HomeMy WebLinkAbout1998-05-11 City Council (12)City
City of Palo Alto
Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
8
DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:MAY 11, 1998 CMR:228:98
SUBJECT:¯ PUBLIC HEARING: FISCAL YEAR 1998/99 COMMUNITY
DEVELOPMENT BLOCK . GRANT (CDBG) FUNDING
ALLOCATIONS AND ANNUAL ACTION PLAN UPDATE OF THE
CONSOLIDATED PLAN FOR THE PERIOD 1995 - 2000
RECOMMENDATION
Staff recommends that the City Council:
Adopt the attached Resolution and the Annual Action Plan establishing funding
allocations and a funding contingency plan for the 1998/99 CDBG Program.
Authorize and direct staffto carry out any further required environmental assessments
and certifications for each project under both the California Environmental Quality
Act (CEQA) and the National Environmental Policy Act (NEPA), prior to the
commitment of any funds for each project.
Authorize and direct the City Manager, or her designee, to execute and submit the
1998/99 CDBG application and other documentation necessary to file the application
with HUD, and to otherwise bind the City with respect to the application.
PROJECT DESCRIPTION
The purpose of the May 11, 1998 public heating is for the City Council to review and act on
the recommendations of the Finance Committee regarding the Fiscal Year 1998/99
Community Development Block Grant (CDBG) funding allocations. The required 30-day
public review period for the 1998/99 Annual Action Plan began on April 1, 1998 and ended
on April 30, 1998. The attached staff report (CMR:187:98) provides background
information on the 1998/99 CDBG process, the funding proposals, and the staffand Citizens
Advisory Committee (CAC) funding recommendations.
CMR:228:98 Page 1 of 2
FINANCE COMMITTEE REVIEW AND RECOMMENDATIONS
Following public testimony at the April 7, 1998 Finance Committee meeting, the Committee
reviewed and discussed the various proposals. The Finance Committee voted to recommend
to Council the approval of the staff recommendations reflected in CMR:187:98.
ATTACHMENTS
Resolution
CMR: 187:98
1998/99 Annual Action Plan
PREPARED BY: Suzanne Bayley
DEPARTMENT HEAD REVIEW:
ANNE CRONIN MOORE
Imerim Director of Planning and
Community Environment
CITY MANAGER APPROVAL:
JU~LEMING e ./’~ °d
City Manager
Citizen Advisory Committee
Applicant Agencies
CMR:228:98 Page 2 of 2
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
APPROVING THE USE OF COMMUNITY DEVELOPMENT BLOCK
GRANT FUNDS FOR FISCAL YEAR 1998-.1999
WHEREAS, on May i, 1995, the Palo Alto City Council
approved and adopted a document entitled "Consolidated Plan", which
identified and established the Palo Alto housing and non-housing
community development needs, objectives, and priorities for the
period of July i, 1995 to June 30, 2000; and
WHEREAS, the 1998-99 Action Plan, the annual update to the
Consolidated Plan, was subjected to public review and commentary
during the period of April i, 1998 through April 30, 1998; and
WHEREAS, the potential uses of Community Development Block
Grant ("CDBG") funds were evaluated in light of the needs and
objectives identified in the Consolidated Plan and reflected in the
recommendations and comments of the Citizens Advisory Committee and
other interested citizens; and
WHEREAS, under the CDBG program, the highest priority is
given to activities which will benefit persons with low and
moderate incomes; and
WHEREAS, the City Council and the Finance Committee of the
City Council have held ~publicly noticed public hearings on the
proposed uses of the CDBG funds for fiscal year 1998-99; and
WHEREAS, the fiscal year 1998-99 CDBG funds allocated to
the City are proposed to implement the following programs;
NOW, THEREFORE, the Council of the City of Palo Alto does
RESOLVE as follows:
SECTION i. The uses of CDBG funds for fiscal year 1998-99
are hereby approved and authorized for the following, programs:
Catholic Charities of Santa Clara County.
Long Term Care Ombudsman Program.
Complaint investigation and advocacy
services to Palo Alto’s elderly residents
living in nursing and residential care
facilities. City-wide.$ I0,000
Emergency Housing Consortium. EHC
provides temporary shelter and supportive
services for homeless individuals and
families. County-wide.8,000
980429 ~n 0071409
1
Palo Alto Housing Corporation. Project
is to provide information and referral
services for affordable housing options., and
a supportive counseling program for the
Barker Hotel tenants. City-wide.
Urban Ministry of Palo Alto Provision
of basic support services to homeless
individuals including the provision of
emergency food and a rotating church
shelter program. City-wide.
32,000
62,000
Outreach and Escort, Inc. Transportation
subsidies for eligible low income disabled
Palo Alto residents registered through the
County of Santa Clara’s Special Needs
Transportation program. City-wide.5,450
o
Mid-Peninsula Citizens for Fair Housing.
MCFH provides services to promote fair
housing, including complaint investigation,
counseling, advocacy and education.
City-wide.
City of Palo Alto. Department of Planning
and Community Environment. Overall CDBG
grant administration and capital improve-
ment project delivery costs associated
with federal funding. City-wide.
16,600
Palo Alto Housing Corporation. Acquisition
and rehabilitation of 57-unit Sheridan Apts.
at 360 Sheridan Ave., Palo Alto. The
Property has been subsidized under a
Section 8 rental assistance contract and
the majority of tenants are very-low
income, elderly and/or disabled. The
purchase will preserve the low-income
housing stock.
130,000
....513,950
TOTAL:~ ~$ 778,000
SECTION. 2. The total amount set forth under Section i of
this resolution hereby represents the proposed allocation ~of
$733,000 in CDBG funds, from the United States Department of
Housing and Urban Development ("HUD") for fiscal year 1998-99, and
$45,000 in anticipated program income for fiscal year 1998-99.
SECTION 3 The City Manager is hereby authorized to expend
the money in the $i0,.000 CDBG emergency contingency account,
created under Resolution No. 6897, on an emergency basis in her
discretion for existing or additional CDBG-eligible programs or
projects. The City Manager is further directed to report to the
City Council following the occurrence of any such expenditures.
980429 syn 0071409
SECTION 4. The City staff is hereby authorized to submit
the 1998-99 annual Action Plan update and appropriate application
forms to HUD for the fiscal year 1998-99 CDBG funds, and such money
shall be spent as set forth in this resolution. The Mayor, City
Manager and any other designated City staff or officials are
hereby authorized to execute such application forms and any other
necessary documents to secure these funds.
SECTION 5. The City Council hereby finds that the fiscal
year 1998-98 CDBG program authorized under Section 1 of this
resolution is not a project under the California Environmental
Quality Act ("CEQA"). However, the Council further authorizes and
directs City staff to conduct any further environmental review, and
prepare any additional environmental assessments and certificates
that may be required, under CEQA and the National Environmental
Policy Act (NEPA) for each project under the fiscal year 1998-99
CDBG program prior to the release of funds for any such project.
INTRODUCED AND PASSED :
AYES :
NOES :
ABSTENTIONS :
ABSENT:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED AS TO CONTENT:
Mayor
City Manager
Interim Director-of Planning
and Community Environment
CDBG Coordinator Director of
Administrative Services
980429 Wn 0071409
City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:APRIL 6, 1998 CMR:187:98
SUBJECT:PROPOSED FISCAL YEAR 1998/99 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
ALLOCATIONS AND DRAFT ANNUAL ACTION PLAN
UPDATE OF THE CONSOLIDATED PLAN FOR THE PERIOD
1995 - 2000
RECOMMENDATION
Staffrecommends that the Finance Committee recommend to the City Council approval of
the following:
The funding allocations, as recommended by staff in Attachments A and B be
included in the final 1998/99 Community Development Block Grant (CDBG) Action
Plan.
o Staffbe authorized to submit to the Department of Housing and Urban Development
(HUD), by the May 15, 1998 deadline, the Action Plan-for the expenditure of
1998/99 CDBG program funds.
The City Manager, on behalf.f the City, be authorized to execute the 1998/99 HUD
application and Action Plan for CDBG funds, and any other necessary documents
concerning the application, and to otherwise bind the City with respect to the
application.
