HomeMy WebLinkAbout1997-05-12 City Council (13)TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: Planning and
Community Environment
6
DATE:MAY 12, 1997 CMR:238:97
SUBJECT:PUBLIC HEARING: FISCAL YEAR 1997/98 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
ALLOCATIONS AND ANNUAL ACTION PLAN
The purpose of the May 12~ 1997 public heating is for the City Council to review and act on
the recommendations of the Finance Committee regarding the Fiscal Year 1996/97
Community Development Block Grant (CDBG) funding allocations, Council’s adoption of
the attached Resolution will authorize staff to submit the appropriate certifications and
application, contained within the attached Annual Action Plan, to the Federal Department of
Housing and Urban Development (HUD) for funding for the projects proposed under the
Resolution. The deadline for submission of the FY 1997/98 Annual Action Plan to HUD is
May 15, 1997. -
RECOMMENDATIONS
Staff recommends that the City Council:
Authorize and directstaff to carry out any fiLrther required environmental assessments
and certifications for each project under both the California Environmental Quality
Act (CEQA) and the National Environmental Policy Act OqEPA), prior to the
commitment of any funds for each project.
Adopt the attached resolution and the Annual Action Plan establishing funding-
allocations and a funding contingency plan for the 1997/98 CDBG Program.
CMR:238:97 .Page 1 of 4 ~
Authorize and direct the City Manager, or her designee, to execute and submit the
1997/98 CDBG application and other documentation necessary to file the application
with HUD, 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.
EXECUTIVE SUMMARY
The.required 30:day public review period for the 1997/98 Annual Action Plan began on
April 1, 1997 and ended on April 30, 1997. No public comments were. received. The
attached staff report (CMR:202:97) provides background information on the 1997/98 CDBG
process, including a brief description of the funding proposals, the methodology and criteria
for review, and the staffand Citizen Advisory Committee (CAC) funding recommendations.
However, the staff funding recommendation changed with regard to predevelopment
expenses for a new family housing site in .response to information received regarding the
potential sale of the Sheridan Apartment project at 360 Sheridan Avenue, in Palo Alto. The
attachedApril 15, 1997 memo summarizes the information received, and the revised staff
recommendation. The CAC met on April 30, 1997 to discuss this change, and voted to
support the staff recommendation to pursue the potential purchase of the Sheridan
Apmments: The CAC endorses the five-month assessment period and the return to Council
by September 15, 1997, with a status report on the sale feasibility and progress.
Following. public testimony at the April 15, 1997 Finance Committee meeting, the
Committee reviewed and discussed the various proposals. The Finance Committee voted to
recommend to Council that the following changes be made to the staff and CAC
recommendations reflected in CMR:202:97:
1)Increase by $11,000 the funding to the Senior Coordinating Council for Senior Home
Repair Program subsidies, and decrease the amount in the Housing Development
Fund by a like amount. The Finance Committee also recommended that consideration
be given to combining the subsidy money for the Senior Home. Repair Program with
¯ the Senior. Coordinating Council’s application for General Fund dollars in the 1998/99
fiscal year, prior to the start of the next two-year budget cycle.
Decrease by $50,000 the funding .recommendation in favor of Mid-Peninsula Housing
Coalition for predevelopment funds for a new family housing site, and increase the
amount in the Housing Development Fund by $50,000. This change is recommended
CMR:238:97 Page 2 of 4 "
inorder to accommodate the consideration of the Sheridan acquisition as the highest
priority for expenditure with CDBG housing development funds.
The City Council may choose to amend or modify the amounts or funding recipients of the
recommendations presented by the Finance Committee.
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 allocation in 1997/98 to
$1,040,000. Funding for the CDBG Program, however, has decreased by five percent .over
the past three years without considering the effects of inflation. This trend can be expected
to continue.
ENVIRONMENTAL ASSESSMENT
For purposes of the California Environmental Quality Act.(CEQA), budgeting is not a
project. In the project descriptions in .Attachment B to attached CMR:202:9.7, the
environmental assessment for each project has been identified. The HUD environmental
regulatiord for the CDBG Program are contained in 24 CFR Part 58, "Environmental Review
Procedures for Title. I Community Development Block Grant Programs." The regulations
require CDBG grant recipients to assume the responsibility for environmental review and
decision making under the National Environmental Policy Act (NEPA).-
¯ STEPS FOLLOWING APPROVAL.
The 1997/98 Action Plan, containing .the CDBG appiication, funding allocations, and
requisite certifications, will be submitted to HUD by theMay 15, 1997 deadline.
If a nonprofit housing developer is successful in negotiating a purchase agreement with the
sellers of the Sheridan and a preliminary analysis of financing options indicates that an
acquisition is feasible, staffwill return to Council with a predevelopment agreement with a
developer by June 1997 that will allow for feasibility assessment by mid-September 1997.
If it is determined that the Sheridan acquisition is not viable, then staffwill return tO Council
with a recommendation to fund Mid-Peninsula Houshag Coalition’s application for $50,000
to pursue a site for a nev family rental housing project t~om the Housing Development Fund.
CMR:238:97 Page 3 of 4
ATTACHMENTS
Attachment A - Revised Funding Chart
Resolution
April 15, 1997.Memo.to the Finance Committee
CMR:202:97
1997/98 Annual Action Plan
PREPARED BY: Suzanne Bayley
DEPARTMENT HEAD REVIEW: : ~j ~. J~./c.~y
KENNETH R. SCHREIBER
Director of Planning and
Community Environment
CITY MANAGER APPROVAL:
t212:Citizens Advisory Committee .....
Applicant Agencies ~
CMR:238:97 Page 4 of 4 i 1
ATTACHMENT A
1997/98 CDBG FUNDING REQUESTS AND RECOMMENDATIONS
AGENCY/PROJECT TITLE
Public Services
5.
6.
7.
Catholic Charities
Emergency Homing Consortium
Palo Alto Housing Corporation
Urban Ministry
Outreach & Escort
Commtmity Services Agency
Senior Adults Legal Assistance
Sub-total
AGENCY
$ 14,070
11,200
100,400
75,000
8,000
17,000
8000
$233,670
CAC & STAFF
RECOMMEND.
$13,400
11,000
35,000
66,900
.6,000
-0-
-0-
$132,300
$13,400
11,000
35,000
66,900
6,000
-0-
-o-
$132,300
Program Administration "
8. MidPeninsula.Citizens for FalrHsng.
9. City of Palo Alto CDBG Admin.
Sub-total
$ 18,260
$148,260
$ 17,500
$147,500
$ 17,500
$147,500
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
$ 50,000
11,000
33,000
50,000
111,382
10,000
227,560
136,728
1.7,600
$1,247,270
$1,629,200
$ 50,000
-0-
50,000
48,000
-0-
51,000
17,600
$760,200
$1,040,000
$50,000
11,000
-0-
-0-
48,000
-0-
51,000
-0-
17,600
$760,200
$1,040,000
1997/98 Funds Available:
FY 1997/98 CDBG Allocation
1997/98 Estimated Program Income
Reallocation of previously allocated funds
Prior unprogrammed Program Income
g_!!b~c Service Cap Calculation:
FY 1997/98 Allocation
FY 1996/97 Program Income (est.)
