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HomeMy WebLinkAbout1997-04-15 City CouncilManager’s City of Palo Alto Summary Repor TO:HONORABLE CITY COUNCIL ATTENTION: FINANCE COMMITTEE FROM:CITY MANAGER DEPARTMENT: Planning and Community Environment DATE:April 15, 1997 CMR:202:97 SUBJECT:1997/98 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING ALLOCATIONS This report transmits the recommendations of City staff and the CDBG Citizens Advisory Committee (CAC) for the expenditure of Community Development Block Grant funds for the 1997/98 fiscal year. The Finance Committee is requested to assess the recommendations and forward on to the full Council their recommendations for CDBG expenditures. RECOMMENDATIONS ~ Staff recommends that the Finance Committee recommend to the City Council approval of the following: The funding allocations, as recommended by staff and the Citizens advisory Committee in Attachments A and B, be included in the 1997/98 CDBG Action Plan. Staff be authorized to submit to the Department of Housing and Urban Development (HUD), by the May 15, 1997 deadline, the proposed Action Plan for the expenditure of 1997/98 CDBG program funds. The City Manager, on behalf of the City, be authorized to execute the HUD application and Action Plan and any other necessary documents concerning the application, and to otherwise bind the City with respect to the application. POLICY IMPLICATIONS The 1997/98 CDBG Program and funding recommendations, as presented, do not represent a change to existing City policies. Funding for the CDBG program, however, has decreased CMR:202:97 Page 1 of 9 by five percent over the past three years without considering the effects of inflation. This trend can be expected to continue. EXECUTIVE SUMMARY $1,040,000 is available for allocation through the CDBG program in 1997/98. The Citizens Advisory Committee and staff are in agreement on funding recommendations which are shown in Attachments A and B. Housing affordable to lower income residents remains the highest priority for .CDBG funding. 73 percent of available funding is being proposed for affordable housing projects. Applications from Palo Alto Housing Corporation and Mid- Peninsula Housing Coalition were received in response to the City’s request for proposals from housing developers interested in pursuing a site for the development of a new family housing project. The applications were evaluated and analyzed based on the application material presented, and interviews with the agency representatives. Although both agencies were felt to be competent and capable of developing the intended new housing, MPHC was selected for funding. FISCAL IMPACT The 1997/98 HUD CDBG allocation is $782,000. Program income and the reallocation of previously allocated but unspent funds bring the total available for allo’cation in 1997/98 to $1,040,000. ENVIRONMENTAL ASSESSMENT For purposes of the California Environmental Quality Act (CEQA), budgeting is not a project. PREPARED BY: Suzanne Bayley DEPARTMENT HEAD REVIEW:. KENNETH R. SCHREIBER Director of Planning and Community Environment CMR:202:97 Page 2 of 9 C ty of Palo Alto Manager’s Report SUBJECT:1997/98 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING ALLOCATIONS This report transmits the recommendations of City staff and the CDBG Citizens Advisory Committee (CAC) for the expenditure of Community Development Block Grant (CDBG) funds for the 1997/98 fiscal year. The Finance Committee is requested to assess the recommendations and forward on to the full. Council their recommendations for CDBG- expenditures. RECOMMENDATIONS Staffrecommends that the Finance Committee recommend to the City Council approval of the following: The funding allocations, as recommended by .staff and the Citizens Advisory Committee in Attachments A and B, be included in the 1997/98 CDBG Action Plan. t Staffbe authorized to submit to the Department of Housing and Urban Development (HUD), by the May 15, 1997 deadline, the proposed Action Plan for the expenditure of 1997/98 CDBG program funds. The City Manager, on behalf of the City, be authorized to execute the HUD application and Action Plan and any other necessary documents concerning the application, and to otherwise bind the City with respect to the application. BACKGROUND The City of Palo Alto receives funds annually from the U.S. Department of Housing and Urban Development (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 communities by providing decent housing and a suitable living environment, and expanding economic opportunities, princ~gally for persons of low and moderate income." CMR:202:97 Page 3 of 9 HUD regulations require that, in the. aggregate, a minimum of 70 percent of the CDBG funds be spent on activities which are of benefit to low and very low income persons. Additionally, all eligible projects must meet one of the three national objectives: 1)Activities which are of benefit to low and very low income persons; 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 activities which benefit low and very low income persons. 