BACKGROUND
The City of Pal. Alt0 receives funds annually from HUD as an entitlement City under the
CDBG Program, authorized by Title I of the Housing and Community Development Act of
1974, as amended. The primary objective of the Act is "the development of viable urban
CMR:187:98 Page 1 of 7
communities by providing decent housing and a suitable living environment, and expanding
economic opportunities, pri~ncipally for persons of low and moderate income."
On December 13, 1993, the City Council adopted a Citizen Participation Plan which provides
for a nine-member CDBG Citizens Advisory Committee (CAC), to be selected by the Mayor.
To provide for coordination between the Human Sergice Resource Allocation Process
(HSRAP), and the CDBG funding allocation process, a member of the Human Relations
Commission (HRC) occupies one of the CAC slots.
This year’s Committee included: Greg Avis, Karl Garcia, Jonathan Glendinning, Lou
Kavanaugh, Adele Khabbaz (HRC Liaison), Doan Lawrence, Trina Lovercheck, Michael
Midolo, and Margaret Toor. Margaret Toor resigned in mid-January due to scheduling
conflicts. Mike Midolo was selected as the Committee spokesperson.
Applications for 1998/99 funding were mailed to an extended list of area housing and human
service providers on November 1, 1997. A notice announcing the availability of applications
for 1998/99 funding was published in the Palo Alto Weekly on November 5, 1997, and
completed applications were due on December 19, 1997.
All funding applications were reviewed by staff for compliance with federal project
eligibility requirements. Additionally, all applications were evaluated based on the needs and
priorities identified in the adopted Consolidated Plan. The funding priorities used for fiscal
year 1998/99 are summarized on Attachment C. The CAC held public meetings on January
6, 15, 22, 29, and February 10, 1998. Staff and the CAC reviewed and discussed the funding
requests, and interviewed some of the applicant agencies.
HUD regulations require that all activities must meet one of the three national objectives of
the CDBG Program:
1)Activities which are of benefit to low and very low income persons (for HUD
. purposes, defined as 60 percent and 50 percent of Santa Clara County median income,
or $46,000 and $38,000 respectively, for a family of four);
2)Activities which aid in the prevention or elimination of slums or blight; or
3)Activities which meet other community development needs having a particular
urgency or posing a serious and immediate threat to the health or welfare of the
community.
Palo Alto has historically expended all of its CDBG funds on projects which benefit low and
very low income persons.
CMR: 187:98 Page 2 of 7
The three CDBG program activities are:
Housing/Community Development - Capital Irnprovements
The primary focus of the CDBG program is on capital projects or development
activities such as new housing, land acquisition, relocation, architectural barrier
removal, site clearance, housing rehabilitation~ historic preservation, economic
development, or similar activities. There are no funding limitations in this category.
Public Services
Social service activities such as homelessness prevention, child care, senior services,
etc. may be funded under this category. Public service funding is limited to a
maximum of 15 percent of the annual grant and program income. The maximum
funding in this category for fiscal year 1998/99 is $117,450, or a decrease of 11
percent from 1997/98.
Program Administration
The contract for fair housing services and City staff time spent on overall CDBG
program administration, affordable housing development, and various planning
studies are eligible for reimbursement under this category. Funding for 1998/99 is
limited to $155,600, or 20 percent of the grant and program income.
In accordance with HUD regulations, the dratt Annual Action Plan (Attachment D) will be
available for a 30-day public review and comment period, beginning April 1, 1998. An ad
was published in the Palo Alto Weekly on March 27, 1998 to inform interested members of
the public about its availability. Notices were also mailed to all the applicant agencies, and
other interested parties.
DISCUSSION
Attachment A is a chart showing the applications received and the CAC and staff funding
recommendations. Attachment B is a narrative explaining the proposals and the funding
recommendations in more detail.
The CAC recommendations represent a majority vote of five in favor, one opposed, and one
abstention. The staff recommendations differ-from the CAC recommendations because
information was received subsequent to the last CAC meeting regarding the Human Resource
Allocation Process (HSRAP) funding recommendations. The staff recommendation was
changed in order to eliminate duplicate contracts and funding for similar services through the
two processes. These issues are further addressed below.
Clara Mateo Shelter
The Clara Mateo Alliance was established in July 1997 to provide shelter and services for
homeless persons on the grounds of the Veterans Administration facility in Menlo Park.
CMR: 187:98 Page 3 of 7
Since the HSRAP recommendations will include a contract for casework management of
Palo Alto residents at the Salvation Army’s Clara Mateo Shelter, the staff CDBG funding
allocations were changed. The $8,000 in funding which had been recommended for
casework management services at Clara Mateo Shelter was shifted to some of the other
public service agencies.
The Sheridan Apartment Acquisition:
Staff and the CAC recommend that the maximum amount of 1998/99 CDBG funding under
the "Housing/Community Development - Capital Improvements" category be reserved for
the proposed acquisition of the Sheridan Apartment complex by the Palo Alto Housing
Corporation. Due to the large amount of City subsidy which will be required to acquire and
rehabilitate this project, none of the other applications for capital projects were recommended
for funding this year. The priority for creating and retaining affordable housing remains the
highest funding priority for the use of CDBG funds.
ALTERNATIVES TO STAFF RECOMMENDATION
The Council could revise three specific funding areas:
1)The CAC recommendations reflect a lengthy discussion regarding the amount of
funding for the Palo Alto Housing Corporation (PAHC) public service application.
The application is for information and referral services for housing seekers and
counseling for low income tenants at the Barker Hotel. A majority of the CAC
members felt strongly that PAHC should receive funding at the lower amount to
encourage additional fund-raising efforts, and decrease reliance on City funding. City
staff recommended a higher allocation given the escalating rents issue, and the demise
of the Peninsula Area Information and Referral Service (PAAIRS) information and
referral service.
2)
3)
In light of the CDBG funding reductions this year, and because it is anticipated that
the Sheridan acquisition will require a large subsidy of City funds, the request for City
administrative funds was decreased from the current level of $180,000 to $130,000.
The staff and CAC recommendations support this reduction. In order to accomplish
this reduction, the General Fund will be required to pick up the difference between
actual program expenses and the amount of the CDBG reimbursement.
Staff and the CAC did not recommend funding for any of the other community
development or housing capital projects due to the large subsidy of City funds which
will be required to accomplish the purchase and rehabilitation of the Sheridan
Apartments. Although many of the projects were felt to have merit, the applications
were not explored in depth, and the sponsor agencies were not interviewed. The
opportunity to preserve units in the City’s existing affordable housing stock
outweighed all other funding considerations this year.
CMR: 187:98 Page 4 of 7
RESOURCE IMPACT
The 1998/99 CDBG entitlement allocation is $733,000. This amount represents a six percent
decrease from the $782,000 available in 1997/98. A decrease in the estimated program
income further reduces the amount which can be funded under the public service and
administration categories. The maximum available for ~llocation under the public service
category in fiscal year 1998 is 11 percent less than in fiscal year 1997.
Program income is defined as income generated directly from the use of CDBG funds. The
main source of program income is from loan payoffs from the City’s Housing Improvement
Program (HIP) single family rehabilitation program. Since the HIP Program is no longer
operational and new loans are not being generated, the income stream from loan payments
and pay-offs continues to decrease. The HIP loan portfolio is currently valued at
approximately $170,000. The other anticipated source of revenue is from the PAHC when
rental income exceeds expenses on properties acquired or rehabilitated with CDBG funds.
The total available 1998/99 funds are as follows:
FY 1998/99 CDBG Allocation
1998/99 Estimated Program Income
Housing Improvement Program (HIP)
Palo Alto Housing Corp. (PAHC)
25,000
20,000
$733,000
45.000
$778,000
The cap in the public service category is based on estimated 1997/98 program income of
$50,000 and the 1998/99 grant ($733,000 ÷ $50,000 = $783,000 x 15% = $117,450). The
cap in the administration category is based on estimated 1998/99 program income of $45,000
and the 1998/99 grant ($733,000 + $45,000 = $778,000 x 15% = $155,600).
It has been the City’s policy to provide an annual Consumer Price Index (CPI) adjustment
to the public service agencies funded through the General Fund Human Resource Allocation
Process (HSRAP).. For 1998/99, the CPI adjustment will equal 4.2 percent. In general, the
CDBG process has utilized the ~ame index. However, due to the reduction of federal funds,
the agencies applying through the CDBG funds process this year were subject to cuts ranging
from seven to 27 percent.