---dmini tr_ "on ~-__ Calculation:
FY 1997/98 Allocation
FY 1.997/98 Program Income (est.)
$782,000
70,000
35,500
1.52A0_0
$1,040,000
$782,000
$882,000
$782,000
$852,000
x15%= $132,300
X20%= $170,400
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALOALTO
APPROVING THE USE OF COMMUNITY DEVELOPMENT BLOCK
GRANT FUNDS FOR FISCAL YEAR 1997-1998
WHEREAS, on May I, 1995, the Palo Alto City- Council
approved and adopted a document entitled "Consolidated Plan", which
identified and established the Palo Alto housing and non-housing
community development needs, objectives, and priorities for the
period of July i, 1995 to June 30, 2000; and
WHEREAS, the 1997-98 Action Plan, the annual update to the
Consolidated Plan, was subjected to public review and commentary
during the period of April i, 1997 through April 30, 1997; and
WHEREAS, the potential uses of Community Development.Block
Grant ("CDBG") funds were evaluated in light of the needs and
objectives identified in the. Consolidated Plan and reflected in the
recommendations and comments of the Citizens Advisory Committee and
other interested citizens; and
WHEREAS, under the CDBG program, the highest priority is
given to activities which will benefit persons with low and
moderate incomes; and
WHEREAS, the City Council and the Finance Committee of the
City Council have held publicly noticed public hearings on the
proposed uses of the CDBG funds for fiscal year 1997-98; and
-WHEREAS, the fiscal year 1997-98 CDBG funds allocated to
the City are proposed to implement the. following programs;
NOW, THEREFORE, the Council of the City of Palo~Altodoes
RESOLVE as follows:
SECTION1. The uses of CDBG funds for fiscal year 1997-.98
are hereby approved and authorized for the following programs:
Catholic Charities of Santa Clara County.
Long Term Care Ombudsman Program.
Complaint investigation and advocacy
services to Palo Alto’s elderly residents
living in nursing and residential care
facilities. City-wide.$ 13,400
Emergency Housing Consortium. EHC
provides temporary shelter and supportive
services for homeless individuals and
families. County-wide.ii,000
970501bde D071188
o Pal. Alto Housing Corporation. Project
is to provide information and referral
services for affordable housing options,
a supportive counseling program for the
Barker Hotel, and an update of the
affordable housing directory. City-wide.35,000
Urban Ministry of Pal. Alto. Provision
of basicsupport services to homeless
individuals including the provision of
emergency food and a rotating church
shelter program. City-wide.66,900
So Outreach and Escort, Inc. Transportation
subsidies for eligible low income disabled
Pal. Alto residents registered through the
County of Santa Clara’s Special Needs
Transportation program.. City-wide.6,000
Mid-Peninsula citizens for Fair Housing.
MCFH provides services to promote fair
housing, including complaint investigation,
counseling, advocacy and education.
City-wide. ~17,500
7.City of Pal. Alto. Department of Planning
and Community Environment. Overall CDBG
..... grant .administration and capital improve-
.......... ment project delivery costs associated
...... with federal funding. City-wide.
Senior Coordinating Council. SCC operates
the Home Repair Program.~ This project
provides subsidies for minor home repairs
for lower income elderly homeowners.
City’wide. ~ ~_
180,000
II,000
o Pal. Alto Senior Housing Project, Inc.
(Adlai E. Stevenson House). Project is
to re-roof Building B of the 120-unit
residential facility which provides
affordable housing to senior adults.
455 E. Charleston Road, Pal. Alto.48,000
I0.Veterans Works.p, Inc./Next Step Center.
Project is to provide funding for Veterans
Workshop to acquire a 100% interest in the
single family home which is in use as a shared
home for seven low income, disabled veterans.
Funds will be used to.buy-out the interest of
Veterans Task Force, Inc. in order to retain
the house as shared affordable housing.
442 MargaritaAvenue, PaloAlto~
2
51,000
97050 lb~ 0071188
II.Alliance for Community Care (formerly
Miramonte Mental Health). Project is
to provide funding to conduct a feasi-
bility study to ascertain the future
use of a large single family residence
in downtown Palo Alto. The study would
assess existing conditions and estimate
the funding necessary for rehabilitation
and adoption to a multi-family or single
room occupancy type of shared housing use.
650 Waverley, Palo Alto.17,600
12.~- City of Palo Alto. New Housing Develop-
ment Account. Funding for projects
which would preserve or increase the
number of housing units in the City
affordable to very low and low income
.... .~ persons. City-wide.
TOTAL:$i,040,000
SE T__~’. The total amount set forth under Section 1 of
this resolution hereby represents the proposed allocation of
$78~,000 in CDBG funds, from the United States Department of
Housing and Urban Development ("HUD") for fiscal year 1997-98,
$70,000~in anticipated Program income for fiscal year 1997-98,
$152,500 inunallocated program income from prior program years,
and $35,500~in-~reallocated funds.
.. ~T~Q~I_~. 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.
~. The City staff is hereby authorized to submit
the 1997/98 annual action plan update and appropriate application
forms, to HUD for the fiscal ygar ~97-98 CDBG funds, and such money
shall be-~pent as set forth in this resolution. The Mayor, City
Manager and any ~other designated City staff or officials are
hereby authorized to executesuch application forms and any other
necessary documents to secure these funds.
SECTION 5. The City Council hereby finds that the fiscal
year 1997-98 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 assessmentsand certificates
that may be required,~ under CEQA and the National Environmental
970501b~ 0071188
3
Policy Act (NEPA) for each project under the fiscal year 1997-98
CDBG-program prior to the release of funds for any such project.
INTRODUCED AND PASSED:
AYES :
NOES:
ABSTENTIONS :
ABSENT:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
APPROVED AS TO CONTENT:
CDBG Coordinator
APPROVED:
Mayor
City Manager
Director of Planning and
Community Environment
Acting Director of
Administrative Services
4
CITY OF PALO ALTO
Memorandum
April 15, 1997
TO:City Council Members
Attention:Finance Committee
SUBJECT:1997/98 CDBG Funding Recommendations
Yesterday, Planning Division staff was informed that the owners Of the 57-unit Sheridan
Apartment project plan to sell. The City holds a fight of first refusal to purch~e.the property
under deed restrictions recorded when the City sold the site for low income housing in 1978.
