allocation of HOME funds, the County received $1.9 million. For next fiscal year the County, in receiving $1.67 million, will sustain a 10% HOME reduction from FY 2003-04. Meanwhile, housing development costs – land, construction, and financing – continue to soar. ESG funding has remained somewhat steady these past five years at more or less $125,000 – but because the allocation is relatively small, the FY 2007-08 grant of $126,275 reflects a $836 negligible increase. Program Budget The total FY 2007-2008 Action Plan budget, including loan repayments and reprogrammed funds, is $6.2 million, a 10% reduction from the current year’s budget, which itself represented a 9% reduction from the previous year. The new HUD allocation includes another year of a special HOME set-aside of some $30,500 for the American Dream Downpayment Initiative (ADDI), financial assistance to low-income homebuyers. The FY 2007-2008 budget is summarized below under Total Sources, with allocations for specific categories under Total Uses: TOTAL SOURCES CDBG Grant $ 2,913,272 HOME/ADDI Grant $ 1,667,393 ESG Grant $ 126,275 HOME ADDI Grant $ 30,589 CDBG Reprogrammed $ 45,777 HOME Reprogrammed $ - CDBG Program Income (Loan Repayments) $ 1,487,685 HOME Program Income (Loan Repayments) $ - TOTAL SOURCES $ 6,270,991 TOTAL USES Housing Devt./ADDI $ 2,159,168 34.4% Minor Home Repair Programs $ 291,327 4.6% Public Facilities/ Micro-Enterprise Assist. $ 293,933 4.7% Public Services/Emergency Shelter Operations $ 556,952 8.9% Fair Housing $ 40,785 0.7% SMC Housing Rehab Program $ 1,250,000 19.9% Section 108 Loan Repayments $ 629,405 10.0% Program Management & Adm. $ 1,049,421 16.7% TOTAL USES $ 6,270,991 100.0%

Funding Recommendations As noted earlier, the public participation process involves staff making preliminary recommendations to the HCDC, which in turn may either re-affirm or modify the recommendation for Board consideration. On March 22, 2006, after three HCDC Subcommittee hearings held the prior week, the HCDC convened to review and ratify the Action Plan for Board of Supervisors’ approval. Attachment A shows the proposed Action Plan, highlighted below:
§ In the attempt to respond more opportunistically to housing production needs, the housing development portion of the CDBG and HOME funding of $2.1 million have all been put in the Housing Reserve Fund, to be accessed on a quarterly basis until the funds are exhausted. The first application deadline will be June 1 with the first HCDC review to occur in July 2007. Another $410,800 has been set aside in anticipation of interest payments on the County’s pending Section 108 loan from HUD of $7.145 million for the 123-unit Trestle Glen at El Camino Transit Village next to the Colma BART Station. § Public Service applications were reviewed against Board-established priorities of emergency shelter and transitional housing operations; safety-net provider agencies; and other services that keep people in their homes. The category of Public Services, which includes Emergency Shelter Operations, has always been small, this year comprising almost 9% ($556,952) of the budget. Funding for this category is limited under CDBG Program rules to 15% of the annual CDBG Grant. ESG funds augment this category but, as noted earlier, the County’s ESG allocation has always been modest ($125,000+) in relation to CDBG and HOME. HOME funds cannot be used for this category. All but one of the programs recommended for funding represent continued funding. § The HCDC has established a working goal of recommending a minimum of $15,000. Contract amounts smaller than $15,000 tend not to result in a measurable service impact and do not justify staff contract administration costs. All but one program have been recommended for $15,000 or greater. HUD Certifications In order to receive CDBG, HOME, and ESG funds, the County must submit pro-forma certifications to HUD assuring the County: (1) will not discriminate in providing services; (2) is following a citizens participation process delineated in 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 Annual Action Plan, the Board is, therefore, asked to approve the aforementioned certifications. County Counsel Review County Counsel has reviewed and approved the Resolution.
Fiscal Impact
The Action Plan is included in the Department of Housing Budget for FY 2007-08. There is no Net County Cost.