In light of the reduction in overall funding, the City of Palo Alto request for CDBG
reimbursement for program administrative costs was decreased by 17 percent, from $180,000
in 1997/98 to $130,000 in 1998/99. The difference between the actual cost to administer the
program and the amount of the CDBG reimbursement will be borne by the General Fund.
Unfortunately, these funds can not be used to increase public service allocations due to the
cap imposed on CDBG funding.
CMR: 187:98 Page 5 of 7
POLICY IMPLICATIONS
The CDBG Program requires that funds be expended from the Letter of Credit in a timely
manner. HUD regulations stipulate that no more than one and a half times ajurisdiction’s
entitlement grant amount should remain in the Letter of Credit 60 days prior to the close of
the program year. Palo Alto has traditionally had a difficult time meeting this goal, and is
currently out of compliance. The City’s Letter of Credit has a current balance of
$1,923,990, .while the 1.5 standard would put the maximum amount unexpended at
$1,099,500 (1.5 x $733,000).
Allocating 1998/99 CDBG funding to the Sheridan project will increase the City’s non-
compliance with this measure. Due to the high cost of land and property in this area, a few
year’s worth of funds must oRen be accumulated in order to accomplish the development or
preservation of an affordable housing project. The CDBG Housing Development Account
has an unexpended balance of $1,014,749, which has been reserved for the Sheridan project.
The addition of 1998/99 funding of $513,950 will increase that balance to $1,528,699.
It is not certain when the CDBG funds might be expended for the Sheridan Project. The
PAHC is preparing an application for tax credits which would be awarded in July 1998. If
they are not awarded an allocation at that time, the next funding round will not likely be
available until the spring of 1999. As a policy issue, the Council should be aware that non-
expenditure of housing development funds will put the City further out of compliance with
~ regulations.
TIMELINE
Funding recommendations made by the Finance Committee and the drat~ Action Plan will
be forwarded to the City Council for review and approval at a public hearing on May 11,
1998. The Action Plan, containing the CDBG application, 1998/99 funding allocations, and
requisite certifications, will be submitted to HUD by the May 15, 1998 deadline.
ENVIRONMENTAL REVIEW
For purposes of the California Environmental Quality Act (CEQA), budgeting is not a
project. Under the project descriptions section in Attachment B, the environmental
assessment under CEQA has been identified. HuD environmental regulations for the CDBG
Program are contained in 24 CFR 58 "Environmental Review Procedures for Title I
Community Development Block Grant programs." The regulations require that entitlement
jurisdictions assume the responsibility for environmental review and decision making under
the National Environmental Policy Act (NEPA). Prior to the commitment or release of funds
for each of the proposed projects, staffwill carry out the required environmental reviews or
assessments, and certify that the review procedures under CEQA, and HUD and NEPA
regulations have been satisfied for each particular project.
CMR: 187:98 Page 6 of 7
ATTACHMENTS
Attachment A:
Attachment B:
Attachment C:
Attachment D:
Chart of 1998/99 funding applications and recommendations
Narrative report containing staff and CAC funding recommendations
Funding Priorities
Draft Annual Action Plan Update .Of the Consolidated Plan for the
Period 1995 - 2000.
PREPARED BY: Suzanne Bayley, CDBG Coordinator
DEPARTMENT HEAD:
ANNE CRONIN MOORE
Interim Director of Planning Community Environment
CITY MANAGER APPROVAL:
Manager
CC:CDBG Citizen’s Advisory Committee Members
Applicant Agencies
CMR:187:98 Page 7 of 7
ATTACHMENT B
STAFF AND CITIZEN ADVISORY COMMITTEE (CAC)
FUNDING RECOMMENDATIONS
FOR 1998/99 CDBG
PUBLIC SERVICE APPLICATIONS
Agency: Catholic Charities
2625 Zanker Rd. Suite 200, San Jose, CA 95134-2107
Program: Long-Term Care Ombudsman Program. Agency provides confidential
advocacy and complaint investigation services to the frail, chronically ill, primarily
elderly residents in Palo Alto’s licensed Skilled Nursing and Residential Care Facilities.
Agency staff and trained community volunteer ombudsmen visit residents in local
facilities on a regular basis and as special circumstances dictate (i.e. in response to
specific complaints). On behalf of these residents, the Program investigates
complaints, including allegations of abuse and neglect, seeks fair resolution to
problems, and promotes the residents’ right to quality of care and quality of life in the
long term care setting.
Funding:
1998/99 Request:
1997/98 Funding:
Staff and CAC Recommendation:
$13,800
$13,400
$10,o00
Discussion: Current contract objectives are being met or exceeded. Services provided
by the Ombudsman Program are not duplicated by any other agency, and proyide an
important presence in local long term care facilities. Agency anticipates serving 450
unduplicated long term care Palo Alto residents in 1998/99. The number of contract
service units may be reduced commensurate with the reduced funding. It is hoped that
the $3,400 funding reduction can be absorbed by an organization the size of Catholic
Charities with an overall budget for 1998/99 in excess of $9.6 million. The staff and
CAC recommendations represent a 25 percent reduction in funding from the current
level.
Environmental: Not a Project under the California Environmental Quality Act
(CEQA).
1
Agency: Emergency Housing Consortium (EHC)
2011 Little Orchard Street, San Jose, CA 95125.
Program: Shelter and Services for Homeless Person~. Agency provides emergency
shelter and comprehensive supportive services to homeless men, women, families with
children, and youth in various facilities in Santa Clara County. EHC operates the Santa
Clara Family Living Center, a Youth Shelter in San Jose, the winter shelters at the
National Guard Armories in Sunnyvale and Gilroy, the Regional Reception Center in
San Jose and various other transitional housing programs in the San Jose area.
Supportive services include prepared meals, counseling, child care, transportation, case
management, and skills workshops, to help secure housing and/or employment
Funding:
1998/99 Request:
1997/98 Funding:
Staff and CAC Recommendation:
$11,200
$11,000
$ 8,000
Discussion: Current contract objectives are being met or exceeded. This agency
provides the majority of the homeless shelter services in Santa Clara County, including
the Sunnyvale Armory, and is an important resource for persons from the Palo Alto
area. Again, it is hoped that the funding $3,200 funding reduction can be absorbed by
the agency this year in light of their overall proposed budget of $5.7 million. The staff
and CAC recommendations represent a 27 percent reduction from the current level of
funding.
Environmental: Not a Project under CEQA.
2
Agency: Palo Alto Housing Corporation (PAHC)
725 Alma Street, Palo Alto, CA 94301
Programs: Affordable Housing Information and Referral Services and Barker
Hotel Tenant Counseling Program. PAHC provides information and referral services
to seekers of affordable housing in the Palo Alto and surrounding areas. This service
assists mostly lower income persons in their search to identify available affordable
housing opportunities, counsel on eligible subsidy programs, and advice on other
housing related issues. PAHC produces and distributes a comprehensive directory
which identifies waiting lists and resources in the area. The very low income tenants of
the Single Room Occupancy (SRO) Barker Hotel are provided with counseling and
supportive services as needed in order to maintain or stabilize their housing situation.
Many of the tenants are formerly homeless and may have mental, and or drug and/or
alcohol related disabilities which require intervention.
Funding:
1998/99 Request:
1997/98 Funding:
Staff Recommendation:
CAC Recommendation:
$42,135
$35,000
$32,000
$27,150
Discussion: Current contract objectives are being met or exceeded. In their
deliberations, the CAC discussed the need for PAHC to broaden their support base for
public service activities so as to not rely too heavily on City funding. The CAC
recommends that PAHC increase its fund-raising efforts to provide additional funding
for the support services it is providing. The CAC proposes a 22 percent reduction
from the current funding level.
Staff believes that the information and referral program provided by PAHC is a vital
¯ ingredient in the array of housing services for lower income residents..The issue of
escalating rents, the rental housing crisis, and the loss of the local PAAIRS information
and referral service created an even greater demand for PAHC’s housing information
services this year. The counseling program at the Barker is a critical component in
retaining housing stability for the tenants, and in providing the appropriate from a
property management standpoint for a very needy population. Staff recommends
funding at a 9 percent reduction from the current funding level.