Sam Webster, General Partner, approached the Palo Alto Housing Corporation on March 31,
1997, regarding a potential sale, _and PAHC Executive Director, Marlene Prendergast,
provided the attached background information to her Board of Directors.
Staff believes that a6quiring this property in order to preserve the 57 elderly/handicapped
units should be the top priority for the CDBG housing development fund. In light of this new
information; staff believes the 1997/98 CDBG reeomrnendations should be amended to
reflect the purchase of the Sheridan Apartment project.
The amended staffrecommendafion would be to postpone consideration of the selection of
a developer for a new family rental housing project until there has been sufficient time to
properly consider whether the acquisition of the Sheridan Apartments is a viable option. If
the Sheridan could be acquired, all of the available CDBG funds (new and earry-over)would
be needed to support the acquisition, There are not enough funds available to pursue both
projects simultaneously.
Staffproposes a five month assessment period beginning immediately in order to.pursue the
acquisition of the Sheridan Apartments. By mid-September of 1997, staff would return to
Council with a recommendation to either continue pursuit of the Sheridan purchase, or to
select a developer for the proposed family project.
The CDBG Citizen’s Advisory Committee was notified by telephone of the proposed change
late yesterday afternoon and last evening. They have not.had th~ opportunity to discuss and
evaluate the changes as a group. Although most CAC members are supportive of the
proposed changes in concept, they do not feel they have had sufficient time or information
to fully endorse the amended staffrecommendation.
Respectfully submitted,-
KENNETH R. SCHREIBER
Director of Planning and
Community Environment
Attachment
/UNE FLEMING
City Manager
Citizen’s Advisory Committee
Applicant Agencies
PALO ALTO HOUSING CORPORATION
Memorandum
DATE:
TO:
FROM:
RE:
CC:
Apd~ 8; 1997.
Board of Directors
Marlene H. Prendergast, Executive Director~"J
Sheridan Apartments, 360 Sheridan Avenue, Palo Alto, California
Cathy Siegel, City of. Palo Alto
I talked with Sam Webster on March 31, 1997 regarding the Sheridan Apartments. He said that he and
Kermit Kn0pf were intending ~o sell the Apartments. He has sent out letters to the limited partners asking
for their opinions, anticipating the improvement of their positions with a tax-free exchange. He said he
wasalerting the Pale Alto Housing Corporation first since we had been involved in a transaction
concerning the property before. I said the Housing Corporation definitely wanted to be in the loop and that
I would investigate the baekgroand, the process and the availability of financing for such an acquisition.
In very general terms, he mentioned a purchase p~ce of $5,00ff,000, with an existing assumable mortgage
.of $1,374,000. We agreed to talk again when we had more information.
We need to determine a general posture and plan of action.
Background
-The-Property.
The propertyis a 57-unit, federally subsidized apartment development primarily for persons 62
years of age and older. It is a three story building served by an elevator and is convenient to shopping and
transportation. Each of the 57 units contains one bedroom, a combination living/dining room, a kitchen,
a bathroom, and either a balcony or a patio. Six of the units on the first floor accommodate wheel chairs.
The units are approximately 550 square feet. They are carpeted and include drapes, refrigerators, stoves
and disposais. -
The building includes a multipurpose recreation room adjacent to a garden, a laun&y room on
each floor, a crafts room, and manager’s office. The property is.designed for independent livinff, there is
.no meal program or housekeeping services.
The property is owned by a limited parmership, The Sheridan Associates, of which Kerm Knopf
and Sam Webster are the general partners. The original financing on the property is a HUD-insured 30
years fixed rate mortgage at 7.5% in the original amount of $1.625,200. .
The Original Transaction
In 1975, the City of Pale Alto acquired the "Power Parcels" at Grant and Sheridan. In 1977, the
City entered into an Agreement of Sale for the property with BRAMCO D~elopment.. The Agreement
required that the land be developed with aeomplex to be used solely for low- and moderate-income
residential rental purposes for a period of 40 years with the first 20 years as housing for the elderly under
the Section 8 Federal Assistance Program. After the 20th year, ff there are no rental subsidy programs in
existence, or ff the then owner has made a good faith application for rental subsidies and been denied by
the appropriate agencies, the owner is free to use the site for any lawful residential purpose. However, the
rents charged thereafter may not be higher than necessary tok~p the project financially self-supporting
and tO allow the owner a reasonable rate of return. (The,Council minutes ,surrotmding this discussion
were very interesting.) .
The Agreement also includes an-Option to Repurchase the property for the City. Specifically,
before the owner sells the property to any given buyer, the owner must offer the property to the City on
equivalent terms and conditions. The City has 30 days from receipt of written notice by the owner to
accept the offer. The City’s.right continues for the 40 year period or until actual repurchase of the
property by a new buyer or the City.or des.ignee.
In 1978, the City. executed a grant deed to The Sbeddan Associates (BRAMCO’s~successor in
interest), also subject to the above-described restrictions and conditions. The Sheridan Apartments were
completed in 1979.
The 1988-1989 Events
The Pale Alto Housing Corporation and City staff were very involved in the potential acquisition
of this property for many months, culminating in the eventual decision in September 1990 by the Council,
from a recommendation of PAHC, that the Option to Repurchase not be exercised by the City.
The PAHC recommendation was based on the understandingthat 1) whoever would Own the
property would be required to continue to rent to low-income elderly until expiration .of the Section
subsidy in 1999, and 2) that the City could monitor theowner:s "best efforts" to continue Section 8
assistance or other subsidies to prevent displacement of tenants, and 3) that,, ff the then potential buyer
under contract did not consummate the transaetior., the City’s one right to repurchase the property would
remain in effect. Thus, without expenditure of limited resources that could be utilized for other housing,
the low-income eha~racter of the Sheridan Apartments could be preserved.
In this ~rocess, and l~fore reaching its recommendation, PAHC entered into a pure ~hase contract,
engaged California Housing Partnership Corporation (then Helen Dunlop) to armly’z~ the potential
financing scenarios, applied for and received a reservation of lak credits through the John Stewart
Company (Mike Smith-Helmet), applied for a conventional loan, and kept The Sheridan Associates on the
hook in selling the property for a very long time. In that process, tbe.prop¢~ ~:r~y was appraised at
$3,850,000, as is with HUD restrictions. .... - " - ~:- ~ .... ~ -
Current Issues
The issues that arise, in the context of the question whether PAHC is interested in acquisition of
The Sheridan Apartments at this time seem to be the same as in 1990, but with some changes in context.
What financing options are currently available7 What City money is available? Tax credits (at 4%)
are still theoretically available, under the same competitive rules as available for new development.
The scenarios explored by CHPC were tax exempt bond financing and conventional mortgage witlran
Affordable Housing Program(AHP) granl. There is currently ~$I million in City CDBG monies, but
that is now the subject of the RFP for a family housing project.-- ¯ :_ .....