1997 HUD income data for Santa Clara County define median income for a family of four as $70,200. HUD income limitations classify low income persons as households with incomes of 80 percent of the median income, and very low income as 50 percent of median. In high-cost areas such as Santa Clara County, however, the low income figure is capped below the 80 percent figure. Currently the cap for low income persons is at 62 percent of median, or $43,500 for a family of four. The very low income limit is still 50 percent of median, or $35,100 for a family of four. HUD regulations require entitlement jurisdictions to produce and adopt a five-year Consolidated Plan which describes local conditions and resources; identifies priority housing and community development needs, and outlines a-strategy and Action Plan to address the identified needs. The Consolidated Plan is meant to serve as a guide to insure that federal funds are directed toward the most urgent needs, and that funding decisions are consistent with identified priorities and Strategies. Each year, the Action Plan is updated and submitted to HUD, serving as the application for funds. The Consolidated Plan for the Period July 1, 1995 to June 30, 2000 was considered and adopted by the full Council at a public hearing on May 1, 1995. HUD regulations also require that the draft Action Plan annual updates be available for a 30- day public review and comment period prior to their approval. The required public review and comment period for 1997/98 funding runs from April 1, 1997 through April 30, 1997. An ad was published in the Palo Alto Weekly on March 26, 1997 to inform interested members of the public about its availability. The full City Council will be asked to review and approve the 1997/98 Action Plan at a public hearing scheduled for May 12, 1997. Funding Categories: HUD regulations prov’ide for three categories of funding for eligible projects. Two of the categories have limitations to the amount of funds which can be expended during the program year. CMR:202:97 Page 4 of 9 Community Development - Capital Improvements 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 other similar activities. Public Services Funding for.program expenses in the "Public Service" category is limited to a maximum of 15 percent of the annual grant plus 15 percent of estimated program income from the current year (1996/97). The estimated maximum funding in this category for 1997/98 is $132,300, based on estimated 1996/97 program income projections of $100,000 and the 1997/98 grant allocation of $782,000. ($782,000 + $100,000 =$882,000 x 15% = $132,300). Program Administration Funding in the "Program Administration" category is limited to a maximum of 20 percent of the annual grant plus 20 percent of estimated program income for the succeeding year (1997/98). The estimated maximum funding allowed for 1997/98 under this category, is $170,400 based upon program income projections of $70,000, and the grant allocation of $782,000. ($782,000 + $70,000 = $852,000 x 20% =$170,400). The contract for fair housing services, City stafftime spent on overall CDBG program administration, and planning studies are eligible for reimbursement under this category. City stafftime spent on specific capital projects is considered a "project delivery" cost, and not. subject to the 20 percent limitation. The request for program~ reimbursement for City of Palo Alto staff expenses has been split between "administrative expenses" (the amount that falls under the cap), and project delivery expenses. Citizen Participation Federal regulations require that citizens receive information on a community’s proposed CDBG program in a manner which provides for timely examination, appraisal and comment. To address this requirement and encourage active citizen participation in the CDBG process, the Palo Alto City Council adopted a Citizen Participation Plan on December 13, 1993 which provides for a nine member CDBG Citizens Advisory Committee (CAC) to be selected by the Mayor. To recruit new members, ads were placed in the Palo Alto Weekly on November 10 and 15, 1996, and in the Palo Alto Daily News on November 18, 1996. Of the four applications received, two new Committee members were selected and appointed by Mayor Lanie CMR:202:97 Page 5 of 9 Wheeler. The remaining two applicants were found to have conflicts of interest which would disqualify them from participation on the Committee. Therefore, the Committee this year consisted of eight individuals, rather than a possible nine. To provide for coordination between the Human Service Resource Allocation Process (HSRAP), and the CDBG funding allocation process, a member of the Human Relations Commission (I-IRC) occupies one of the CAC slots. This year’s Committee included: Greg Avis, Karl Garcia, Jonathan Glendinning, Wyrm Hausser (HRC Liaison), Doan Lawrence, Michael Midolo, Carol Richards, and Margaret Toor. Greg Avis was selected as the Committee Spokesperson. The Citizens Advisory Committee held public meetings on January 7, 16, 23, 30; and February 6, 11, 20, and 27 in City Hall. Staff and the CAC reviewed and discussed all requests for funding, and interviewed representatives of each of the applicant agencies in order to reach consensus on their recommendations to Council. Funding Applications Applications for 1997/98 funding were mailed to an extended list of area housing and human service providers on November 1, 1996. A noticeannouncing the availability of applications for 1997/98 funding was also published in the Palo Alto Weekly on November 1, 1996. Completed applications were due by 5:00 p.m. on Friday, December 20, 1996. Proposal Review Criteria All funding applications were reviewed by City 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 priorities for fiscal year 1997/98 are summarized on Attachment C. The funding goals are not meant to be rigid, but to serve as guidelines consistent with the need. Based on the recommendations attached, the funding as a percentage of total dollars to be allocated is as follows: Affordable Housing Public Facilities Public Services Program Administration Goal Actual Amount Actual Percent 60%$ 760,200 73% 5%-0--0- 15%¯ 132,300 13% 20%147.500 ~ 100%$1,040,000 100% Other factors considered in the staff and