Environmental: Not a project under CEQA.
3
Agency: Urban Ministry of Palo Alto (UMPA)
P. O. Box 213, Palo Alto, CA 94302
Program: Shelter and Supportive Services for the Homeless. This agency provides
shelter, emergency assistance and supportive services t.o. the local homeless and very
low income population. Services subsidized by CDBG funding include staffing of the
Drop-in Center; administration of the rotating church shelter program, the food closet,
and prepared hot meal programs. Services at the drop-in center include distribution of
mail and messages, bus passes, personal hygiene items, counseling, and referral to
needed services.
Funding:
1998/99 Request:
1997/98 funding:
CAC Recommendation:
Staff Recommendation:
$75,000
$66,900
$59,00O
$62,000
Discussion: Current contract objectives are being met in the Drop-in Center and
Prepared Meal/Emergency Food Programs. However, the number of bed nights
provided by the Rotating Church Shelter Programs is 15 percent below the targeted
number. Although the shelter has a 15 bed capacity, there are nights when the census
has been as low as six persons. This is surprising given the rainy weather and the
capacity crowds at other area shelters. UMPA has begun an analysis of the decline in
the Hotel De Zink shelter clientele, and will report on the results.
While working diligently to maintain the progress made in the administrative and
financial systems of the organization, UMPA continues to suffer from staff’mg turnover.
This turnover undermines program continuity and accountability. The CAC
recommends funding at a level which is 12 percent below the current level of funding.
The staff recommendation is for a 7 percent reduction.
Environmental: Not a project under CEQA.
4
Agency: Outreach And Escort, Inc.
97 East Brokaw Road, Suite 140, San Jose, CA 95112
Project: Special Needs Transportation. This proposal requests funding to provide
fare box subsidies for low income disabled Palo Alto residents registered through the
County’s Special Needs Transportation program. Out~each and Escort provides door to
door para-transit services for eligible low income, disabled individuals unable to
independently access public fixed route (bus) transportation. In accordance with
transportation changes mandated by the Americans with Disabilities Act (ADA), the
Santa Clara County Transit District (SCCTD) contracts with Outreach and Escort to
provide services County-wide. Clients are referred through local social service
agencies.
Funding:
1998/99 Request:
1997/98 Funding:
CAC Recommendation:
Staff Recommendation:
$6,000
$6,000
$5,300
$5,450
Discussion: Current contract objectives are being met or exceeded. This service is not
duplicated by any other agency. The subsidies provide needed transportation services
to very low income, disabled persons who cannot afford the standard $2.20 para-transit
fares. The CAC recommends funding at a level which is 11 percent lower than the
current year. The staff recommendation is for a decrease equal to 9 percent from the
1997/98 fiscal year.
Environmental: Not a project under CEQA.
Agency: Salvation Army/Clara Mateo Alliance
795 willow Road, Bldg. 323-D, Menlo Park, CA 94025
Program: Shelter and Supportive Services for Homeless Persons. The Clara Marco
Alliance is a regional collaborative which was established in July 1997 to provide
shelter and services for homeless persons on the grounds of the Veterans
Administration facility in Menlo Park. The Clara Marco Alliance contracts with the
Salvation Army to administer the shelter program. Clara-Mateo Alliance is proposing
to expand the current 40-bed shelter to a 64-bed year round shelter. Additionally, they
plan to add case management services for individuals and families who are not linked
with a treatment provider. Both emergency and transitional beds are available.
Funding:
1998/99 Request:
1997/98 Funding:
Staff Recommendation:
CAC Recommendation:
$10,000
-0-
-0-
$ 8,000
Discussion: This program is an important addition to the stock of emergency and
transitional beds in Santa Clara and San Mateo Counties. The facility serves the
homeless sub-populations with some of the greatest needs such as chronic substance
abusers, veterans and the seriously mentally ill. The shelter serves the north County
area which has fewer beds available than the southern portion of Santa Clara County.
In the current year, $25,000 was provided by the City of Palo Alto for shelter start-up
costs from a special contribution revenue fund. A service contract was not signed since
the money provided was not from the General Fund. This year, Clara Mateo applied
for funding through both the CDBG and HSRAP processes. It has been decided that
the HSRAP recommendation will include an allocation of funding for the shelter from
General Funds, and will require a contract with specific case management goals and
objectives. Since the CDBG and HSRAP processes attempt to avoid duplication of
contracts for administrative simplicity, the staff recommendation for funding from
CDBG was withdrawn. The CAC recommend~ation is to fund the case management
services for homeless-persons from the Palo Alto area.
Environmental: Not a project under CEQA
6
Agency: Senior Adults Legal Assistance (SALA)
160 E. Virginia St., Suite 260, San Jose, CA 95112
Program: Legal Assistance to Palo Alto Seniors. SALA proposes to expand their
current program of free legal services to low income Palo Alto seniors by increasing
the number of monthly appointments available at the P~lo Alto Senior Center. The
agency provides direct legal services in the form of advice/referrals, consultations/brief
service, and attorney representation in areas such as public benefits (Social Security,
SSI, Medicare, Medi-Cal), nursing homes and alternatives, housing, consumer, elder
abuse, and simple wills. Additionally, they provide community educational
presentations which emphasize the same areas of law and provide expanded information
about legal planning. SALA indicates that the waiting period for an appointment at the
SCC for Palo Alto seniors now exceeds two months.
Funding:
1998/99 Request:$8,000
1997/98 Funding -0-
Staff and CAC Recommendation:-0-
Discussion: Staff and the CAC do not recommend funding for this project. Although
the agency provides a very worthwhile service to seniors in the community, staff and
the CAC defer to the Senior Coordinating Council (SCC) for the prioritization of need
in the senior community. SALA did not present information which indicated that they
have collaborated with the SCC on the level of service needed, or that they have the
support of the SCC for an expansion of operations.
Environmental: Not a project under CEQA.
7
ADMINISTRATION
Agency: Mid-Peninsula Citizens for Fair Housing MCFH)
457 Kingsley Avenue, Palo Alto, CA 94301
Project: Fair Housing Services. Agency provides investigation, counseling and legal
referral for victims of housing discrimination as well as community outreach and
education regarding housing rights. MCFH serves the mid-peninsula area from
Redwood City through Cupertino/Sunnyvale and Fremont. MCFH seeks to reduce
discrimination in housing and provide redress for those who have been discriminated
against. HUD regulations require CDBG entitlement jurisdictions to affirmatively
further fair housing choice.
Funding:
1998/99 Request:
1997/98 Funding:
Staff and CAC Recommendation:
$21,500
$17,500
$16,600
Discussion: Current contract objectives are being met or exceeded. $1,000 of the
proposed funding will be .reserved for a special community educational program on
issues dealing with fair housing and persons with disabilities. The County of Santa
Clara Housing and Community Development staff will be conducting a county-wide
analysis of fair housing issues and services in the next fiscal year. One of the purposes
of the analysis will be to examine appropriate service and funding levels, and to
evaluate the degree to which issues of discrimination are being addressed by service
providers. It is expected that MCFH will participate in the survey and provide
information for the. analysis. Staff and CAC recommendations represent a five percent
decrease from 1997/98 funding levels.
¯ Environmental: Not a project under CEQA.
8
Agency: City of Palo Alto - Department of Planning and Community Environment
250 Hamilton Avenue, Palo Alto, CA 94301
Project: CDBG Program Administration. Funding is requested for administrative
management of the CDBG program, planning studies, and for project delivery costs
which relate to the capital projects. Staff time spent on capital projects is not included
under the 20 percent administrative cap. Administrative costs are associated with the
overall management, coordination, monitoring and evaluation of the CDBG Program,
oversight of public service contracts, as well as activities such as data gathering,
studies, analysis, plan preparation, and the identification of actions for implementation
of plans.
Funding:
1998/99 Request:
1997/98 Funding:
Staff and CAC Recommendation:.
$130,000
$180,000
$130,000
Discussion: Due to the reduction in the amount of the entitlement grant this year, and
the subsequent need to make cuts in the public service programs, staff has reduced the
request for CDBG reimbursement for direct program costs. The amount requested
represents a 28% decrease in the funding provided in the 1997/98 year which had
remained virtually unchanged for the last six years. Money from the General Fund will
be used to cover the shortfall between the CDBG reimbursement and actual expenses.