What protections remain in the deed restrictions? The first twenty years of the deed restrictions are
now about up. The next twenty years require only a good faith effort to continue SeCtion 8 assistance,
a program that is in political jeopardy at this time. The City’s Option to Repurchase still exists but
would be extinguished in the case of a purchase by a new private buyer, who without a suecessfial
Section 8 application would be free to raise rents to make.the project "self supporting and allow a
reasonable rate of return".
City of Palo Alto
City. Manager’s Summary Report
TO:HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: Planning and
Community Environment
DATE:April 15, 1997 CMR:202:97
SUBJECT:1997198 COMMUNITY DEVELOPMENT BLOCK GRANT
(CDBG) FUNDING ALLOCATIONS
This report transmits the recommendations of City staff and the CDBG Citizens Advisory
Committee (CAC) for the expendit~.e of Community Development Block Grant funds for
the 1997/98fiscal year. The Finance Committee is requested to assess the ~ecommendations
and forward on to the full Council their recommendations for CDBG expenditures.
Staff’recommends that the Finance Committee recommendto 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.
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 H UD
application and Action Plan and any other necessary documents concerning the
application, and to otherwise bind the C~ty with respect to the application.
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
by five percent over the past three years without considering the effects of inflation. This
trend can be expected to continue.
EXECUTIVE SUlVlMARY
$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 Aand 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 inresponse 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 onthe 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 alloeatedbut unspent funds bring the total available for allo’eation in 1997/98 to
$1,040,000. - " - - ....
ENVIRONMENTAL ASSESSMENT
For purposes of the California Environmental Quality Act (CEQA),. budgeting is not a "
project. ---- _
PREPARED BY: Suzanne Bayley ¯
DEPARTMENT HEAD REVIEW:
KENNETH R. SCHREIBER
Director of Planning and
Community Environment
CITY MANAGER APPROVAL:(~_ _FLYING ./’ ]
CMR:202:97 Page 2 of 9
City of Pale Alto
City Manager’s Report
1997198 COMMUNrrY DEVELOPMENT BLOCK GRAIVI’
(CDBG) FUNDING ALLOCATIONS
This report transmits the recommendatiom of City staff and the CDBG Citi~ns Advisory
Committee (CAC) for the expenditure of Community Development Block Grant (CDBG)
funds for the 1997/98 fiscal year. The Finance Committee is requested to assess the
recommendations and forward on to. the. full. Council their recommendations for CDBG.
expenditures.
Staffrecommends that theFinance Committee recommend to the City Council approval of
the following:
The funding allocations, as recommended by ~taff and the Citizens Advisory
Committee in Attachments A and B, be included in the 1997/98 CDBG Action Plan.
o Staffbe authorized to submit to the Department of Housing and Urban DeveloPment
(HUD), by the May 15, 1997 deadline, the proposed Action Plan for the expenditure
of 1997/98 CDBG program funds.
The City Manager, on behalf of the City, be authorized to execute the HUD
application and Action Plan and any other necessary documents concerning the
- application, and to otherwise bind the City with respect to the application.
The City of Palo Alto receives funds annually from the U.S. Department of Homing and
Urban Development (HUD) as an entitlement City under the CDBG Program, authorized by
Title I of the Housing and Community Development Act of 1974, as amended. The primary ¯
.objective of the Act is "the development of viable urban communities by providing decent
housing and a suitable living environment, and expanding economic opportuniffe$,
principally for peraons of low and moderate income."
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)
2)
3)
Activities which are of benefit to low and very low income persons;
Activities which aid in the prevention or elimination of slums or blight; or
Activities which meet other community development needs having a particular
urgency or posing a serous 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,
thelow 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
andeommunity 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 1997/98Action Plan at a public hearing scheduled for May 12, 1997.
HUD regulations provide 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.
Page 4 of 9
Comrnunity 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 199~6/97 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) .... ~
Proffam 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 commumty’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
disquali~ them from participation on the Committee. Therefore, the Committee this year
consisted of eight individuals, rather than a possible nine.
To provide for e0ordination between the Human Service 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 Gareia, Jonathan Glendinning, Wynn
Haus~er (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 disenssed 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 notice announcing 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.
_P_r_oposal 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
60%$ 760,200 73% _
5%-0--0-"
15%¯ 132,300 13%
100%$1,040,000 100%
Other factors considered in the staff and CAC recommendations were: a) the urgeney of the
program orproject; b) the effect of a delay (in funding) on the project or services provided;
e) 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
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 performane~ 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.
~ 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.
Family HousingSite: 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 developmeiat 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 funds 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
~ 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 inthe 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 from the $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
PAHC
Sale of PCC Home
Excess Program Income received in prior years
. Realloeation of previously allocated, but unspent funds
$782,000
50,000
20,000
76,500
76,000
$1,040,000
Page 8 of 9
ENVIRONMENTAL ASSESSMENT
For purposes of the California Environmental Quality Act (CEQA), budgeting is not a
proj~t. 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, staff will 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.
~TEPS 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.
Attachment A:
Attachment B:
Attachment C:
Attachment D:
Chart of 1997/98 funding applications and recommendations
Narrative r~port 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
1996/97 1997/98
13,400 14,070
10,700 11,200
58,000 75,000
6,000 8,000
43-17,000
43-8~000
233,670
19,600 18,260
148,260
Housing Production/Housing Rehabilitation
9. City of Palo Alto -Project Delivery 50,000
10. Senior, H~om~e_Repair Program t-1,000
11. PAHC ~ predev.Family Housing N/A
12 MPHC - Predev Family Housing N/A
13. Stevenson Hous~: Roof ........ ~ - ~- N/A
14. Emergency Housing - Shelter Rehab ....-=~ N/A
15. Next Step- Veterans Group Home . ~ - NiA ~= "
16. Community Housing - Fire Alarm N/A
17. ALLIANCE - Group Home Study N/A
18. Housing Development Fund 363,832
Sub-total
..Toad
5 o0o
_tl,000
-33,000
5 o0o
111,382
10,000
227,560
:~~13~728
17,600
1,247,270
.$L62 ,2o0
CAC & STAFF
-RECOMMEND.
13,400
11,000
~35,000
66,900
6,000
-0-
132,300
17,500
130:000
147,500
50,000
50,000
48,000
4)-
51,000
17,600
760,200
$1,040,000
1997198 Funds Available:
FY 1997198 CDBG Allocation
1997/98 Estimated Program Income
Reallocation of previously allocated funds
Prior unprogrammed Program Income
PnblicService Cap Calculation:
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
782,000
882,000 x 15% = $t32,300
782,000
¯852,000x 20% = $170,400
ATTACHMENT B
STAFF AND CAC FUNDING RECOMMENDATIONS
FOR 1997/98CDBG FUNDS
PIIBLIC SERVICE APPLICA~
The total amount of funding available_for_applications.in this category is limited to a
maximum of $132,300by the 15 percent public service cap. The funding amounts
recommended by staff and the CACtotal $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.
