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Home My WebLink About1996-05-06 City CouncilCity of Palo Alto City Manager’s Report TO: FROM: AGENDA DATE: HONORABLE CITY COUNCIL CITY MANAGER DEPARTMENT: MAY 6, 1996 CMR: 242:96 7 SUBJECT:PUBLIC HEARING: FY 1996/97 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ALLOCATIONS AND ANNUAL ACTION PLAN REQUEST The purpose of the May 6, 1996 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. By Council’s adoption of the attached Resolution, staffwill be authorized to submit the appropriate certifications and application, now contained Within the attached Draft 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 1996-97 Annual Action Plan to HUD is May 15, 1996. RECOMMENDATIONS Staffrecommends that the City Council: Authorize and direct staffto carry out any further required environmental assessments and certifications for each project under both the California Environmental Quality Act (CEQA), and the National Environmental Policy Act (NEPA), prior to the commitment of any funds for each project. Adopt the attached resolution establishing funding allocations and a funding contingency plan for the 1996/97 CDBG Program. Authorize and direct the City Manager, or her designee, to execute and submit the 1996/97 CDBG application and other documentation necessary to file the application with HUD, and to otherwise bind the City with respect to the application. CMR:242:96 Page 1 of 3 POLICY IMPLICATIONS The 1996/97 CDBG Program and funding recommendations do not represent any change to existing City policies. EXECUTIVE SUMMARY The required 30-day public review period for the 1996/97 Annual Action Plan began on March 29, 1996 and ended on April 29, 1996. There were no public comments. The attached staff report (CMR:204:96) provides background information on the 1996/97 CDBG process includinga brief description of the funding proposals, the methodology and criteria for review, and the staffand Citizen Advisory Committee (CAC) recommendations. The recommendations in that report were reviewed at the April 4, 1996 meeting of the Finance Committee, also a public hearing. Following public testimony, the Finance Committee reviewed and discussed the various proposals and voted to endorse staff’s and the CAC’s funding recommendations. Additionally, the Finance Committee decided that some of the Urban Ministry administrative issues should be explored in greater depth at the special City Council Committee-of-the-Whole meeting on April 18, 1996. The Urban Ministry’s written response to the questions submitted by the Finance Committee was included in the packet for the April 18 meeting, and no further action was taken. The amount of the CDBG entitlement allocation for 1996/97 is still unknown. President Clinton signed another Continuing Resolution (CR) before Congress departed for the two week Easter/Passover recess. The measure funds those departments and agencies without full year appropriation bills through April 24, 1996. Congress and the President will resume negotiations on H.R. 3019, the omnibus fiscal 1996 funding bill, the week of April 15, 1996. FISCAL IMPACT The CDBG Program will increase the amount of funds available to the City for programs and projects which benefit lower income residents. ENVIRONMENTAL ASSESSMENT For purposes of the Califomia Environmental Quality Act (CEQA), budgeting is not a project. In the project descriptions in Attachment B to attached CMR:204:96, the environmental assessment for each project has been identified. The HUD environmental regulations 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 CMR:242:96 Page 2 of 3 recipients to 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 the required environmental reviews or assessments, and certify that the review procedures under CEQA, and HUD and NEPA regulations have been satisfied for each particular project. ATTACHMENTS Resolution CMR:204:96 Draft. 1996/97 Action Plan PREPARED BY: Suzanne Richards, CDBG Coordinator DEPARTMENT HEAD REVIEW: KENNETH R. SCHREIBER Director of Planning and Community Environment CITY MANAGER APPROVAL: Manager CC:CDBG Citizens Advisory Committee Applicant Agencies CMR:242:96 Page 3 of 3 RESOLUTION NOo RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO APPROVING THE USE OF COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS FOR FISCAL YEAR 1996-1997 WHEREAS, on May l, 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 1996-97 Action Plan, the annual update to the Consolidated Plan was subjected to public review and commentary during the period of March 29, 1996 through April 29, 1996; 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 1996-97; and WHEREAS, the fiscal year 1996-97 CDBG funds allocated to the City are proposed to implement the following programs; NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as follows: SECTION I. The uses of CDBG funds for fiscal year 1996-97 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.