COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Housing

DATE:

April 14, 2010

BOARD MEETING DATE:

April 27, 2010

SPECIAL NOTICE/HEARING:

10 Day Publication, Public Hearing

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Duane Bay, Department of Housing Director

SUBJECT:

Approval of the FY 2010-2011 Annual Action Plan for the use of Federal Funds

RECOMMENDATION:

Adopt a Resolution:

1.

Approving the FY 2010-2011 Annual Action Plan for the use of Federal Funds provided under three entitlement programs: Community Development Block Grant (CDBG), Emergency Shelter Grant (ESG), and HOME Investment Partnerships (HOME): and the Director of the Department of Housing to submit the Annual Action Plan and required certifications to the U.S. Department of Housing and Urban Development (HUD); and

2.

Authorizing the Director of the Department of Housing or the Director’s designee to execute contract amendments that modify the contract term and/or services so long as the modified term or services do not exceed the total annual HUD funding allocations.

Background

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). With regard to 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 at the Application Study Session. The HCDC then presides over a public hearing with the funding applicants. The 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.

Discussion

Throughout the years HUD funding to the County has been diminishing gradually even though project costs and needs continues to rise. For FY 2010-2011 CDBG funding is not expected to decrease from the previous year’s allocation. Similarly, ESG funding has generally stayed constant within the last 7 years, and will do so for FY 2010-11, at about $125,000.

However, HOME funds will decrease. By way of comparison, seven 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 fiscal year 2010-11 the County will receive approximately $1.8 million. While this may seem to be a minimal deduction, housing development costs such as land, construction, and financing continue to rise in the current weakened economy, so the funding received does not go as far as in years past.

Approval of the FY 2010-2011 Annual Action Plan contributes to the Shared Vision 2025 outcome of a livable community by addressing health and safety hazards including, but not limited to, improving handicap accessibility, addressing housing code deficiencies and rehabilitating existing housing stock in San Mateo County.

Program Budget
The total FY 2010-2011 Action Plan budget, including repayment and reprogrammed funds, is approximately $6.4 million. The table below summarizes HUD funding under CDBG, HOME and ESG.

TOTAL SOURCES

CDBG Grant

$ 3,070,424

HOME Grant

$ 1,806,777

ESG Grant

$ 124,645

CDBG Reprogrammed

$ 639,475

HOME Reprogrammed

$ 425,460

CDBG Program Income (Loan Repayments)

$ 339,478

HOME Program Income (Loan Repayments)

$ 38,555

TOTAL SOURCES

$ 6,444,814

TOTAL USES

Housing Development – CDBG

$ 796,531

12.4%

Housing Development – HOME

$ 787,040

12.2%

Section 108 Trestle Glen Loan Payment

$ 343,769

5.3%

Section 108 Gateway EPA Loan Payment

$ 17,000

0.3%

Community Housing Development (CHDO)

$ 244,110

3.8%

Non-Profit Minor Home Rehab Programs

$ 381,500

5.9%

Public Services/Emergency Shelter

$ 542,602

8.4%

Fair Housing

$ 40,000

0.6%

Micro-Enterprise/Economic Development

$ 24,000

0.4%

Public Facilities Rehabilitation

$ 16,000

0.2%

PAHALI – Preserving Affordable Housing

$ 160,000

2.5%

Half Moon Bay Campus Project

$ 300,000

4.7%

County Housing Rehab Program

$ 350,000

5.4%

HOME allocation to reserves

$181,250

2.8%

CHDO allocation to reserves

$272,058

4.2%

CDBG allocation to reserves

$ 600,239

9.3%

Project Delivery Costs

$ 487,720

7.6%

Program Management

$ 900,995

14.0%

TOTAL USES

$ 6,444,814

100%

Funding Recommendations

As noted earlier, the public participation process involves staff making preliminary recommendations to the HCDC, which in turn, they may either reaffirm or modify the recommendation for Board consideration. On March 18, 2010, after the HCDC held and closed the public hearing, the HCDC convened to review and ratify the funding recommendations for Board of Supervisors’ approval. Attachment A shows the proposed Action Plan, highlighted below.

The Department of Housing 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 that 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 2010-11. There is no Net County Cost.