CAC recommendations were: a) the urgency of the program or prqjeet; b) the effect of a delay (in funding) on the project or services provided; c) project/agency readiness; d) financial feasibility of the program or project; e) the income level, number and diversity of program or project beneficiaries; d) whether or not the request CMR:202:97 P~ge 6 of 9 increased the services provided or the number of clients served; e) whether or not the services were duplicated by other agencies; f) the agency’s previous performance experience and anticipated capacity to carry out the program or project; g) the availability of other funding sources to the applicant; and h) whether or not the goals of the service or project could be obtained with less funding. Funding Recommendations City staff and the Citizens Advisory Committee concur on the recommendations for funding for the 1997/98 CDBG program year. Attachment A is a chart showing .the applications received and the funding recommendations. Attachment B is a narrative, explaining the proposals and the funding recommendations in more detail. POLICY IMPLICATIONS The 1997/98 CDBG Program and funding recommendations, as presented, do not represent a change to existing City policies. However, it should be noted that there has been a steady decline in the actual amount of CDBG funding to entitlement communities over the past three years~ For Palo Alto, this has translated, into a five percent reduction without considering the effects of inflation. This trend can be expected to continue as HUD continues to struggle with staff reductions, the Section 8 renewal crisis, and the challenge of making welfare reform work. DISCUSSION Family Housing Site: To address the tremendous shortage of affordable rental housing, and to ensure the timely expenditure of CDBG funds, the .request for applications for 1997/98 funding included a special solicitation for proposals from nonprofit housing developers interested in pursuing site control on a vacant parcel in Palo Alto suitable for future housing development. City staffhad not received any requests for information or use of the available housing development funds, and determined that a specific request for interest was necessary in order to develop a project, which often requires several years. The request favored the development of family rental housing in the range of 30 to 60 units in order to meet the adopted housing development objectives of the Consolidated Plan and Housing Element. Applications for predevelopment funds were received from the Palo Alto Housing Corporation (PAHC), and from Mid Peninsula Housing Coalition (MPHC). The application from MPHC is recommended for funding. The CDBG Housing Development Fund has a current balance of $577,649, .and the Housing Reserve Fund has an available balance of approximately $400,000. A significant allocation of additional CDBG ft;nds is considered essential to acquiring a site at prices which could reach two million dollars, depending on the size and location of the parcel. CMR:202:97 Page 7 of 9 Project Status: There continues to be a backlog of physical projects in the CDBG program. A contract employee is currently being recruited to assist in the implementation, oversight and monitoring of the projects. If an experienced person can be hired before the end of the fiscal year, the backlog should be eliminated during the next program year. A listing of the current status of approved projects is included as Attachment D. ALTERNATIVES The Finance Committee may choose to recommend to the City Council an altemative funding scenario to the one presented by staff and the Citizens Advisory Committee, or modifications in the amounts or recipients of the projects presented for funding. FISCAL IMPACT The 1997/98 HUD CDBG allocation is $782,000. This amount represents a 1.3 percent decrease fromthe $792,000 available in 1996/97. In addition to the entitlement grant, it is estimated that $70,000 in "program income" will be available in 1997/98. Program income is defined as income directly generated 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. The other source of revenue is from the Palo Alto Housing Corporation when rental income exceeds expenses on properties acquired or rehabilitated with CDBG funds. $35,500 in previously allocated funds will be reallocated to new projects. This includes $21,000 originally allocated to Innovative Housing for rehabilitation of the shared home in East Palo Alto in 1996/97. Innovative Housing went out of business last year, and will not use the funds for the purpose intended. $1,746 is available in unused Senior Home Repair funds, and $12,754 in unused City of Palo Alto administrative costs. Additionally, Peninsula Children’s Center sold the group home for adolescents with developmental disabilities which was originally purchased with the help of CDBG funds in 1991. $76,495 was returned to the CDBG program from the sale of this home located at 3838 La Selva in Palo Alto. The balance of funds is a result of program income received in the prior fiscal year which was in excess of the amount anticipated. The total estimated 1997/98 funds are as follows: FY 1997/98 CDBG Allocation 1997/98 Program Income HIP PAHC Sale of PCC Home Excess Program Income received in prior years Reallocation of previously allocated, but unspent funds $782,00O 50,000 20,000 76,500 76,000 $1,040,000 CMR:202:97 Page 8 of 9 ENVIRONMENTAL ASSESSMENT For purposes of the Califomia 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 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. STEPS FOLLOWING APPROVAL Funding recommendations made by the Finance Committee will be forwarded to