$ 12,900 Emergency Housing Consortium. EHC provides temporary shelter and supportive services for homeless individuals and families. County-wide.10,500 960424 syn 0070955 1 o o ° o I0. Innovative Housing. IH manages shared and transitional housing programs, and provides supportive services primarily for verylow income single parents, individuals or families. City-wide. Palo 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. Urban Ministry of Palo Alto. Provision of basic support services to homeless individuals including the provision of emergency food and a rotating church shelter program. City-wide. Outreach and Escort, Inc. Transportation subsidies for eligible low income disabled Palo Alto residents registered through the County of Santa Clara’s Special Needs Transportation program. City-wide. Mid-Peninsula Citizens for Fair Housing. MCFH provides services to promote fair housing, including complaint investigation, counseling, advocacy and education. City-wide. City of Palo Alto. Department of Planning and Community Environment. Overall CDBG grant administration and capital improve- ment project delivery costs associated with federal funding. City-wide. Senior Coordinating Council. SCC operates the Home Repair Program. This project provides subsidies for minor home repairs for lower income elder.ly homeowners. City-wide. Innovative Housing. Rehabilitation of a shared transitional single-family house in East Palo Alto. Innovative Housing provides subsidized rents and supportive services for low-income, homeless and at-risk persons.2800 Illinois St., East Palo Alto. 13,000 29,300 58,000 6,000 19,000 180,000 12,000 21,000 960424 syn 0070955 2 ii. 12. 13. Arastradero Park Apartments Corp., an affiliate of the Palo Alto Housing Corporation. Arastradero Park Apart- ments Water Replacement project. Improvements to water-supply system .in 66 unit family complex. 574 Arastradero Rd., Palo Alto. Palo Alto Housing Corporation. Emerson No. Apartments. Rehabilitation of a six-unit studio apartment complex affordable to small households. 3051-3061 Emerson St., Palo Alto. 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 persons with Low-Income and Very-Low Income. City-wide. 286,380 69,300 .... 346,512 TOTAL:$1,063,892 SECTION 2. The City Manager is hereby authorized to make adjustments to the fundfng amounts for Catholic Charities, Emergency Housing Consortium, Innovative Housing, Mid-Peninsula Citizens for Fair Housing and the Housing Development Fund based on the actual entitlement amounts and in accordance with the following contingency plan. If the grant is increased by an amount up to the level of the fiscal year 1995-96 grant, that amount wil! be used to increase Catholic Charities’, Emergency Housing Consortium’s and Innovative Housing’s allocations up to an amount equal to a two percent increase over their current year’s allocation. MCFH wil! be given increased funding up to the two percent limit over the current year’s funding (plus the two additional new programs). The balance of any additional funds will be transferred to the Housing Development Fund. SECTION 3. The total amount set forth under Section 1 of this resolution hereby represents the proposed allocation of $722,680 in CDBG funds, from the United States Department of Housing and Urban Development ("~") for fiscal year 1996-97, $60,000 in anticipated program income for fiscal year 1996-97, $200,000 in unallocated program income from prior program years, and $31,212 in reallocated funds. SECTION 4. 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. 960424 syn 0070955 SECTION 5. The City staff is hereby authorized to submit the appropriate application forms to HUD for the fiscal year 1996- 97 CDBG funds, and such money shall be spent as set forth in this resolution. The Mayor, City Manager and any other designated City staff or officials are hereby authorized to execute such applica- tion forms and any other necessary documents to secure these funds. SECTION 6. The City Council hereby finds that the fiscal year 1996-97 CDBG program authorized under Section 1 of this resolution is not a project under the California Environmental Quality Act ("CEQA"). However, the Council further, authorizes and directs City staff to conduct any further environmental review, and prepare any additional environmental assessments and certificates that may be required, under CEQA and the National Environmental Policy Act (NEPA) for each project under the fiscal year 1996-97 CDBG program prior to the release of funds for any such project. INTRODUCED AND PASSED: AYES : NOES : ABSTENTIONS : ABSENT: ATTEST:APPROVED: City Clerk APPROVED AS TO FORM: Senior Asst. City Attorney APPROVED AS TO CONTENT: Mayor City Manager Director of Planning and Community Environment CDBG Coordinator Deputy City Manager, Administrative Services 960424 syn 0070955 4 THIS REPORT COUNC_IL PRIORITY 3UDGET 