Staff and the CAC recommend funding at the requested reduced level.
Environmental: Not a project under CEQA.
9
COMMUNITY DEVELOPMENT/HOUSING .CAPITAL PROJECTS
Agency: Palo Alto Housing Corporation, 725 Alma Street, Palo Alto, CA 94301
Project: Acquisition and Rehabilitation of the 57-Unit Sheridan Apartments
Located at 360 Sheridan Avenue. This proposal is to acquire and rehabilitate the
existing apartment complex. The apartments are one-bedroom, one-bath units of about
550 square feet. The project was built in 1979 by a private, for-profit investment
partnership and was designed for independent living by the elderly. The ,current
residents are single, elderly persons with very low incomes. A number of the residents
have disabilities.
The developers utilized an FHA-insured loan and received a 20-year commitment of
federal Section 8 rental assistance for all 57-units. The Section 8 contract expires in
April, 1999. On January 13, 1998 the owners signed a letter of intent to negotiate a
purchase contract with PAHC for a price of $5.1 million. On February 2, 1998 the
City Council approved a pre-acquisition funding agreement providing PAHC with a
$145,500 loan of prior CDBG funds for feasibility studies and financing applications.
PAHC intents to preserve the Sheridan in its existing use as Section 8 assisted housing
for very low-income seniors and persons with disabilities. PAHC is currently
evaluating several financing alternatives. The information being obtained from the
appraisal and property inspections is needed so that they can determine the best plan
and accurate cost estimates. Preliminary estimates, however, indicated that
approximately $2.6 million of the total purchase and rehabilitation costs would need to
be funded from City sources. The sources for the City’s funding are expected to be the
entire existing balance of the Residential Housing In-Lieu fund and the CDBG housing
development fund including an appropriation from the 1998/99 grant. The rest of the
funding would most likely come from low income housing tax credits and a refinanced
first mortgage.
PAHC plans to submit an application for the housing tax credits in May 1998, and the
funding decisions will be announced in late July 1998. If the allocation is granted, the
property could be acquired by the end of 1998. If the tax credits are not awarded,
PAHC could reapply in 1999.
Funding:
1998/99 Request:
Staff and CAC Recommendation:
$513,950
$513,950
10
Agency: Community Housing, Inc., dba Lytton Gardens I and II
656 University Avenue, Palo Alto, CA 94301
Project: Energy Feasibility Study. Community Housing, Inc. owns and manages
Lytton Gardens I and II, providing 318 subsidized inde.pendent and assisted living units
for low and very low income seniors. This proposal requests funding to perform an
energy efficiency study to develop a comprehensive capital program to reduce operating
costs and maintain affordability.
Funding:
1998/99 Request:$33,500
Staff and CAC Recommendation:-0-
Agency: The Charities Housing Development Corporation
195 E. San Fernando St., San Jose, CA 95112
Project : California/Mathilda Apartments - Charities Housing has developed and
currently manages more than 185 units of affordable housing in Santa Clara County.
This proposal is to develop a 23 unit complex that will house adults with developmental
disabilities. The site is a 0.84 acre parcel located on the northeast corner of Mathilda
Avenue and California Avenue in the City of Sunnyvale. It is near transportation, a
major, shopping center, and the HOPE facility in Sunnyvale. The project has been
awarded a HUD section 811 Capital Advance.
Funding:
1989/90 Request:
Staff and CAC Recommendation:
$100,000
-0-
Agency: Palo Alto Senior Housing Project dba Stevenson House.
455 E. Charleston Rd., Palo Alto, CA 94303
Project: Boiler Replacement. Stevenson House is a senior residential facility
providing 109 units of affordable housing for approximately 135 independently
functioning, older adults. The proposal is for-funds to purchase and install two new
boilers to provide reliable, efficient heat; conserve energy; and reduce operating costs.
Funding:
1998/99 Request:$45,000
Staff and CAC Recommendation:-0-
11
Agency: Veterans Workshop, Inc.
795 Willow Road, MS 116B6, Menlo Park, CA 94025
Project: Rehabilitation of Shared Transitional Housing for Veterans. Agency
request funding for interior and exterior rehabilitation of two existing shared housing
properties in Palo Alto. Repairs include painting, foundation repair, construction of
closets, kitchen and bathroom remodeling, construction of ramps, and plumbing and
roofing work. The properties are located at 442 Margarita Street and 325 Fernando
Street in Palo Alto. The two facilities house 12 formerly homeless, disabled veterans
Funding:
1998/99 Request:
Staff and CAC Recommendation:
$234,914
Agency: Alliance for Community Care
438 N. White Road, San Jose, CA 95127
Project: Repairs to Shared House at 650 Waverley Street in Palo Alto. Agency is
currently doing a feasibility study with 1997/98 CDBG funds to determine the extent of
rehabilitation and repairs necessary to make the property suitable for shared rental
housing. The property would be rehabilitated and rented to low income individuals
with psychiatric disabilities as shared housing. The existing structure is a two story
wood frame single family residence with eight bedrooms and three and one-half
bathrooms.
Funding:
1998/99 Request:
Staff and CAC Recommendation:
Unknown $
-0-
12
ATTACHMENT C
CITY OF PALO ALTO
sUMMARY OF CDBG FUNDING PRIORITIES
FISCAL YEAR 1998/99
*Note."Priorities are shown in order of importance.
AFFORDABLE HOUSING (Goal: 60% of Budget)
A. NEW CONSTRUCTION, CONVERSION & ADDITION OF NEW UNITS
o
Permanent housing for families with children
Other permanent housing including group homes, seniors, the disabled,
shared housing, etc.
Transitional housing with supportive services
Permanent housing for the homeless or at-risk of homelessness
B.PRESERVATION OF EXISTING, LOWER INCOME RENTAL HOUSING
Preservation of existing, federally subsidized multi-family housing owned
by profit motivated investors
Acquisition and/or rehabilitation of existing multi-family rental housing,
including improvements to common areas
Acquisition and/or rehabilitation of existing buildings for special needs
populations including shared housing and group homes
PUBLIC FACILITIES AND IMPROVEMENTS (Goal: 5% of Budget)
1.Rehabilitation of existing facilities for use as shelters for the homeless or
other special needs groups
IIl.PUBLIC SERVICES (Goal: 15% of Budget)
Services directly related to the housing needs of low income persons
Homeless shelter operating costs and the provision of auxiliary or related
services _
Services which address other needs of low income, elderly or special
needs persons
IV.ADMINISTRATION (Goal: 20% of Budget)
Fair housing education, information, referral, advocacy, counseling and
complaint resolution
CDBG program administration and planning costs
h:cmr/attc98.rev32698
ATTACHMENT D
CITY OF PALO ALTO
Housing and Community Development
DRAFT 1998/99 ACTION PLAN
Annual Update of the City’s Consolidated Plan for the Period
July 1, 1995 to June 30, 2000
Public Review Period: April 1, 1998 - April, 30, 1998
Prepared by Departmen~t-of Planning & Community Environment
250 Hamilton Avenue
Palo Alto, California 94301
Anne Cronin Moore, Interim Director
For Information, Contact: Suzanne Bayley
Planning Division, City of Palo Alto (650) 329-2428
CITY OF PALO ALTO
FISCAL YEAR. 1998/99 DRAFT ACTION PLAN"
ANNUAL UPDATE TO THE CITY’S CONSOLIDATED PLAN"
FOR THE PERIOD JULY 1, 1995 TO JUNE 30, 2000
This Action Plan is the 1998/99 annual update to the City’s Consolidated Plan for the Period July
1, 1995 to June 30, 2000. The Consolidated Plan is a five-year planning ..document which
describes local conditions and resources, identifies priority housing, human service, and
community development needs, and outlines a strategy and plan to address the identified needs.
The annual update of the Consolidated Plan is submitted to the U.S. Department of Housing and
Urban Development (HUD) to enable the City of Palo Alt0 to administer federal funds under the
Community Development Block Grant (CDBG) program
The Consolidated Plan is meant to serve as a guide to insure that federal funds are directed toward
the most urgent community needs, and that funding decisions are consistent with identified
priorities and strategies. The Action Plan identifies the activities which the City anticipates
undertaking in fiscal year. 1998/99 with CDBG funds, and describes the activities which the City
plans to undertake to affirmatively further fair housing choice.