the City Council for review and approval at their regularly scheduled meeting of May 12, 1997. The Council will be asked to adopt a resolution establishing funding allocations, and approve the 1997/98 Action Plan containing the CDBG application and requisite certifications, and submit the application to HUD by the May 15, 1997 deadline. ATTACHMENTS Attachment A: Attachment B: Attachment C: Attachment D: Chart of 1997/98 funding applications and recommendations Narrative report containing staff and CAC funding recommendations Summary of 1997/98 CDBG funding priorities Status of approved projects CC:CDBG Citizen’s Advisory Committee Members Applicant Agencies CMR:202:97 Page 9 of 9 ATTACHMENT A 1997/98 CDBG.FUNDING REQUESTS AND RECOMMENDATIONS AGENCY/PROJECT TITLE Public Services 1. Catholic Charities 2. Emergency Housing Consortium 3. Palo Alto Housing Corp. 4. Urban Ministry 5. Outreach & Escort 6. Community Services Agency 7. Senior Adults Legal Assistance Sub-total Program Administration 8. Mid Peninsula.Citizens for Fair I-Isng 9. City of Palo Alto -CDBG Admin Sub-total Housing Production/Housing Rehabilitation 9. City of Palo Alto - Project Delivery ¯ 10. Senior Home Repair Program 11. PAHC - Predev. Family Housing 12. MPHC - Predev Family Housing 13. Stevenson House - Roof 14. Emergency Housing - Shelter Rehab 15. Next Step - Veterans Group Home 16. Community Housing - Fire Alarm 17. ALLIANCE - Group Home Study 18. Housing Development Fund Sub-total Total 1996/97 1997/98 13,400 14,070 10,700 11,200 37,100 100,400 58,000 75,000 6,000 8,000 -0-17,000 -0-8~000 233,670 19,600 18,260 t30,000 130~000 148,260 50,000 50,000 t-1,000 11,000 N/A 33,000 N/A 50,000 N/A 111,382 N/A 10,000 N/A 227,560 N/A 136,728 N/A 17,60.0 363,832 600~000 1,247,270 ..$1,629,2oo CAC & STAFF .RECOMMEND. 13,400 11,000 ~35,000 66,900 6,000 -0- 132,300 17,500 130~000 147,500 50,000 -0- 50,000 48,000 -0- 51,000 -0- 17,600 543~600 760,200 $1,040,000 1997198 Funds Available: FY 1997/98 CDBG Allocation 1997/98 Estimated Program Income Reallocation of previously allocated funds Prior unprogrammed.Program Income Public Service Cap~a,l, culation: FY 1997/98 Allocation FY 1996/97 Program Income (est) Administration_Cap Calculation: FY 1997/98 Allocation FY 1997/98 Program Income (est) 782,000 70,000 35,500 152~500 ¯ $t,040,000 782,000 100;000 882,000 x 15% = $132,300 ’782,000 -852,000 x 20% =.$170,400 ATTACHMENT B STAFF AND CAC FUNDING RECOMMENDATIONS FOR 1997/98 CDBG FUNDS PUBLIC ~qRRVICE APPIJCATIONS The total amount of funding available_for_applications in this category is limited to a maximum of $132,300 by the 15 percent public service cap. The funding amounts recommended by staff and the CAC total $132,300. A few increases were possible in this category this year due to the fact that Innovative Housing, which was previously funded at the level of $13,500, has gone out of business. ¯ 1. Catholic Charities 2625 Zanker Rd. Suite 200 San Jose, CA 95134-2107 Project:Long Term Care Ombudsman Program Request: Current Funding: Recommendation: $14,070 $13,400 $ 13,400 Dr~.fiptinm Agency provides confidential advocacy and complaint investigation services to the approximately 950 residents of Palo Alto’s skilled nursing .and - residential board and care facilities for the elderly. 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). Clients are counseled and represented in areas of patient/resident fights, physical and sexual abuse, quality of care, fiduciary abuse, neg!ect, diet, theft, incorrect placement, eviction, and other concerns. Recommendation: Current contract objectives are being met or exceeded. Services are necessary and not duplicated byanyother agency. Funding is recommended to continue at the current level. Environmental: Not a Project Under CEQA 2. Emergency HouSing Consortium P. O. Box 2346 San Jose, CA 95109 Project: Shelter and Services for the Homeless Request: Current Funding: Recommendation: $11,200 $10,900 $11,000 ~ca:iplitm: Agency provides emergency shelter and supportive services to homeless men, women, and families with children throughout Santa Clara County. Emergency Housing Consortium operates the Family Living Center in Santa Clara, the winter shelters at the National Guard Armories in Sunnyvale, San Jose, and Gilroy, and various transitional housing programs in San Jose. Supportive services include prepared meals, counseling, child care, and life skills workshops to help secure housing and/or employment. Recommendation: Current contract objectives are being met. For the first six months of the .1996/97 fiscal year, 39 homeless clients were provided with 877 .nights of shelter. Funding is recommended at a slightly increased level due to anticipated increases in the number of persons served. En_v_irm~am~: Not a Project under CEQA. 3. Palo Alto Housing Corporation (PAHC) 540 Cowper Street Suite G Palo Alto, CA 94301 Projects: a) Affordable Housing Information and Referral, Reprinting of the Affordable Housing, Directory; b) Casework Counseling at the Barker Hotel; c) Service Enriched Housing; d) Service Component for SRO Housing; d) Computer Learning Center - Arastradero Park Apartments Request: ¯ Oarrent Funding: Recommendation: $100,400 $29,300 $35,000 Dy.xeriplion: The mission of PAHC is to foster, develop, acquire, and operate low- and moderate-income housing in Palo Alto. PAHC has proposed several new and continuing projects. The information and referral, housing directory and Barker Hotel 2 Counselingare being provided in the current year. The new projects being proposed provide service enriched housing to tenants of subsidized housing in Palo Alto. Three new areas were proposed for funding: a) develop and