L Catholic Charities
2625 Zanker Rd. Suite 200
San Jose, CA 95134-2107
Project: Long Term Care Ombudsman Program
Request:$14,070
Current Funding:$13,400
Recommendation:$13,400
Ikscziptitm: 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 rights, physical and sexual abuse,
quality of care, fiduciary abuse, neg!ect, diet, theft, incorrect placement, eviction, and
other concerns.
Recomm~tiom Current contract objectives are being met or exceeded. Services are
necessary and not duplicated by.any other agency. Funding .is recommended to
continue at the current level.
F_.ny_imnm~k Not a Project under CEQA
2. Emergency Housing Con~rtimn
P. O. Box 2346
San Jose, CA 95109
Project:¯Shelter and Services for the Homeless
Request:~’$11,200
Ct~ent Funding:$10,900
Recommendation:.~$11,000
~ Agency provides emergency.shelter and supportive services to homeless
men, women, and families .with children throughout Santa Clara .County. Emergency
Housing Consortimn operates the Family Living Center in Santa Clara, the winter
shelters at the National Guard Armoriesin 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,
Not a Project under CEQA.
3. Palo Alto Homing Corporation (PAHC)
540 CowperStreet Suite G~
Palo Alto, CA 94301
Projects: a) Affordable Homing 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:
Recommendation:
$100,400
$29,300
$35,000
EZeAm:ipfiom 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 refe~al, housing directory and Barker Hotel
2
Counseling are. being provided in the current year. The new projects being proposed
provide service enriched housing .to tenants ofsubsidized housing in Pale 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 Pale 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 Fundin~1997198 Request 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 offorty five percent in funding for the information
and referral program based on an increase in the number of calls received and services
provided infight ofthe current rental housing crisis. Staff and the CAC are very
supportive of the Barker Hotel counseling project and believe the servicesto be an
essential component of the actual homing. However, the actual cost of providing the
counseling for the first six months of 1996197, indicates that, annualized, the program
should cost approximately ~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 colla~rating with existing services to
provide at least a portionof the services envisioned.
Environmental: 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:
On’rent Funding:
Recommendation:
$75,000
$58,000
~ 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: Oarrent contratt 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 toincreased accountability. The
agency has made notable improvements in administrative and financial systems as
evidenced by the information available in their latest audited financial statement.
Continued improvements to these systems is strongly encouraged.. Although there has
been much progress-in the organization sincelast 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.
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
Dmm:iptimu 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.
Eavironmentah Not a project under CEQA.
6. Community Services Agency of Mountain View
204 Stierlin Road
Mountain View, CA 94043
Project:Community Consortium Project: Alta Vista High School Counseling
Request:17,000
Current Funding --O-
Recommendation:
Dr, smfilXiom The Community* Consortium Project is seeking funding to provide for.the .
needs of at-risk smdents.at.Alta Vista alternative High School in PaloAlto. The
application describes a comorthmt 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..Theprogramseeks to.sere 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 counselingwith the student and the family, and to support and
encourage academic progress.
Recommendation: Staff and the CAC are very supportive of the goal, s of this program
and the at-risk adolescent population itserves. Funding is not recommended, however,
due to the limited budget and the fact that housing related activities remain the highest
priority in the Consolidated Plan for the expenditure of the CDBG funds.
Emdrfammn~: 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 -O-
Recommendation:
D~e.sr.dp/~am 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 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 presentatiom 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 priofitized in light of all the services
available .for seniors.
En_vJronmentak Not a project under CEQA.
ADMINISTRATION
6
The total amount of funding available for applications in this category, is limited to a
maximum of $170,400 due to.the 20.percem cap on administrative expenses. The
funding amounts recommended by staff and the CAC total $147,500.
8: Mid-Peninsula Citizens for Fair Housing (MCFH)
457 Kingsley Avenue
Palo Alto, CA 94301
Project: Fair Housing Services
Request:
Current Funding:
Recommendation:
$18,260
$19,600
$17,500
l)~r.zipfio~ Agency provides investigation, counseling and legal referral for victims
of housing discrimination as well as community outreach and education regarding
housing fights. 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 contractobjectives was $16,600.with an additional $3,000 for
special outreach projects relating todiscrimination agaJmt families with children.~
MCFHis 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:
Current 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 cap2 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 regulatiom and technology, and on preparing the
required plans and reports. A newly required on-line accounting and reporting system
(IDIS) 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.
Not a project underCEQA.
HOUSING PRODUCTION/HOUSING REHABILITATION
10. Senior Coordinating Council
450 Bryant Street
Palo Alto, CA 94301
Project:Senior Home Repair Program
Request:$11,000
Cturrent Funding:$11,000
Recommendation:$ -0-
12esc, fil~iom This program provides subsidized home repair services to income eligible
.Palo Alto homeowners who are 60 years of age or older. The program embles seniors
8
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: Current contract objectives are on target. Although very supportive
of the program itself, staff and CACdo not recommend fimding 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 Housing Corporation (PAtiO
540 Cowper Street, Suite 201
Palo Alto, CA 94301
¯ Project: Predevelopment New Family Homing
Request:
Recommendation:
$33,000
$ -0- (See discussion below)
12. Mid-Peninsula Housing 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 and 12:
D.~xtiptiom The applieations from Palo Alto Housing Corporation and Mid-Peninsula
Housing Coalition (MPHC) were received in response tothe 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 ftmdi~g of the proposal by MPHC.
Recommendation: Both agencies were deemed to have the necessary ability and
capacity ~ 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, thePAHC 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, (CHDO) 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 dercelopers 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 House)
455 E.~ Charleston
Palo Alto, CA 94303
Project: Roof’mg of Buildings A and B in Senior Residential Facility
Request:
l0
~ Stevenson House is a senior residential facility providing 109 units of
affordable housing for approximately 135 indep~denfly fimctioning, 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_,mtJr_onme~ 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:-0-
D_~,riptiom This application requests an additional allocation of CDBG funds for the
regional emergency shelter aeqnired 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 funds were 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.
-5. ~_-: i" ,. Staff and the CAC do not recommend additional funding for this
project. The. amount of the original contribution isappropriatek 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 BI
Environment Assessment was completed on January25, 1996 with afinding 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, Palo Alto
Request:
Reconnnendation:
$227,560
51,000
De~xipfi~m 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 TaskForce 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. Veterans 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.