Federal Resources
The amount of the City’s 1998/99 CDBG entitlement grant from HUD is $733,000. In addition
to the grant, it is estimated that $45,000 in Program Income will be available in fiscal year
1998/99. Program Income is defined as income directly generated from the use of CDBG funds.
The main sources of Program Income are from payments on loans made with CDBG funds, or
from rental income in excess of expenses on property acquired or improved with CDBG funds.
The majority of CDBG Program Income is received from loan repayments under the City’s former
Housing Improvement Program (HIP) single family rehabilitation program..
The estimated 1998/99 CDBG funds are as follows:
FY 1998/99 CDBG Allocation
1998/99 Estimated Program Income
Total Available
$733,000
45.000
$778,000
Public Review and Public Hearings
On Thursday, October 9, 1997 the Palo Alto Human Relations Commission held a public hearing
at City Hall to provide an opportunity for citizen comment on Palo Alto’s housing, human service,
and community development needs. The hearing confirmed that the greatest community need
continues to be the lack of housing affordable to lower income persons. No changes to the
previously identified priorities were made as a result of the hearing.
HUD regulations require that the draft Action Plan annual update be available for a 30-day public
review and comment period. The public review and comment period for the 1998/99 Plan runs
from April 1, 1998 to April 30, 1998. Interested citizens are invited to submit written comments
on the Plan to Suzanne Bayley, Planning Division, City of Palo Alto, 250 Hamilton Avenue, Palo
Alto, CA 94301, or to provide comments directly at the scheduled public hearings identified
below:
The City of Palo Alto Finance Committee will hold a public hearing at 7:00 p.m. on April 7,
1998 to review the proposed 1998/99 CDBG funding allocations, and the Palo Alto City Council
will hold a public hearing at 7:00 p.m. on May 11, 1998 to adopt the 1998/99 CDBG funding
allocations (annual Action Plan), and authorize its submittal to HUD.
HOUSING
Local and Other Resources
The primary local housing resource available in the City of Palo Alto is the City’s Housing
Reserve. The Housing Reserve has two components, the "Commercial Housing In-Lieu Fund",
and the "Residential Housing In-Lieu Fund". The Primary purpose of the Commercial Fund is
to increase the number of affordable housing units for Palo Alto’s work force.
The Residential Fund can be used for acquisition, rehabilitation, new construction and
predevelopment of low income housing.
The Commercial Housing In-Lieu Fund is funded with housing mitigation fees required from
developers of commercial and industrial space. As of 12/31/97 the fund had approximately
$1,300,000 in funds available for new projects. ’ The Residential Housing In Lieu Fund is funded
with mitigation fees provided under the City’s Below Market Rate (BMR) housing program from
residential developers. As of 12/31/97 this fund had an unrestricted balance of approximately
$700,000.
Leveraging and Matching Requirements
The City of Palo Alto will leverage federal and private housing funds to the greatest extent
feasible consistent with the goals identified. The City will encourage housing project sponsors
to seek private f’mancing and private grants. The City will also utilize its local Housing Reserve,
as appropriate, to leverage federal and private housing funds.
The City of Palo Alto is not an entitlement jurisdiction for HOME funds. The only possible way
to access HOME funds is for the City, or eligible nonprofit organizations, to apply to the State
of California for the funds in an annual competition. Due to excessive demand for the state’s
HOME allocation, and rating criteria that doesn’t favor areas like Palo Alto, it is very difficult
to secure an award.
It is possible, however, that the City will apply for state HOME funds during the 1998 funding
round which is usually announced in the fall. City staff will analyze the readiness of potential
projects, such as the Sheridan acquisition, and submit an application if there seems to be a
reasonable likelihood of an award. Local Housing Reserve funds could be used as the required
match. Where eligible, CDBG funds, which are obligated for housing activities and support
services, could also be used as a portion of the matching requirement for. federal housing
programs (for example, Shelter Plus Care).
LOCAL, PUBLIC AND PRIVATE RESOURCES FOR AFFORDABLE HOUSING
Activit,v:Acquisition
LOCAL, PUBLIC:
New Home Buyer Rental Homeless Homeless
Rehabilitation Construction Assistance Assistance Assistance Prevention
Comm. Hsg In-
Lieu Fund
Residential Hsg.
In-Lieu Fund
tit}, owned land
MCC Program
Housing Bond
Trust Fund
County Housing
Authorit,v Sec 8
County Dept of
Social Services
PRIVATE RESOURCES:
BMR Rental &
Owner Program
Private Lenders:
AHP
Nonprofit
Developers
Private
Foundations &
Churches
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
3
Priority Housing Needs
The City of Palo Alto’s Consolidated Plan and Housing Element both emphasize the great need
for affordable housing for low and very low income households in Palo Alto. While all types of
housing are needed in the City, the Consolidated Plan objectives focus on the creation and
preservation of rental housing, with an emphasis on housing for singles and very small households
who are homeless, at risk of h0melessness, very low and -low income housing for persons with
special needs, and housing for families with children.
Housing Development Fund: Purpose and Operations
The purpose of the Housing Development Fund is to have funds available on an ongoing basis to
utilize when necessary to facilitate the development, rehabilitation and preservation of low
income, multifamily housing. Housing development opportunities come up throughout the year
and, due to the nature of the real estate market, a quick response is frequently necessary. The
Housing Development Fund includes housing funds from several sources, primarily the CDBG
Housing Fund, the City Housing Reserve (with the commercial and residential components), and
HOME trust funds. Each funding source is accounted for separately.
The actual process for initiating a project will vary depending on the particular circumstances.
Usually, a nonprofit housing sponsor will apply to the Department of Planning and Community
Environment for housing subsidy funds when they are in negotiation for a particular site. At other
times, the City may issue a Request For Proposals. Whenever possible, requests for CDBG
housing funds are considered in the annual CDBG allocation process.
The City may provide funding from a variety of sources depending on the nature of the project.
The Planning Department will present recommendations for each project together with a proposed
funding package to the City Council for approval. In most all cases, funds will be provided as
a loan. The loan will be secured by the property. The repayment terms and interest rate have to
be tailored to the particular project since low income housing typically is financed from multiple
sources with specific requirements. Wherever possible, the City will attempt to obtain a
repayment of its funds at some point in the future. Repayment of loans will enable the Housing
Development Fund to continue to be used to create new housing opportunities even if federal
subsidies decline in the future.
Miscellaneous Costs Related to Site and Project Feasibility
CDBG Housing Funds may also be used to pay for costs associated with the investigation of the
feasibility of sites and properties for acquisition by the City or nonprofit organizations for
affordable, low income housing. These costs usually need to be paid prior to a project being
officially created in the budget. Typically these costs are for appraisals, environmental studies
and soil testing, title reports and design sketches. Usually no more than $25,000 per fiscal year
will be needed for these expenses, and often less.
Funds may be used for emergency loans for single family rehabilitation, even though the City no
longer has an active single family rehabilitation loan program. It is possible that serious
4
emergency needs may occur, and in such situations, income qualified homeowners could apply
for a rehabilitation loan in order to make necessary repairs. The intent is only to provide financial
assistance to income eligible homeowners who’s homes have serious building code deficiencies
and who have no other resources to undertake repairs.
Funds may also be needed for other housing projects not presently known which meet the housing
needs identified in the Consolidated Plan. CDBG funds are a vital part of the financing package
for low income housing development projects. They are an important source of funding for the
earlier phases of a housing project. CDBG funds are a fairly flexible source for predevelopment
and acquisition costs. Nonprofit housing developers typically need CDBG funds to complete
preliminary architectural and environmental studies to determine the feasibility of a proposal.
This work must be done in order to obtain federal and state financing or private.bank loans. For
some types of housing subsidies, the CDBG funds count as a local match or equity. CDBG funds
can also be used to acquire existing rental apartments and to repair and renovate rental housing.
However, directly paying for new construction of housing is not an eligible activity under CDBG
regulations.