1996-98 TO:HONORABLE CITY COUNCIL Attention:Finance Committee FROM:CITY MANAGER DEPARTMENT: Planning and Community Environment AGENDA DATE: APRIL 2, 1996 CMR:204:96 SUBJECT:1996/97 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)ALLOCATIONS REQUEST This report transmits the recommendations of City staff and the CDBG Citizens Advisory Committee (CAC) for the expenditure of Community Development Block Grant (CDBG) funds for the 1996/97 fiscal year. The Finance Committee is requested, after holding a public hearing, to assess the recommendations and forward on to the full Council its recommendations for CDBG expenditures. RECOMMENDATIONS Staff recommends that the Finance Committee recommend to the City Council approval of the following: The funding allocations and the funding contingency plan, as recommended by staff and the Citizens Advisory Committee in Attachment B, be included in the 1996/97 CDBG Action Plan. Staff be authorized to submit to the Department of Housing and Urban Development (HUD); by the May 15, 1996 deadline, the proposed Action Plan for the expenditure of 1996/97 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. CMR:204:96 Page 1 of 13 POLICY IMPLICATIONS The funding recommendations at the current level do not represent a change to existing City policies. Since Congress has not yet adopted a federal budget, the exact amount of CDBG funds is unknown. A significant decrease in the level of HUD funding for the CDBG Program could have a potentially negative effect on City housing policy and the goals and objectives in the adopted Consolidated Plan. EXECUTIVE SUMMARY The budget impasse in Washington has delayed passage of the 1996 HUD appropriation bill. Budget authority is currently based on a Continuing Resolution (CR), set to expire on March 29, 1996, which sets available funding at approximately 45 percent of the 1995/96 CDBG allocation. Staffand the CAC have been able to consider only these funding scenarios based on probable budget outcomes rather than on a certain HUD allocation. Funds have been allocated based on a 6 percent reduction in federal funds to Palo Alto. This is the best guess estimate from various sources. A contingency plan for other funding scenarios is contained in Attachment B. FISCAL IMPACT The CDBG Program will increase the amount of funds available to the City for programs and projects which benefit lower income residents. A higher proportion of staff costs might have to be absorbed by the General Fund (not reimbursed by HUD), if MDB accounting shows staff time spent on non-CDBG eligible projects, or if the amount of reimbursable expenses exceeds the amount allocated for reimbursement. The General Fund could also be impacted if the actual CDBG allocation is less than anticipated. ENVIRONMENTAL ASSESSMENT For purposes of the California Environmental Quality Act (CEQA), budgeting is not a project. In the project descriptions in Attachment B, the environmental assessment for each project has been identified. PREPARED BY: Suzanne Richards, CDBG Coordinator DEPARTMENT HEAD REVIEW: KENNETH R. SCHREIBER Director of Planning and Community Environment CMR:204:96 Page 2 of 13 CITY MANAGER APPROVAL: City CMR:204:96 Page 3 of 13 CMR:204:96 Page 4 of 13 SUBJECT: ~1996/97 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING ALLOCATIONS REQUEST This report transmits the recommendations of City staff and the CDBG Citizens Advisory Committee (CAC) for the expenditure of Community Development Block Grant funds for the 1996/97 fiscal year. The Finance Committee is requested, after holding a public hearing, to assess the recommendations and forward on to the full Council its recommendations for CDBG expenditures. RECOMMENDATIONS Staff recommends that the Finance Committee recommend to the City Council approval of the following: The funding allocations and the funding contingency plan, as recommended by staff and the Citizens Advisory Committee in Attachment B, be included in the 1996/97 CDBG Action Plan. o Staff be authorized to submit to the Department of Housing and Urban Development (HUD), by the May 15, 1996 deadline, the proposed Action Plan for the expenditure of 1996/97 CDBG program funds. The City Manager, on behalf of the City, be authorized to execute the HUD application and Action Plan and any other necessary documents concerning the application, and to otherwise bind the City with respect to the application. BACKGROUND The City of Palo Alto receives funds annually from the U.S. Department of Housing and Urban Development (HUD) as an entitlement City under the CDBG Program, authorized by Title I of the Housing and Community Development Act of 1974, as amended. The primary objective of the Act is "the development of viable urban communities by providing decent housing and a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income." CMR:204:96 Page 5 of 13 HUD Regulations HUD regulations require that, in the aggregate, a