~ Purchase of an existing 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
Request:$136,728
Recommendation:
Dy.sf, fipti~m Community Housing,-Inc. owns and manages Lytton Gardens I and II,
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. White 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
Iks~tipfiam 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 structure is.a two story wood frame single family residence with eight
bed~,ooms andthree and one,half bathrooms. It is currently vacant
Rg~3mmendation: Staff and the cAc recommend funding for this study so that the
building which is clearly under-utilized and in needofconsiderable repair can be
completely assessed. It is hoped that a thoroughiinvestigation 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 statutofially 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:$600,000
Recommendation:$543,600
12e, scdpliom 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 ongoingbasisto actively facilitate the development, rehabilitation
and preservation of low income housing in Pa_lo Alto.. Housing development
opportunities occur throughout the year and. due to the nature of the real ~state 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 will include funds from several .. sourees primarily .CDBG,
City Housing Reserve and HOME funds. Each funding source is aecotmted for
:separately. Staff will retumto Council for approval for 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 unenetmabered 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
apartments. 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 mustbe added.to the-CDBG fired for acquisition
of land for the new construction of family rental housing described above. The City of
Palo Alto Consolidated Plan and the Housing Elementboth emphasize the great need
for affordable housing for low and very low income households in Palo Alto.
14
Environmental: Prior to the development of specific applications, complete
environmental records, satisfying HUD and CEQA requirements, will be prepared.
15
ATTACHMENT
CITY OF PALO ALTO
SUMMARY OF CDBG FUNDING PI~IORITIES
FISCAL YEAR 1997/98
C
*Note:Priorities are shown in order of importance
AFFORDABLE HOUSING (Goal: 60% of Budget)
A. NEW CONSTRUCTION~ CONVERSION & ADDITION OF NEW UNITS
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 renta! 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)
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
ADM]NISTRATION (Goal: 20% of Budget)
t 1.Fair 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):
III.
1993/94
1994/95
1994/95
1995/96
1995/96
Lytton Gardens - Accessibility
EHC - Reception Center
Rineonada Park accessibility
Ventura Community Center
CAR.Swim Center addition "
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
This action plan will be revised
after City Council action on
May 12, 1997.
CITY OF PALO ALTO
BOuslng and Community Development
1997/98 DRAFT ACTION PLAN
AnnualUpdate of the City’s Consoli,dated Plan for the Period
July 1, 1995 to June 30, 2000
Public Review Period: APril 1,. 1997 April 30, 1997
Prepared by Departmem of Planning & Community Environment
250 Hamilton Avenue
Pale Alto, California 94301
Ken Schreiber, Director
For Information, Contact: Suzanne Bayley
Planning Division, City of Pale Alto (415) 329-2428
CITY OF PALO ALTO ¯
-FISCAL YEAR 1997198 DRAYT ACTION PLAN
ANNUAL UPDATE TO THE CITY’S CONSOLIDATED PLAN
FOR THE PERIOD JULY 1, 1995 TO JUNE 30, 2000
This Action Plan presents the activities which the City of Pale Alto anticipates undertaking in the
1997/98 fiscal year with funds received through the Community Development. Block-Grant
(CDBG) Program.:-~-These activities are intended to meet Pale Alto’s affordable housing and
eonimunity development needs described inthe Consolidated Plan. The Action plan also
describes the activities which the City plans to undertake to affirmatively further fair housing
choice.
Federal Resources
The amount of the City’s 1997/98 CDBG entitlement grant from the .U.S: Department of Housing
and Urban Development (HUD) is $782,000. Inaddition to the grant, it is estimated that $70,000
in Program Income will be available in 1997/98. Program Income is def’med as income directly
generated from the use of CDBG fluids.. The main sourcesof funds arefrom 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~reeeived from loan
repayments under the City’s former Housing ImprOvement Program .(HIP)-.single-family
rehabilitation program.
Additionally, $152,500 in Program Income, previously received but not allocated, is available for
programing. The amount represents actual program income received in excess of estimated
projeetious for past years, and proceeds from the sale of the Peninsula Children.Center’s group
home at 3838 La Selva, Pale Alto. $35,500 is available for reallocation from previously allocated
activities which were not used. ,
The total, estimated 1997/98 CDBG funds are as follows:
FY 1997/98 cDBG Allocation
1996/97 Estimated Program Income
Program Income received in prior years
Reallocation of previously allocated~ but unspent funds
$782 000
152,500
$1,040,000
Public Hearings
The Citizen’s Advisory Committee held a public hearing on October 29, 1996 to provide an
opportunity, for .public comment on Pale Alto’s housing, human service, and community
development needs. Additionally, the Santa Clara County Homeless Collaborative-and the Pale
Alto Human Relations Commission co-sponsored a north county public forum on affordable
housing and homeless issues on January 28, 1997. Both hearings confirmed the greatest
community need to be homing affordableto lower income persons.
The City of Pale Alto Finance Committee will hold a public hearing on April 15, 1997 to review
the proposed 1997198 CDBG funding allocations, and the Pale Alto City Council will hold a
public hearing on May 12, 1997 to adopt the 1997/98 CDBG funding allocations (one-year Action
Plan). The public review period for the 1997/98Draft Action Plan is April 1, 1997 to April 30,
Federal Resources
The primary local housing resource available in the City of Pale Alto is the City’s Housing"
Reserve. The Housing Reserve has two components, the "Commercial Housing In-Lie~u Fund",
and the "Residential Housing In-Lieu Fund". The Reserve can be used for acquisition,
rehabilitation, .new construction and predevelopment of low income housing.. The commerdi~d ..............
Fundis directed towards providing additional affordable housing units for Pale Alto’s work force.
The Residential Fund can be used for any affordable housing. - ................
The "Commerciid Housing In-Lieu" fund is funded with housing mitigation.fees required from
developers ofcommerc’ml and industrial space. Thefund currentlyhas approximately $400,000-
in unencumbered.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. This fund presently has a very small balance.
Lezc_graging and Matching Requ. irernent~: The City of Pale Alto will leverage federal and private
housing ~n~ ~ ~e ~t ex~nt f~ible ~mis~m wi~ ~e ~s idemifi~. ~0 Ci~ will
¢n~age .hous~g proj~t s~ors
~ u~ ~ 1~ Ho~ ~e ~, ~ ~pr~, ~ leverage f~er~ ~d priva~ ho~ing
funds.
It is unlikely that the City will apply for state HOME funds during the 1997 funding round which
is usually announced in the fall. There are no known housing projects which would be at a
competitive stage for funding by that time. Staff would, however, evaluate the readings and
elig~ility of any projects which might emerge. An application would be submitted if there seems
to be a reasonable likelihood of an award. Local Housing Reserve funds could be used as the
required match. /
2
Additionally, the four unit off-Site BMR contribution for the development on the old Times
Tribune site has yielded a potential HOME match credit of $420,000. 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
Relmbilitalion Construction Assistance Assistance Assistance
LOCAL, PUBLIC:
Comm. Hsg In-t.ieu ~md
Residential Hsg.