T.he projects which may need funding from the Housing Development Fund during FY 98-99 are:
.. . Project Number of Units
Sheridan Apartments, 360 Sheridan
Avenue, Palo Alto
Feasibility, Investigations, and Site
Acquisition for Family Apartments
Group Homes for Lower Income Persons
with Disabilities
Preservation of Existing HUD Subsidized
Units to Prevent Conversion to Market
Rate Units
Miscellaneous Expenses Related to
Site and Project Feasibility ....
Emergency Rehabilitation Loans for
Single Family Owners
Acquisition, existing
units
New construction
Rehabilitation
Acquisition &
Rehabilitation
N/A
Rehabilitation
57 elderly and
handicapped units
Estimated
30+ units
Estimated
16 units
248 units
N/A
As needed basis
1998/99 Activities to be Undertaken
Acquisition and Rehabilitation of the Sheridan Apartments It is anticipated that the acquisition
and rehabilitation of the Sheridan Apartments will be the primary use of housing funds in the
1998/99 fiscal year. The Sheridan is a 57-unit apartment complex on approximately one acre of
land located at 360 Sheridan Avenue between Birch and Ash Streets in the California Avenue
business district area. All apartments are one bedroom, one-bath units of about 550 square feet
and each has either a balcony or a patio. The three story building has an elevator and a community
room adjoining a garden. The project was designed for independent living by the elderly and
persons with disabilities.
Most of the residents of the Sheridan are single, elderly persons with very low incomesl
Currently all but one resident is assisted under the HUD Section 8 program which requires very
low or low incomes. Typically, residents receive income from SSI benefits, social security or
small pensions. The building was constructed in 1979 by a private, for-profit investment
partnership. The developers acquired the site from the City, and it was sold with City deed
restrictions which were intended to ensure that the project remained under the Section 8 program
as long as subsidies were available. The developers utilized an FHA-insured loan and received
a 20-year commitment of federal Section 8 rental assistance for all 57 units. The Section 8
contract expires in April, 1999.
Last year, the owners decided to sell the project. The Palo Alto Housing Corporation (PAHC)
attempted to negotiate a purchase agreement with the owners, but in October 1997, the owners
accepted an offer from an investor buyer for $5.8 million. The investor later withdrew from the
deal when the implications of the City deed restrictions became clear. PAHC has since
successfully negotiated a purchase agreement with the owners for $5.1 On February 12, 1998 the
City Council approved a pre-acquisition funding agreement providing PAHC with a $145,500 loan
of CDBG Housing Development Fund money for feasibility studies and financing applications.
PAHC intends to preserve the Sheridan in its existing, use as Section 8 assisted housing for very
low-income seniors and other persons with disabilities. Under legislation approved last year, it
is expected that HUD will renew the Section 8 rental assistance contract when it expires in 1999.
PAHC is currently evaluating several financing alternatives and needs the information being
obtained from the appraisal and property inspections before they can determine the best plan and
accurate cost estimates. However, preliminary estimates indicate that approximately $2.6 million
of the total purchase and rehabilitation costs would need to be funded from City sources.
The sources for the City’s funding are expected to be the entire existing balance of the Residential
Housing In-Lieu Fund and the CDBG Housing Development Fund, including a major allocation
from the fiscal year 1998/99 entitlement grant. It is expected that PAHC will submit an
application for housing tax credits in May, 1998; with the funding decisions announced in late
July, 1998. If PAHC is successful in their tax credit application, .the property could be purchased
by the end. of calendar year 1998. If the tax credits are not awarded in 1998, PAHC will reapply
in early 1999.
The $513,950 1998/99 allocation to the CDBG Housing Development Fund will be added to the
existing unencumbered balance of $1,014,750. The total amount available in the CDBG Housing
Development Fund would be $1,528,700.
COMMUNITY DEVELOPMENT
Human Services
In fiscal year 1998/99, the City will provide approximately $1,068,000 from the General Fund
in support of human service programs through its Human Service Resource Allocation Process
(HSRAP). The HSRAP funds, in. conjunction with the CDBG public service funds, are distributed
to local non-profit agencies whose programs serve the needs of seniors, children, youth and
families, persons with disabilities, and those who are homeless, or at risk of homelessness. A
variety of supported programs provide fair housing activities, mental and physical health care
services, tenant/landlord mediation, information and referral, subsidized child care, support for
victims of domestic violence and rape, adolescent counseling, emergency food, nutritional
services, recreational activities, and subsidized para-transit services.
CDBG Public Service Funds
Due to the decrease in the CDBG allocation from HUD for fiscal year 1998/99, and the reduction
in the amount of anticipated program income, the CDBG public service funds have been reduced
eleven percent from their 1997/98 level. This cut will have serious implications for the public
service agencies funded through the CDBG process. No new services were recommended for
funding due to the overall reduction in funding. The cuts in established programs will decrease
overall the number of persons served and the number of units of service provided.
Priority Public Service Needs
All of the public service activities included in the 1998/99 funding cycle address the priority
public service goals of:
a) relating directly to the housing needs of low income persons
b) homeless shelter operating costs and the provision of auxiliary or related services
c) services which address other needs of low income, elderly or special needs persons.
Homeless Prevention
Palo Alto will continue to provide CDBG funding to the local provider of shelter and ~homeless
services, the Urban Ministry of Palo Alto (UMPA), and to a regional provider of shelter and
services, the Emergency Housing Consortium (EHC). The allocations are, however, significantly
less than in the previous year. UMPA funds have been reduced by seven percent,, and EHC
funding has been reduced by 27 percent. City funds will be used to support casework
management at the new regional Clara Mateo Shelter Alliance in Menlo Park. The City will
continue to work with Urban Ministry to provide opportunities for organizational capacity
building in order to increase the level and quality of services available. Funds will be targeted
to the provision of essential services such as food and the local rotating church shelter program.
Palo Alto will support Countywide efforts to obtain greater funding for the emergency Rental and
Mortgage Assistance Program operated by the Emergency Assistance Network of local agencies
(the American Red Cross operates the program in the Palo Alto area) which provides loans and
7
grants to prevent households from losing their housing or defaulting on home mortgages. The
City HSRAP program provides General Funds in support of the Red Cross’ homeless prevention
program, Alliance for Community Care’s homeless counseling program, Mayview Community
Clinic’s low cost health care services, and the Senior Coordinating Council’s shared housing and
housing counseling programs. Peninsula Area Information and Referral Services’ tenant/landlord
mediation program and Palo Alto Housing Corporation’s housing information and referral
program provide assistance with rental housing issues to help clients maintain or find affordable
housing.
The City will continue working with the Santa Clara County Collaborative on Housing and
Homeless Issues, and other local jurisdictions, to increase the number of shelter beds, transitional
housing units, and supportive services for homeless individuals and families. The Collaborative
was created in 1991 to provide a formalized, community-based process to address the issues of
homelessness on a regional basis. A Continuum of Care Plan was developed which identified key
components in addressing the long-term needs of homeless persons and families. The plan has
been used to identify gaps in services, and to allow scarce federal and other resources to be used
as effectively as possible.
Transition From Homelessness to Permanent Housing
The Barker Hotel, owned and operated by the Palo Alto Housing Corporation (PAHC), has 26
units of permanent Single Room Occupancy (SRO) housing at rents affordable to persons with
incomes between 30% and 50% of the median income. Five of the Barker’s units are fully
accessible by wheelchair users. Priority for occupancy is for persons who are homeless (either
unsheltered or sheltered); persons with disabilities and persons of extremely low incomes. CDBG
funds will be provided to PAHC to provide on-site supportive counseling services for existing
tenants to increase rental stability, and to screen prospective tenants. Three of the units are
available with tenant based Section 8 subsidies through the County’s "Shelter Plus Care" program.
In March 1998, the Palo Alto Housing Corporation’s newly completed "Alma Place" opened its
doors at 753 Alma St. in Palo Alto. The project, a 106 unit single room occupancy residence
hotel, is affordable to low and very low income persons due to the layering of subsidies from City
Housing Reserve .funds, a private bank loan, an Affordable Housing Program (AHP) Grant, and
an award of low income housing tax credits. The studio apartments rent for $330 to $490 per
month and are available to persons earning between $6,600 and $20,000 a year. Six of the units
have tenant based Section 8 rental subsidies through the Shelter Plus Care program.