minimum of 70 percent of the 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 serious and immediate threat to the health or welfare of the community. Palo Alto has historically expended all of its CDBG funds on activities which benefit low and very low income persons. The 1996 HUD income data for Santa Clara County define median income for a family of four as $67,400. HUD income limitations classify low income persons as households with incomes of 80 percent of the median income, and very low income as 50 percent of median. In high-cost areas such as Santa Clara County, however, the low income figure is capped below the 80 percent figure. Currently the cap for low income persons is at 62 percent of median, or $41,600 for a family of four. The very low income limit is 50 percent of median, or $33,700 for a family of four. In 1995, new HUD regulations required entitlement jurisdictions to produce and adopt a five- year Consolidated Plan which described the jurisdiction’s condition and resources, identified priority housing and non-housing needs, and outlined a strategy and Action Plan to address the identified needs. The Consolidated Plan is meant to serve as a guide to ensure that federal funds are directed toward the most urgent needs, and that funding decisions are consistent with identified strategies. Each year, the Action Plan is updated, submitted to HUD, and serves 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. In 1996, HUD added the requirement that jurisdictions produce an Analysis of Impediments (AI) to Fair Housing Choice, as a companion document to the Consolidated Plan. An annual Action Plan to address impediments identified in the analysis will also be required. The AI was completed on February 6, 1996 and has been reviewed by the CDBG Citizens Advisory Committee, and will be reviewed by the Human Relations Commission at their April 11, 1996 meeting. Summaries of the draft 1996/97 Action Plans for the Consolidated Plan and the AI were published in the Palo Alto Weekly on March 20, 1996 for the required 30-day public review period. The full City Council will be asked to review and approve the AI and the Action Plans at a public hearing scheduled for May 6, 1996. CMR:204:96 Page 6 of 13 Available....Funds The amount of CDBG grant funds available to Palo Alto for fiscal year 1996/97 is not yet known. As of this writing, House and Senate Conferees are negotiating on a one-year Continuing Resolution (CR) in the absence of an approved FY 96 appropriations bill. For CDBG, the bill allows HUD to continue operations at the approved funding level of $4.6 billion. However, the measure also contains a reduction of $1.2 billion in unspecified cuts to HUD programs. Based on the portion of 1996 funds received by HUD under the Continuing Resolution which extends until March 29, 1996, HUD released partial allocation figures to entitlement jurisdictions in late February, representing approximately 45 percent of last year’s grant amount. For Palo Alto, that amount was $356,000. In order to proceed with the funding recommendations through the CDBG Citizens Advisory Committee process, however, certain assumptions had to be made. The attached funding recommendations are based on an estimated 6 percent reduction in the amount of the 1996/97 grant from the 1995/96 gratit, which was $822,000. This "best guess" estimate is based on the overall 1996 federal appropriation for the CDBG program being the same as the 1995 level of $4.6 billion, and taking into consideration added entitlement jurisdictions and program set-asides. For purposes of determining funding allocations and the applicable program funding cap calculations, the entitlement grant for 1996/97 is estimated to be $772,680. In addition to the grant, it is estimated that $60,000 iia Program Income will be available in 1996/97. Program income is defined as income directly generated from the use of CDBG funds. The main sources of funds are from payments on loans made with CDBG funds, or from rental income in excess of expenses on property acquired or improved with CDBG funds. The majority of CDBG Program Income is received from loan repayments under the City’s Housing Improvement Program (HIP) single family rehabilitation program. Additionally, $200,000 in previously received program income that has not yet been allocated is available for programing. These funds were in excess of the anticipated program income for the past three years. The amount represents actual program income received in excess of estimated projections for past years. Also available is $31,212 for reallocation from previously allocated funds which were not used. The majority of the unused funds was surplus funds set aside for the Arastradero Park Apartments acquisition. The total estimated 1996/97 funds are as follows: CMR:204:96 Page 7 of 13 FY 1996/97 CDBG Allocation (est. 6% reduction) 1996/97 Program Income (est.) Program Income