In-Lieu Fund
City owned land
MCC Program
Housing Bond
Trust Fund
County Dept of
Social Services
X
X
X
X
X
X
X
X
X
X
PRIVATE RESOURCES:"
BMR Rental &X ¯X - -
Private Lenders:X X X ¯
X ’X X X XNonprofit
Developers
Private
Foundations &
Churohes
X
X
X
X
Priority Homing 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 Plarl 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 homelessness or of very. low and low income, housing for. persons
with special needs, and housing for families with children.
3
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. The request favored the
development of.new family rental housing in the range of 30 to 60 units. Funding is recommended
for out-ofpocket direct costs of assessing possible sites, negotiating with sellers and conducting
due diligence. A significant allocation to the CDBG Housing Fund is necessary in order to
acquire the site once it has been identified.
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 Developmen~ 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 separate!y. "
The actual process for initiating a project will vary depending on the particular circumstances.
Usna!!y, the 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. Af other~:
times, the City may issue a Request For Proposals, as was done in December, 1996.
The City may provide funding froma 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.~ Inmost 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. This 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
feas~ility of sites and properties for acquisition by the City or nonprofits 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 much less.
4
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
emergency needs may occur,~ and in such situations, income qualified homeowners could apply
for a rehabilitation loan in order to make necessary repairs. The intern is only to provide financial
assistance to income eligible homeowners who’s homes have serious building eode defieieneies
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 pr.edevelopment
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.
The projects which may need funding from the Housing Development Fund during FY 97-98 are:
Project Activity " -Number of Units
Feasibility, Investigations, and Site New construction Estimated
Acquisition for Family Apartments 30+ units
Housing for Developmentally Disabled at New eonstruetion About 24 units
Page Mill and Ash
Mitigation.Project for 651 Hamilton Acquisition 12 units
(Ventura Avenue Apartments)
Miscellaneous Expenses Related to.NIA NIA
Site and Project Feasibility
Emergency Rehabilitation Loans for ’Rehabilitation As needed basis
Single Family Owners
1_997198 Aetlvltles to be Undertaken
It is anticipated that the majority of theCDBG housing funds, and perhaps a portion of the City
Housing funds, will be needed to purchase a site for the new family housing project discussed
above. The 1997/98 CDBG alkr, ations inelude $543,600 to add to the existing $577,649 in the
CDBG Housing Fund. The objective is to acquire a site of 1.0 to 2.0 acres suitable for medium
5
density, family apartments. Ifa suitable site cannot be identified, it is expected that the funds will
be used to acquire and rehabilitate existing family rental units to retain as affordable family
housing. $50,000 will be provided to Mid-Peninsula Housing Coalition for predevelopment
expenses relating to the new family housing project which might include site identification,
assessment, feasibility studies, negotiation and option payments.
Homeless and Other Special Needs Activities
The City of Palo Alto provides over one million dollars annually from the General Fund in
support of human services through its Human Service Resource Allocation Process (HSRAP).
These funds, in conjunction with the CDBG public service funds, are targeted towards programs
which serve !ower income seniors, children, youth and families, persons with disabilities and those
who are homeless, or at risk of homelessness. A variety of supported programs provide mental
and physical health service, s, information and referral, subsidized child care, support for victims
of domestic violence and rape, adolescent counseling, emergency food, nutritional services,
-recreational activities, and para-transit services.
Palo Alto plans to continue to provide CDBG funding to the local provider of shelter and homeless
services, the Urban Ministry of Palo Alto, and to regional providers of shelter and services such
as Emergency Housing Consortium. The City will continue to work with Urban Ministry to
provide Opportunities for organizational capacity budding 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.
It is anticipated that Emergency Homing Consortium’s new year-round homeless Reception Center
at 2011 Little Orchard Street inSan Jose will open in fiscal year 1997198. The Reception Center
will replace shelter beds lost due tothe closure of the National Guard Armory shelter sites. The
Reception Center will provide 125 beds with the capacity to expand to 250 beds during the winter
months.
The City of Palo Alto has been an active participant in the regional collaborative effort to develop
a new 40 bed homeless shelter with coordinated services at the Veterans Administration Hospital
site in Menlo Park at 795 Willow Road. Veterans Workshop, Inc. has secured the facility through
a sharing agreement with the VA Palo Alto HealthCare System. The proposed shelter Will f’fll
the gap between short-term emergency shelters without rehabilitation services and the few
comprehensive programs. The shelter will follow the continuum of care model with the goal of
increasing levels of functioning and autonomy among residents leading to community
reintegration. The proposed project will provide assessment, referral, case management for
coordination of care, payee services, shelter housing and a resource center for men, women, and
their ehildren.
The City will continue working with the Santa Clara County Collaborative on Homing and
Homeless Issues, and other local jurisdictions,, in providing services and supporting programs
which increase the number of shelter beds, especially year round beds, and to increase housing
options and services available for homeless individuals and families. The City’s CDBG
Coordinator serves as the North Santa Clara County representative on the Steering Committee.
Homeless Prevention
Pale Alto .plans to continue~ to 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 Pale Alto area)
which provides loans and 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, and
Mayview Community Clinic’s low cost health care services.
Transition,From Homelessness to Permanent Homing
The Barker Hotel, owned and operated by the Pale 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.
The Pale Alto Housing Corporation has begun construction on 106 unit~ of new SRO housing at
753 Alma St, Pale Alto. The project, known as Alma Place, will be 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
Ta~ Credits. It is antieipated that up to six units will be available to previously homeless persons
with tenant based Section 8 assistance through the County’s Shelter Plus Care program.
CDBG funds will be utilized by Veterans Workshop in the 1997/98 fiscal year to acquire and save
an existing single family residence used as transitional housing for up to seven low income
previously homeless veterans. The project, located at 442 Margarita Avenue in Pale Alto,
provides 18 months of low cost transitional housing while participants complete job training
programs or save money towards an independent living situation. ~
CDBG funds will be provided to Alliance for Community Care (formerly Miramonte Mental
Health) for a planning study to assess existing conditions and determine the highest and best use
of the property the agency owns at 650 Waverley Street in Palo Alto. The study will determine
how best to provide supportive housing .for the agency’s clientele with mental disabilities.
7
Analysis of Impediments to Fair Homing 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 an impediment. Housing discrimination was also identified, with cases based
on familial status the most often reported. Palo Alto plans to undertake the following actions to
foster and maintain affordable housing, and to address housing discrimination during the 1997/98
fiscal -year:
Fund the local fair housing agency, Mid-Peninsula Citizens for Fair Housing (MCFH) to
,reduce discrimination in housing by:
a.Investigating 15 cases of housing discrimination
b.Conducting 25 consultations with persons who believe they have been
discriminated against
.... .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 emure that
adequate services are being provided, and that services are provided in the most cost
effective means.