Analysis of Impediments to Fair Housing Choice
The City of Palo Alto completed an Analysis of Impediments to Fair Housing Choice on February
6, 1996. That report identified a lack of housing options affordable to persons of low and
moderate income as the major impediment to housing choice. Housing discrimination was also
identified as an impediment, with cases based on familial status the most often reported.
However, the number of cases of discrimination against persons with physical and mental
disabilities has been increasing. To address this problem, Mid-Peninsula Citizens for Fair
Housing has secured a grant from a local foundation to produce an educational video during the
1998/99 fiscal year on disability discrimination in housing.
Palo Alto plans to undertake the following actions to foster and maintain affordable housing, and
to address housing discrimination during the 1998/99 fiscal year:
Provide funding to the local fair housing agency, Mid-Peninsula Citizens for Fair Housing
(MCFH) to reduce discrimination in housing by:
a.Investigating a minimum of 15 cases of housing discrimination
b.Conducting 25 consultations with persons who believe they have been
discriminated against
c.Maintaining a pool of 50 testers for investigations and conduct 3 trainings
d.Maintaining a panel of 10-15 attorneys for referral and coordinate an annual
meeting for participating attorneys
e.Running biweekly ads in the Palo Alto Weekly and daily ads in the San Jose
Mercury News, and one display ad promoting fair housing
f.Distributing 100 fair housing brochures
g Running 20 public service announcements for local radio/TV broadcasts
h.Making 7 educational presentations to the community
I.Monitoring and reporting on four rental sites
j Showing the educational video on housing discrimination produced by MCFH on
local cable TV
Continue to support the Human Relations Commission in their documentation and
investigation of hate crimes, and in their support of diversity and disability issues.
Continue to monitor the provision of fair. housing services by MCFH to ensure that
adequate services are being provided, and that services are provided in the most cost
effective means. Palo Alto will participate ina study of fair housing service delivery and
effectiveness in Santa Clara County by the Office of Housing and Community
Development. The study is expected to be completed in fiscal year 1998/99.
Continue the City’s funding support of affordable and supportive housing services which
provide housing information and referral, tenant landlord mediation, and shared housing
counseling.
Geographic Distribution
Housing Activities: The City will consider the provision of all types of housing assistance on a
Citywide basis consistent with the policies of the City’s Comprehensive Plan. The City does not
have specific target areas for housing activities but attempts to provide housing affordable to lower
income persons throughout the City.
9
Community Development Activities: Specific efforts have been coordinated in the Community
Services and Police Departments to focus on activities and services in the Ventura neighborhood.
A number of City sponsored programs and activities serving low and very low income persons
have either been undertaken or are proposed. A police substation was opened in the area with the
goal of improving contact with the community. The Ventura Neighborhood (Census tract 5107,
Block Group 2) has a large proportion of modest rental housing, a relatively high proportion of
minority and ethnic groups and 48.46 % of the households are below the CDBG income eligibility
limits.
Amendments to Plan
Prior to the submission of any substantial change in the proposed use of funds, citizens will be
provided reasonable notice of, and the opportunity to comment on, the. proposed plan
amendments(s).
Urgent Need Activities
In the event of a local, state or federal disaster declaration for areas within the boundaries of the
City of Palo Alto, the City reserves the right to use CDBG or other available federal funds to
abate immediate and necessary hazards. Such funds may be used for staff efforts, loans, or
outright grants to affected parties, as approved by City Council and allowable under the pertinent
Federal Guidelines.
Monitoring of Activities
The City will continue to monitor closely the activities carried out to further the goals oi the
Consolidated Plan. For all CDBG and HOME funded activities, an annual performance report
will be completed in accordance with federal requirements detailing the dollars expended, the
beneficiaries served, and the program goals achieved. Additionally, City staff will monitor each
grant subrecipient, as necessary, to insure compliance with all regulations governing their
administrative, financial, and programmatic operations; and to make sure the subrecipients achieve
their performance objectives within schedule and budget.
Coordination
As part of the development process of the Consolidated Plan, the staffs of the CDBG entitlement
citieg of Palo Alto, Sunnyvale, Mountain View, Santa Clara, Gilroy, Milpitas, San Jose, and the
Urban County of Santa Clara met to discuss data resources, and to coordinate requests for
information to both public and private Countywide agencies. These meetings have continued and
contributed to a coordinated approach to the Analysis of Impediments of Fair Housing Choice.
The meetings have helped the participants better understand the County and nonprofit social
service structure.
Over the last several years, the entitlement cities in Santa Clara County have cooperated in the
joint CDBG funding of a number of community development projects. Projects jointly funded
include Second Harvest Food Bank’s distribution center, the New Children’s Shelter, Emergency
l0
Housing Consortium’s Homeless Reception Center, and Social Advocates for Youth’s group home
renovations. These efforts are expected to continue.
To ensure a coordinated approach to the City’s human service funding efforts, the CDBG
Coordinator and the Administrator of Human Services meet to review and discuss applications
received through both the CDBG and HSRAP processes. Additionally, a member of the Human
Relations Commission serves on the CDBG Citizens Advisory Committee to avoid duplication of
effort and to assure collaboration within Palo Alto. The CDBG and housing staff attend and
participate in the semi-annual Human Services Provider Network meetings coordinated by the
Human Services Division to promote understanding and collaboration among the local public
service agencies.
Application for Federal
Assistance
1. Type of Submission:
Application:Non - Construction
~reapplication:
2. Date Submitted
05/15/98
3. Date Received by State
4. Date Received by Federal Agency
Applicant Identifier
E~-98-MC-06-O020
State Application Identifier
Federal Identifier
5¯ Applicant Information
Legal Name
CITY OF PALO ALTO
Address
250 Hamilton Avenue
Palo Alto, CA 94301
Santa Clara County
6. Employer Identificat=on Number (EIN):
8.Type of Application:
Type: Continuation
10 Catalog of Federal Domest=c Assistance Number:
Catalog Number: 14218
Assistance Title: Community Development Block Grant
12. Areas Affected by Project:
The City of Palo Alto, County of Santa Clara, State of
California
Organizational Unit
Department of Planning & Community Environmen
Contact
Suzanne Bayley
(650) 329-2428
7. Type of Applicant:
Municipal
9. Name of Federal Agency:
U.S. Dept. of Housing & Urban Development
11.Descriptive Title of Applicant’s Project:
The City of Palo Alto’s Community Development Block
Grant (CDBG) Program for Fiscal Year 1998/1999
13. Proposed Project:
Start Date I Start Date
07/01/98 I 06/30/99
15. Est=mated Funding:
a. Federal
$733,000
b. Applicant $o
c. State $o
d. Local $o
e. Other $o
f. Program Income
$45,000
g. Total
$ 778,000
14. Congressional Districts of:
I
a. Applicant b. Project
12th Congressional District 12th Congressional District
16. Is Application Subject to Review by State Executive Order 12372 Process?
Review Status:Program not covered
17. Is the Applicant Delinquent on Any Federal Debt?
No
18. To the best of my knowledge and belief, all data in this application/preapplication are true and correct, the document has been duly authorizedby the governing body of the applicant and the applicant will comply with the attached assurances if the assistance is awarded. ¯
a. Typed Name of Authorized Representative I b. Title
June Fleming I
d. Signature of Authorized Representative
City Manager
c. Telephone Number
(650) 329-2483
e. Date Signed
05/13/98
Funding Sources
Entitlement Grant (includes reallocated funds)
CDBG
ESG
HOME
HOPWA
Total
$733,000
$0
$0
$0
Prior Years’ Program Income NOT previously programmed or reported
CDBG $0
ESG $0
HOME $0
HOPWA $0
Total
Reprogrammed Prior Years’ Funds
CDBG
ESG
HOME
HOPWA
Total
$0
$0
$0
$0
Total Estimated Program Income
Housing Improvement Program
Palo Alto Housing Corporation
Total
$25,000
$20,000
Section 108 Loan Guarantee Fund
$733,000
$0
$0
$45,000
$0
TOTAL FUNDING SOURCES $778,000
OtherFunds $0
Submitted Proposed Projects Totals $778,000
Un-Submitted Proposed Projects Totals $0
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~ Water Area
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(~) HUD Offices
~ Proposed Projects
Propose d Projects
Anti-Crime Programs
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