maintain a service coordination program for low income residents which would assess longer term needs and develop strategies to help tenants; b) Service Program Development for SRO Housing. Develop a job related service program .for tenants of the new .Single Room Occupancy (SRO) residential development on Alma Street in Palo Alto; and c) Fund a staff person for a proposed computer learning center in Arastradero Park Apartments (APA). The funding request can be broken down as follows: 1996/97 Fundinp 1997/98 Reauest Recommendation Information & Referral and Housing Directory Barker Hotel Counseling Service Coordinator " SRO Service Program Computer Center-APA 20,700 36,900 30,000 8,600 8,600 5,000 -0-16,600 -0- -0-10,500 -0- 29,300 100,400 35,000 Recommendation: Current contract objectives are being met or exceeded. Staff and the CAC recommend an increase of forty five percent in funding for the information and referral program based on an increase in the number of calls received and services provided in light of the current rental housing crisis. Staff and the CAC are very supportive of the Barker Hotel counseling project and believe the services to be an essential component of the actual housing. However, the actual cost of providing the counseling for the first six months of 1996/97, indicates that, aunualized, the program should cost.approximately $5,000. Staff and the CAC do not recommend funding for the Other new proposals. While each is considered desirable, the three new.proposals request one hundred percent of the program cost from CDBG funds. With limited funds in the public service category, adding significant new programs cannot be accomplished without eliminating an existing service. PAHC may want to consider collaborating with existing services to provide at least a portion of the services envisioned. Not a project under CEQA. 4. Urban Ministry of Palo Alto (UMPA) P. O. Box 213 Palo Alto, CA 94302 Project: Services for the Homeless Request: Current Funding: Recommendation: $75,000 $58,ooo $66,900 De~m~xiom This agency.provides emergency assistance and supportive services to the local homeless and very low income population. Services include staffing of the drop- in center; case management and money management assistance; 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. Recommendation: Current contract objectives are being met. Staff and the CAC recommend a fifteen percent increase in funding due to anticipated increases in client population due to changes in welfare laws. The increase is also recommended in order to continue the administrative reforms which have lead to increased accountability. The agency has made notable improvements in administrative and financial systems as evidenced by the information available in their latest audited financial statements: Continued improvements to these systems is strongly encouraged.. Although there has been much progress in the organization since last year, UMPA has suffered from continued staffing turnover which undermines program continuity and accountability. A fully trained and staffed organization is essential to the successful implementation of program goals and .objectives. Ea3y_imnmen~: Not a project under CEQA. 5, Outreach And Escort, Inc. 97 East Brokaw Road, Suite 140 San Jose, CA 95112 Project:Special Needs Transportation Request:$8,000 4 Current Funding: Recommendation: $6,000 $6,000 ¯ Desr, filxtiom This proposal requests funding to provide farebox subsidies for low income disabled Palo Alto residents registered through the County’s Special Needs Transportation program. Outreach and Escort provides door to door paratransit services for eligible 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. Recommendation: Current contract objectives are being met. This service is not duplicated by other agencies. The subsidies provide mobility to very low income; disabled persons who cannot afford the transportation fares. Staff and the CAC recommend continued funding at the current level. Agency is encouraged to continue to coordinate reimbursements from third parties such as insurance companies for certain eligible treatments such as dialysis. Environmental: Not a project under CEQA. 6. Community Services Agency of Mountain View 204 Stiedin Road Mountain View, CA 94043 Project:Community Consortium Project: Alta Vista High School Counseling ¯Request:17,000 Current ’ Funding -0- Recommendation:-0- Desc, ritatiom The Community Consortittm Project is seeking funding to provide for the needs of at-risk students at Alta Vista alternative High School in Palo. Alto. The application describes a consortium comisting of Community Services agency of Mountain View (CSA), Community Health Awareness Council (CHAC), and local businesses who will all provide pieces of a coordinated, integrated Program designed to help at-risk students and their families. The prognunseeks to.serve Palo Alto teenagers who are unable to function in the local high school settings. A high percentage of the children have adopted lifestyles which include gangs, alcohol or drugs, anti-social behavior, truancy, and teen pregnancy as ways of coping. Funds would be used to provide case management services designed to assess the student needs, provide counseling with the student and the family, and to support and encourage academic progress. Recommendation: Staff and the CAC are very supportive of the goals of this program and the at-risk adolescent population it serves. Funding is not recommended, however, due to the limited budget and the fact that housing related activities remain the highest priority in the Comolidated Plan for the expenditure of the CDBG funds. Emdronmental: Not a project under CEQA. 7. Senior Adults Legal Assistance (SALA) 160 E. Virginia St., Suite 260 San Jose, CA 95112 Project: Legal Assistance to Palo Alto Elders Request:$8,000 Current Funding -0- Recommendation: -0- l)e~.fipfiom SALA proposes to expand their current program of free legal services to low income Polo Alto seniors by increasing the number of monthly appointments available at the Palo 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. . Recommendation: Staff and theCAC do not recommend funding for this project. Although the agency provides a very worthwhile service in the community, any new funding requested for senior services should be pdodtized in light of all the services available .for seniors. Environmental: Not a project under CEQA. 6 The total amount of funding available for applications in this category, is limited to a maximum of $170,400 due to the 20 percent cap on administrative expenses. The funding amounts recommended by staff and the CAC total $147,500. 8. Mid-Peninsula Citizens for Fair Housing (MCFID 457 Kingsley Avenue Palo Alto, CA 94301 Project: Fair Homing Services Request: On’rent Funding: Recommendation: $18,260 $19,600 $17,500 ~ 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 hous.ing and provide redress for those who have been discriminated against. HUD regulations require CDBG entitlement jurisdictions to affirmatively further fair housing choice.. Recommendation: Current contract objectives are being met. Fiscal year 1996/97 funding for regular contract objectives was $16,600 with an additional $3,000 for special outreach projects relating to discrimination against families with children. MCFH is in the process of completing those efforts by producing an educational video and sponsoring a fair housing seminar targeted to owners of rental properties with eight or fewer units. Staff and the. CAC recommend funding a 5 percent funding increase for basic contract services. The agency has been responsive in improving administrative procedures and by participating in the Mayor’s escalating rent committee. Environmental: Not a project under CEQA. 9. City of Palo Alto - Department of Planning and Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 Project: CDBG Program Administration/Project Delivery costs 7 Request: On’rent Funding: Recommendation: $180,000 ($130,000 admin; $50,000 project delivery) $180,000 $180,000 ~ 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 capl 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. Recommendation: Staff and the CAC recommend full funding. Anticipated changes to HUD programs and systems have increased and will continue.to increase the amount of staff time spent on learning new regulations and teelmology, and on preparing the required plans and reports. A newly required on-line accounting and reporting system 0DIS) was delayed, but will now be implement by September, 1997. The program administration budget has remained virtually unchanged for six years. It is expected that the $12,000 unspent in this category in 1995/96 will be fully used in the current year and in the 1997/98 fiscal year with the addition of the CDBG Rehabilitation Specialist contract. Environmental: Not a project under CEQA. HOUSING PRODUCTION/HOUSING REHABILITATION 10. Senior Coordinating Council 450 Bryant Street Palo Alto, CA 94301 Project:Senior Home Repair Program Request: Current Funding: Recommendation: $11,000 $11,000 Dmr.fipfiom This program provides subsidized home repair services to income eligible .Palo Alto homeowners who are 60 years of age or older. The program enables seniors to remain in their own homes as long as possible, and helps to maintain the quality of the existing housing stock within Palo Alto. Funds are used to provide subsidies for those unable to pay the fee for service. The program addresses the health, safety and housing needs of the low income senior population. Recommendation: Cturent contract objectives are on target. Although very supportive of the program itself, staff and CAC do not recommend.funding for the subsidy portion of this program next year. Funding for the Senior Home Repair Program itself is provided by City General Funds through the City’s Human Service Resource Allocation Process (HSRAP). It was noted that the Senior Coordinating Council has other resources and fundraising abilities with which to address this need. If subsidies for the program are a priority need for seniors, then the subsidy portion could also be re- prioritized from the HSRAP funds. 11. Palo Alto Homing Corporation (PAHC) 540 Cowper Street, Suite 201 Palo Alto, CA 94301 Project:Predevelopment New Family Homing Request:$33,000 Recommendation:$ -0- (See discussion below) 12. Mid-Peninsula Homing Coalition (MPHC) 658 Bait Island Road, Suite 300 Redwood City, CA 94063 Project: Predevelopment - New Family Housing Request: Recommendation: $50,000 $50,000 (See discussion below) Discussion of applications 11 a~d 12: D_e~r, fipfim~ The applications from Palo Alto Housing Corporation and Mid-Peninsula Housing Coalition (MPHC) were received in response to the City’s 1997/98 CDBG application requesting proposals from housing developers interested in pursuing a suitable site for the development of a new multi-unit rental housing project in Palo 9 Alto. The proposed project would provide 30-60 units of affordable rental housing with housing for families in the highest priority, but elderly housing given consideration if an appropriate site could be secured. Only one of the proposals could be selected at this time as the money in the housing development fund would only support the purchase of one parcel. The proposals are for seed money