Continue the City’s funding support of affordable and supportive housing services whieh
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 polieies of the City’s Comprehensive Plan. The City does not
have specific target areas for housing aetivities but attempts to distribute subsidized housing
throughout the City,
Community Development Activities: Specific efforts are being 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 new police substation has recently opened 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.
Changes to Plan
The City was informed that Innovative Housing for Community, Inc. ceased operations on
November 22, 1996. $13,500 in CDBG public service funds had been allocated to Innovative
Housing in fiscal year 1996/97 for the provision of shared housing and supportive services. As
’ of the-closure date, there was an unexpended balance of $10,125 in the account. OnNovember
1, 1996, the nonprofit provider of Palo Alto’s nutrition program for seniors, La Comida de
California, was informed bySanta Clara County’sSocial Service Agency that funding for the
nutrition program would be reduced by $17,367. This unexpected action createdan emergency
situation for La Comida and put the senior nutrition program in jeopardy. In order to offset a
portion of the funding deficit for the balance of fiscal year 1996/97, the CDBG Citizens Advisory
Committee recommended to the City Council that the $10,125 in unexpended public service funds
from Innovative Housing be transferred to La Comida. The City Council approved the transfer
at their.meeting on March 24, 1997.
Urgent Need Activities
In the evem 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 otheravailable 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 of the
Consolidated Plan. For all CDBGand 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
funding subrecipient 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.
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Coordination
As part of the development process of the Consolidated Plan, the staffs of the CDBG entitlement
cities of Palo Alto, Sunnyvale, Mountain View, Santa Clara, Gilroy, 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.
To further.understanding, coordination and collaboration on homeless issues, the City participates
in the Santa Clara County Collaborative on Housing and Homelessness. The City’s CDBG
Coordinator serves on the Collaborative’s Executive Committee. ¯ _.
Over the last several years, these cities have cooperated in the joint funding of a number of CDBG
and housing projects of Countywide significance. Neighboring eities frequently cooperate in
jointly funding housing for special needs populations. 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 publie
service agencies. - --
LISTING OF PROPOSED 1997/98 CDBG PROJECTS
1. Catholic Charities
2625 Zanker Rd. Suite 200
San Jose, CA 95134-2107
Long Term Care Ombudsman Program
$13,400
l:!escr.ipfiom 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 rights, physical and
sexual abuse, quality of care, fiduciary abuse, neglect, diet, theft, incorrect placement, eviction,
and other concerns.
2. Emergency Housing Consortium
P. O. Box 2346
San Jose, CA 95109
Shelter and Services for the Homeless
$11,000 - -
I~.scrAplio~ 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 he!p secure housing and/or employment.
3. Palo Alto Housing Corporation (PAHC)
540 Cowper Street Suite G
Palo Alto, CA 94301
a) Affordable Housing Information and Referral, Reprinting of the Affordable
Housing Directory; and b) Casework Counseling at the Barker Hotel
$35,000
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~ The mission of PAHC is to foster, develop, acquire, and operate low- and m~xlerate-
income housing in Palo Alto. PAHC will provide affordable housing information and referral to
callers, and prepare and distribute the affordable housing directory. PAHC will also provide
counseling and supportive services to the low income residents of the Barker. single, room
occupancy hotel.
4. Urban Ministry. of Palo Alto (UMPA)
P. O. Box 213
Palo Alto, CA 94302
Services for the Homeless
$66,900
Dme.,xipfioa: 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; ease
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.
5. Outreach And Escort, Inc.
97 East Brokaw Road, Suite 140
San Jose, CA 95112
Special Needs Transportation Subsidies
$6,000
Dmmiplim~ Agency provides 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 fLied 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.
6. Mid-Peninsula Citizens for Fair Housing (MCFID
457 Kingsley Avenue
Palo Alto, CA. 94301
Fair Housing Services
$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
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serves the mid-peninsula area from Redwcxxt 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.
7. City of Palo Alto - Department of Planning and Community Environment
250 Hamilton Avenue
Palo Alto, CA 94301
CDBG Program Administration/Project Delivery Costs
$180,000
~ Funding is 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 identif’mation of actions for implementation of plans.
8. Mid-Peninsula-Housing Coalition (MPHC)
658 Balr Island Road, Suite 300
Redwood City, CA 94063
~ ::- Predevelopment .- New Family Housing
Eunding: ... ~..$50,000:
~ This application was in response to the City’s Request for Proposals from housing
"developers interested in pursuing a site for the development of new affordable housing. The
project proposes to provide 30+units of affordable rental housing for families. The proposal is
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.
9. Palo Alto Senior Housing Project, Inc. (Stevenson House)
455 E. Charleston Rd~
Palo Alto, CA 94303
Roofing of Buildings B in Senior Residential Facility
$48,000
Dmc, rAlXiom Stevenson House is a senior residential facility providing 109 units of affordable
homing for approximately 135 independently functioning, older adults. Funds are to re-roof one
of the three buildings in the complex.
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10. Veterans Workshop, Inc./Next Step Center
795 Willow Road, MS 116B6 .
Menlo Park, CA 94025
Acquisition of Shared Transitional Housing for Veterans at 442 Margarita Street,
Palo Alto
$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, without the requestedassistance, would require sale
of the home and displacement of the residents. The project provides housing for seven disabled,
very low income veterans. Veterans Workshop also provides supportive services tO. the residents.
11.Alliance for Community Care (Formerly Miramonte Mental Health)
438 N. White Road
San Jose, CA 95127
]~oject: Funds to. Conduct Feasibility Study for Property at 650 Waverley, Palo Alto
Funding: : $17,600
Ikscr_ipliom The newly created Alliance for Community Cafe’s (previously Miramonte Mental
Health Services, Avenues to Mental Health and Community Companions) mission is to help
individuals achieve mental and emotional health, discoverand realize their potential, and fully
participate in life. Agency plans to conduct a feas$ility 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 andestimate the funding necessary for rehabilitation and adaption to a multi-family or
single room occupancy type of shared housing use. Alliance will partner with the Palo Alto
Housing Corporation to coordinate this effort and future rehabilitation of the property. The
existing structure is a two story wood frame single family residence with eight bedrooms and three
and one.half bathrooms., It is currently vacant
12. City of Palo Alto - Department of Planning and Community Environment
250 Hamilton Avenue . .
Palo Alto, CA 94301
Housing Development Fund
$543,600
Dm.cxiptim~ 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 andvery low income
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families, disabled persons, and single persons. The CDBG fund has a currem balance of
approximately $577,649. The addition of the proposed mount to the CDBG housing
development fund will increase the balance to $1,121,249. The current objective is to acquire a
site of 1.0 to 2.0 acres suitable for medium density, family apartments. The cost of the land could
be as high as 2 million dollars.
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