received in prior years Reallocation of previously allocated, but unspent funds $772,680 60,000 200,000 31,212 $1,063,892 Public Se~ice Category. The primary focus of the CDBG program is on capital projects such as new housing, land acquisition, relocation, architectural barrier removal, site clearance, housing rehabilitation, historic preservation, economic development, or other similar activities. Two other categories of fimding, Public Service and Program Administration, are also allowed. Funding for organizational 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 (1995/96) The estimated maximum fimding in this category for 1996/97 is $129,700, based on the 1995/96 program income projection of $92,000 and the estimated 1996/97 grant allocation of $772,680. ($772,680 + $92,000 = $864,680 x 15% = $129,700). Program Administration Category. 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 (1996/97). The estimated maximum funding allowed for 1996/97 under this category is $166,536 based upon program income projections of $60,000 and the estimated grant allocation of $772,680. ($772,680 + $60,000 = $832,680 x 20% =$166,536). The service contract for Fair Housing, as well as City staff time spent on overall program administration and planning studies, is eligible for reimbursement under this category. City staff time spent on specific capital projects is considered a "project delivery" cost, and not subject to the 20 percent limitation. The request for program reimbursement for City of Palo Alto staff expenses has been split between "administrative expenses" (the amount that falls under the cap) and project delivery expenses. Citizen Participation Federal regulations require that citizens receive information on a community’s proposed CDBG program in a manner which provides for timely examination, appraisal and comment. To address this requirement and encourage active citizen participation in the CDBG process, the Palo Alto City Council adopted a Citizen Participation Plan on December 13, 1993, which provides for a nine member CDBG Citizens’ Advisory Committee (CAC) to be selected by the Mayor. An ad was placed in the Palo Alto Weekly on November 10 and 15, 1995, to recruit new members. New Committee members were selected and appointed by CMR:204:96 Page 8 of 13 former Mayor Joe Simitian from the applications received. To provide for coordination between the Human Service Resource Allocation Process (HSRAP) and the CDBG funding allocation process, a member of the Human Relations Commission (HRC) occupies one of the nine CAC slots. This year’s Committee included Greg Avis, Owen Byrd, Beverly Clayton, Karl Garcia, Jonathan Glendinning, Wynn Hausser (HRC Liaison), Carol Richards, Helen Tao and Margaret Toor. Owen Byrd was selected as the Committee Spokesperson. Public meetings were held on January 4, 18 and 25; February 1, 15, 22 and 29; and March 7 in the Council Conference Room at City Hall. Staff and the CAC reviewed 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 1996/97 funding were mailed to an extended list of area housing and/or human service providers on October 31, I995. A notice announcing the availability of applications was published in the Palo Alto Weekly on November 1, 1995. Completed applications were due by 5:00 p.m. on Friday, December 15, 1995. The applications were due earlier than usual this year, because of accelerated timetables as a result of the HUD Consolidated Planning Process. Housing applications were expanded this year to include "Requests for Proposals" for funding from the CDBG Housing Development Fund, the HOME Investment Parmership Program, and the City’s Housing Reserve Program. Although applications for these funds may technically be submitted at any time during the year, for housing projects or activities which require funding commitments on short notice due to market opportunities or to meet the schedule of other housing funding sources, the CDBG cycle was utilized to maximize citizen participation in the process. The City is not an entitlement jurisdiction for HOME funds, but is eligible to apply to the State of California, on a competitive basis, for up to $1 million in HOME funds annually. The City submitted an application for F¥ 1995 HOME funds to the State on September 15, 1995. In that application, the City proposed using 1995 HOME funds for a new Single Room Occupancy (SRO) project sponsored by the Palo Alto Housing Corporation, and for a new apartment project for persons with developmental disabilities sponsored by Mid-Peninsula Housing Coalition. The CDBG and Housing Development Fund application was intended to solicit project proposals for F¥ 1996 HOME funds and for back-up housing activities for 1995 HOME funds. Unfortunately, the City was not awarded 1995 HOME funds from the State. The CDBG Housing Development Fund has a current balance of $624,817, and the Housing CMR:204:96 Page 9 of 13 Reserve Fund