to secure an option and conduct a preliminary feasibility analysis of a potential site. Funding is expected to. cover out-of-pocket direct costs of assessing possible sites, negotiating with sellers and conducting due diligence. After careful consideration of the proposals, staff and the CAC recommend funding of the proposal by MPHC. Recommendation: Both agencies were deemed to have the necessary ability and capacity to implement the project, .and their completed projects were seen to be of high quality. Although the proposal from PAHC is for $33,000 instead of the $50,000 requested by MPHC, the PAHC _proposal does .not include the cost of a site option payment. This cost would need to be added to the PAHC proposal, making the proposal budgets virtually identical. The knowledge and technical experience of the MPHC staff, and the fact that they had developed more projects of this type was seen as a distinct advantage. _Additionally, MPHC has formedan approved Community Housing and Development Organization, (CI-IDO) whose geographic area could be expanded to include Palo Alto enabling them to apply for HOME funds directly from the State of California. MPHC hashad extensive experience developing mixed income projects by use of partnerships or joint ventures with for profit developers on parcels where the site was.larger than what was needed for affordable housing. MPHC has also had experience in developing affordable rental housing for families with on-site child care. Environmental: Feasibility and planning studies are statutorially exempt under CEQA. 13. Palo Alto Senior Housing Project, Inc. (Stevenson Iteuse) 455 E. Charleston Rd. Pale Alto, CA 94303 Project: Roofing.of Buildings A and B in Senior Residential Facility Request: Recommendation: 10 Descdpliom Stevenson House is a senior residential facility providing 109 units of affordable housing for approximately 135 independently functioning, older adults. Funds are requested to re-roof two of the three buildings in the complex. Recommendation: Staff and the CAC recommend funding for the roof of Building B which is in the most need of repair. F_av2ranm~ Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. 14. Emergency Housing Consortium (EHC) P. O. Box 2346. San Jose, CA 95109 Project: Additional Funding for the New Regional Emergency Shelter and Reception .Center for the Homeless at 2011 Little Orchard Street in San Jose. Request:10,000 Recommendation:4)- Dr, scripfiom This application requests an additional allocation of CDBG funds for the regional emergency shelter acquired by EHC and currently being rehabilitated. The City of Palo Alto committed $50,000 in 1994/95 CDBG funds for a potential site at 1020 Timothy Drive. In 1996/97 those fundswere reprogrammed to the Little Orchard site. There is a single story, 35,220 square foot building on the property which is being rehabilitated. The cost of the project has increased due to extensive conditions imposed by the Conditional Use Permit, and by increased construction costs. Many entitlement cities in Santa Clara County are participating in the funding of this project. Recommendation: Staff and the CAC do not recommend additional funding for this ¯ project. The amount of the.original contribution is.appropriate given the location of the facility and the number of potential clientele from the Palo Alto area. Environmental:. The City of San Jose is the lead agency on this project and has prepared the environmental documents. A negative declaration was certified by the San Jose Planning Commission on March 13, 1996. For purposes of NEPA, a Format Environment Assessment was completed on January 25, 1996 with a finding of no significant impact. 11 15. Veterans Workshop, Inc./Next Step Center 795 Willow Road, MS 116B6 Menlo Park, CA 94025 Project: Acquisition and Rehabilitation of Shared Transitional Housing for Veterans at 442 Margarita Street, Polo Alto Request: Recommendation: $227,560 51,000 ~ The existing shared single family home provides affordable transitional housing for seven disabled, very low income veterans enrolled in job training. programs. The home is owned by two nonprofit organizations, Veterans Workshop (VWS), and Veterans Task Force. Veterans Task Force has a $51,000 note on the property, and has requested repayment under the terms and conditions of the note.. Payment of the note would require sale of the home and displacement of the residents without additional funding. The project provides housing for seven disabled, very low income veterans. Veteram Workshop also provides supportive services to the residents. Recommendation: Staff and the CAC recommend funding for the acquisition portion of the project in order to preserve ~the use. The $51,000 would be loaned to VWS with deferred interest and principal payments. The loan.would be recorded against the property and due on sale or change of use. Environmental: Purchase of anexisting single family residence is not a project under eEQA. " 16. Community Housing, Inc, 656 University Avenue Palo Alto, CA 94301 Project Title: Replacement of Fire Alarm System for Lytton Gardens I and H Request:$136,728 Recommendation: D_r.sra:ipIionz Community Housing,, Inc. owns and manages Lytton Gardens I and H, providing 318 subsidized independent and assisted living units for low and very low 12 income seniors. This proposal requests funding for replacement of the fire emergency call system. Recommendation: Staff and the CAC do not recommend funding. The existing fire and emergency alarm system is working. The project was not seen to be a critical enough need in the next year to divert funding from the goal of providing a new housing project. Environmental: categorically exempt under Section 15301 of CEQA, .minor change to an existing facility. 