Inter-Departmental Correspondence

Department of Housing



April 7, 2009


May 5, 2009


10 Day Publication, Public Hearing





Honorable Board of Supervisors


Duane Bay, Director, Department of Housing


Approval of the FY 2009-2010 Annual Action Plan for the use of Federal Funds utilized in Department of Housing funding programs including Community Development Block Grant (CDBG), Emergency Shelter Grant (ESG), and HOME Investment Partnerships (HOME) and the submission of the Action Plan and required certifications to the U.S. Department of Housing and Urban Development (HUD).



Adopt a Resolution:



Adopt a resolution authorizing:


Approval of the FY 2009-2010 Annual Action Plan for the use of Federal Funds utilized in Department of Housing funding programs including Community Development Block Grant (CDBG), Emergency Shelter Grant (ESG), and HOME Investment Partnerships (HOME) and 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.
Goal 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 this commitment and goal 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:


FY 2008-09

FY 2009-10

Number of Projects/Programs Assisted





HUD provides annual funding allocations to the County under programs including 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 in its definition as an Urban County representing 16 small “non-entitlement” cities and all unincorporated areas of san Mateo County. The four largest cities in San Mateo County (Daly City, South San Francisco, San Mateo, and Redwood City) meet HUD’s definition of being “entitlement” cities and each receive their own separate CDBG grant 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, which is an entitlement city and could receive its own HOME allocation but has chosen to remain with the Urban County in the HOME Consortium.  The other three entitlement cities opted out of the HOME Consortium several years ago and each receive their own separate HOME allocation.


The County is the sole recipient from HUD for countywide distribution of ESG funds.


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 (NOFA), and a formal application process. The NOFA budget follows the previous fiscal year’s funding allocation until HUD confirms the allocation to the County, which may result in a marginal increase/decrease for the upcoming year. The County’s public process is facilitated by the 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, HCDC may choose to concur with staff recommendations or may choose to revise with their own recommendations to the Board of Supervisors. 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.



Throughout the years HUD funding to the County has been diminishing gradually even though project costs and needs continues to rise. While FY 2009-10 CDBG funding is not expected to decrease from the previous year’s allocation, the current funding level does represent a 25% decrease from the funding level of 13 years ago, a difference of almost a one million dollars.


HOME funding has also decreased over time. Five 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 the fiscal year 2009-10 the County will receive just $1.6 million. Meanwhile, housing development costs such as land, construction, and financing continue to rise in the current weakened economy.


ESG funding has generally stayed constant within the last 6 years at more or less $125,000 thousand dollars inclusive of the FY 2009-10 projected allocation.


Program Budget
The total FY 2009-2010 Action Plan budget, including repayment and reprogrammed funds, is approximately $5.9 million. The table below summarizes HUD funding under CDBG, HOME and ESG, as well as a the one time allocation of the Economic Development Initiative (EDI)-Special Project Grant in the amount of $147,000 and a HOME set-aside of $12,359 for the American Dream Downpayment Initiative (ADDI).




CDBG Grant

$ 2,808,770

HOME Grant

$ 1,617,603

ESG Grant

$ 125,522


$ 12,359


$ 147,000

CDBG Reprogrammed

$ 251,506

HOME Reprogrammed

$ 117,640

CDBG Program Income (Loan Repayments)

$ 805,574

HOME Program Income (Loan Repayments)

$ 53,574


$ 5,939,248



Housing Development/Supportive Housing.

$ 1,739,254


Section 108 Trestle Glen Loan Payment

$ 343,769


Community Housing Development Organization (CHDO) Set-Aside

$ 360,280


SMC Housing Rehab Revolving Loan Program

$ 400,000


Non Profit Small Rehab Programs

$ 280,877


Public Services

$ 540,561


Fair Housing

$ 39,323


Public Facilities/Micro-Enterprise. Asst.

$ 350,000


SMC START FTHB Revolving Loan Program

$ 400,000


American Dreamhome Downpayment Initiative (ADDI)

$ 12,359


Section 108 Gateway 101 Loan Repayment

$ 587,000


Program Management

$ 885,825



$ 5,939,248


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 26, 2009, after two prior HCDC Subcommittee public hearings, 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 an attempt to respond more readily to housing production needs, $1.6 million of the Housing Development CDBG and HOME portion has 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 May 1, 2009. In addition, $400,000 was added to the SMC Housing Rehab Revolving Loan Program, and the SMC START Revolving Loan Program which originally did not have any CDBG funds. Another $343,769 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, is limited under CDBG Program rules to 15% of the annual CDBG Grant.this year comprising approximately 9% ($540,561) of the budget. 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. Given the state of the economy and the rising need, there was an increase in applicants this year, and 13 of the 20 applicants were recommended for funding.


The HCDC has established a working goal of recommending a minimum allocation 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.


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 as well.


County Counsel Review
County Counsel has reviewed and approved the Resolution.


Fiscal Impact
The Annual Action Plan projects are included in the Department of Housing Budget for FY 2009-10. There is no net County Cost.