has a balance of approximately $475,000. Recommended allocations of these funds are discussed in Attachment B. Proposal Review Criteria All funding applications were reviewed by City staff for compliance with federal project eligibility requirements. Additionally, all applications were evaluated based on the needs and priorities identified in the adopted Consolidated Plan. Other factors considered in the staff and CAC recommendations were the urgency of the program or project; the effect of a delay (in funding) on the services provided; project/agency readiness; financial feasibility of the program or project; the number of low income Palo Alto residents served; whether or not the request increased the services provided or the number of clients served; whether or not the services were duplicated by other agencies; the agency’s previous performance experience and anticipated capacity to carry out the program or project; the availability of other funding sources to the applicant; and whether or not the goals of the service could be obtained with less funding. The affordable housing needs and priorities stated in the Consolidated Plan can be summarized as follows: New Construction of Rental Housing (occupancy to be primarily very low and low income households, or homeless, or households at-risk of homelessness, or persons with special needs or disabilities). Preservation of existing, federally subsidized, low income rental housing Existing Multi-Family Rental Housing: 1) Rehabilitation of existing rental housing occupied by low and very low income households and .2) Acquisition and rehabilitation, if needed, of existing multi-family rental housing for conversion to affordable rental units for very low income occupancy. Shared housing for very low income households, especially single parent households. Acquisition and/or rehabilitation of group homes and other housing for occupancy by persons with disabilities. Housing activities and projects which support the City’s Below Market Rate Housing Program. Transitional rental housing with supportive services. Funding Recommendations City staff and the Citizens Advisory Committee concur on the recommendations for funding for the 1996/97 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. It includes a contingency funding plan to handle minor changes to CDBG grant amount. The contingency plan CMR:204:96 Page 10 of 13 provides funding altematives, if the estimated CDBG allocation is increased or decreased by up to 10 percent. A variation greater than 10 percent would require that the CAC reconvene to consider a different funding scenario. POLICY IMPLICATIONS The 1996/97 CDBG Program and funding recommendations, as presented, do not represent a change to existing City policies. DISCUSSION ’ The amount of money available for public service programs is restricted by the 15 percent public service cap. Anticipated reductions in the amount of the CDBG grant, as well as decreases in program income, will result in hardships for the agencies applying for funding under this category. Given the estimated funding scenario this year, the public service cap is 6 percent less than in the current year. The cap makes it difficult to fund new services, programs, or agencies, and provide cost of living adjustments to agencies performing well under their existing contracts. Additionally, for agencies receiving CDBG funds from several jurisdictions, the effects of budget reductions are multiplied significantly. The number of physical projects which are recommended for funding is limited not only by the amount of money available, but by the staff time available to administer the projects. Staff currently has a backlog of capital projects to complete as follows: 1 1 1 1 1 1 1 1 1 1 1 992/93 Casa Say Shelter Rehabilitation $10,000 993/94 Lytton Gardens - Accessibility $56,618 993/94 Stevenson House - Fire Alarm $30,000 994/95 Stevenson House - Accessibility $21,000 994/95 Emergency Housing Consortium -$50,000 Reception Center 994/95 Casa Say - Shelter Rehabilitation $10,000 994/95 Rinconada Park Accessibility $45,000 995/96 Ventura Community Center $183,000 995/96 CAR Swim Center Addition $35,000 995/96 Pacific Art League - Accessibility $23,400 995/96 YWCA - Women’s Loan Program $35,000 To alleviate a similar situation in fiscal year 1991/92, the City allocated $45,667 from the CDBG funds to direct costs relating to the administration of the rehabilitation projects. A part-time employee was hired to handle the rehabilitation projects. When that backlog of projects was completed in 1994, the temporary position was eliminated. It was anticipated that the Housing Planner would be able to pick up the function. Unfortunately, that has not been the case. The Housing Planner has had to concentrate on housing development projects CMR:204:96 Page 11 of 13 such as the Barker Hotel, the Alma Street SRO, 330 Emerson, Housing for the Developmentally Disabled, and