17.Alliance for Community Care (Formerly Miramonte Mental Health) 438 N. Whit~ Road San Jose, CA 95127 Project Title: Predevelopment Funds to Conduct Feasibility Study for Property at 650 Waverley, Palo Alto Request:$17,600 Recommendation:$17,600 IXes~ipli~ The newly created Alliance for Community Care’s (previously Miramonte Mental Health Services, Avenues to_Mental Health and Community Companions) mission is to help individuals achieve mental and emotional health, discover and realize their potential, and fully participate in life. This application requests funding for a feasibility study to assist in the determination of the future use of the organization’s site in downtown Palo Alto. The study-would assess existing conditions.and estimate the funding.necessary for rehabilitation and adaption to a multi-family or single room occupancy type of shared housing use. Alliance proposed partnering with the Palo Alto Housing Corporation’ to coordinate this effort and future rehabilitation of the property. The existing stmctttre is. a two story wood frame single family residence with eight bedrooms and three and one-half bathrooms. It is currently vacant Recommendation: Staff and the cAc recommend funding for this study so that the building which is clearly under-utilized and in need of.considerable repair can be completely assessed. It is hoped that a thorough investigation of the property’s potential will result in its preservation as affordable housing for people with disabilities. Staff has encourage this approach to assessing the overall rehabilitation needs of a potential project. 13 Environmental: Feasibility and planning studies are statutorially exempt under CEQA. 18. City of Palo Alto - Department of Planning and Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 Project: Housing Development Fund Request: Recommendation: $600,000 $543,600 I)~J~ipfiom The purpose of the Housing Development Fund is to assist in the development of a variety of housing projects that will provide affordable housing to low and very low income families, disabled, and single persons. Funds may be used for predevelopment expenses, .acquisition of land .or existing buildings, rehabilitation costs or other CDBG eligible expenses. The Housing Development Fund was created to provide funds on an ongoing basisto actively facilitate the development, rehabilitation and preservation of low income housing in Palo Alto. Housing development opportunities occur throughout the year and due to the nature of the real estate market, a quick response is frequently necessary. The City will administer the fund and work closely with nonprofit housing developers and supportive housing providers on project proposals in order to increase the supply of affordable housing in Palo Alto. The Housing Development Fund willinclude funds from severalsources .primarily CDBG, City Housing Reserve and HOME funds. Each funding source is accounted for~ .separately. Staff will return to Council for appr0valfor funding of specific projects from the Funds. The CDBG fund has a current balance of approximately $577,649, and the housing mitigation fund has an unencumbered balance of.approximately $400,000. There are no HOME funds available at this time. The addition of the recommended amount to the CDBG housing development fund would increase the balance to $1,121,249. The objective is to acquire a site of 1.0 to 2.0 acres suitable for medium density, family aparlxnents. The cost of the.land could be as high as 2 million dollars. Recommendation: Staff and the CAC recommend funding at the level above. The maximum amount of funding.possible must be added to the-CDBG fund for acquisition of land for the new construction of family rental housing described above. The City of Palo Alto Consolidated Plan and the Housing Element both emphasize the great need for affordable housing for low and very low income households in Palo Alto. 14 Environmental: Prior to the developmem of specific applications, complete environmental records, satisfying HUD and CEQA requirements, will be prepared. 15 ATTACHMENT C CITY OF PALO ALTO SUMMARY OF CDBG FUNDING PI~IORITIES FISCAL YEAR 1997/98 *Note: Priorities are shown in order of importance I.AFFORDABLE HOUSING (Goal: 60% of Budget) A. NEW CONSTRUCTION. CONVERSION & ADDITION OF NEW UNITS Permanent housing for families with children Other permanent housing !ncluding 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 EVIPROVEMENTS (Goal: 5% of Budget) Rehabilitation of existing facilities for use as shelters for the homeless or other special needs groups 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 ADMINISTRATION (Goal: 20% of Budget) 1.~air housing education, information, referral, advocacy, counseling and complaint resolution 2.CDBG program administration and planning costs. ATTACHMENT D STATUS OF CURRENT CDBG PROJECTS I. Projects completed in 1996/97: 1992/93 1993/94 1994/95 1994/95 Casa Say Shelter Rehabilitation Phase I Stevenson House - Fire Alarm Stevenson House - Accessibility Casa Say Shelter Rehabilitation Phase II II. Projects currently in process (expected completion by 6-30-97): 1993/94 1994/95 1994/95 1995/96 1995/96 Lytton Gardens - Accessibility. EHC - Reception Center Rinconada Park accessibility Ventura Community Center CAR .Swim Center addition III. Projects approved, not yet begun: 1995/96 1995/96 1996/97 1996/97 Pacific Art League -.Accessibility YWCA - Women’s Loan Program PAHC - Arastradero Park Rehab PAHC - Emerson Rehab $10,000 30,000 21,000 5,000 56,618 50,000 45,000 183,000 35,000 23,400 35,000 286,380 69,300