others. In addition, significant administrative changes to the CDBG Program have been initiated by HUD. Staff now has to prepare a five-year Consolidated Plan with annual updates, an Analysis of Impediments to Fair Housing Choice, as well as added monitoring responsibilities including Davis-Bacon prevailing wage requirements. For next year, all reporting and accounting will be done on-line through a national data base. These new procedures will again require a significant investment of staff time to learn, initiate and maintain. To address the backlog of capital projects and to provide for the anticipated program changes, staff has requested that $8,000 of the $180,000 City reimbursement be available for a contract employee to provide temporary assistance, as necessary, to complete the construction projects. This could potentially impact the General Fund, since the contract costs would come from the available CDBG administrative funds. Since adoption of the new Mission Driven Budget (MDB) format, which the City is using to track stafftime on specific projects, staff will be able to more accurately identify the exact amount of time spent on eligible CDBG administrative and project delivery costs. Our belief, based on one-half year of MDB, is that eligible CDBG reimbursement might not reach the full $180,000, if current staffing assignments are maintained. For the eight-month period ending February 29, 1996, staff expenditures for the CDBG program were $98,166. Annualized, this figure would be approximately $150,000. Currently, an additional $12,000 is budgeted for non-salary expenses. It should be noted that these funds would not be lost, but would be eligible for reallocation to other projects. City staff will continue to monitor these figures to maximize City salary reimbursements. ALTERNATIVES The Finance Committee may choose to recommend to the City Council an alternative funding scenario to the one presented by staff and the Citizens Advisory Committee, or a modification in the amount of funding for specific programs or projects. FISCAL IMPACT The CDBG Program increases the amount of funds available to the City for community development and housing projects which benefit lower income residents. The exact amount will not be known until the 1996 federal budget has been approved. The City expends funds for the CDBG Program from the General Fund, and then requests reimbursement from HUD on a quarterly basis. City staff costs for program administration, and to assist in the completion of housing and community development projects (project delivery costs) are eligible to be reimbursed by the HUD grant. CMR:204:96 Page 12 of 13 A higher proportion of staff costs might have to be absorbed by the General Fund (not reimbursed by HUD), if MDB accounting shows staff time spent on non-CDBG eligible projects, or if the amount of reimbursable expenses exceeds the amount allocated for reimbursement. The General Fund could also be impacted if the actual CDBG allocation is less than anticipated. ENVIRONMENTAL ASSESSMENT For purposes of the California Environmental Quality Act (CEQA), budgeting is not a project. In the Project Descriptions 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, HUD and NEPA regulations have been satisfied for each particular project. STEPS FOLLOWING APPROVAL Funding recommendations made by the Finance Committee will be forwarded to the City Council for review and approval at their regularly scheduled meeting of May 6, 1996. The Council will be asked to adopt a resolution establishing funding allocations, review and approve the Analysis of Impediments to Fair Housing Choice and the 1996/97 Action Plan containing the CDBG application and requisite certifications, and direct that staff submit the application to HUD by the May 15, 1996 deadline. ATTACHMENTS~XHIBITS Attachment A:Chart of 1996/97 funding applications and recommendations Attachment B:Narrative report containing staff and CAC funding recommendations Attachment C:Letter from the CAC to City Council and the Urban Ministry of Palo Alto’s Board of Directors regarding the Urban Ministry’s funding request. CC:CDBG Citizen’s Advisory Committee Members Applicant Agencies CMR:204:96 Page 13 of 13 ATTACHMENT A 1996/97 CDBG FUNDING REQUESTS AGENCY/PROJECT TI ,TLE Public Services 2. 3. 4. 5. 6. 7. 8. 9. 10. Women In Need Now 1995/96 1996/97 FUND~G REQUEST Sub-total Catholic Charities 13,200 Emergency Housing Consortium 10,700 Innovative Housing 13,300 Palo Alto Housing Corp.37,100 Urban Ministry 60,000 Outreach & Escort 4,000 Mental Health Advocacy -0- Community Services Agency -0- Santa Clara Valley Multi-Service Center -0- -0- 138,300 CAC & STAFF RECOMMEND. 13,860 12,900 11,200 10,500 20,000 13,000 55,700 29,300 62,500 58,000 8,000 6,000 13,000 -0- 50,000 -0- 3,614 -0- 135,,,000 -0- 372,874 129,700 Program Administration 11. City of Palo Alto -CDBG Admin t 2. Mid Peninsula Citizens for Fair Hsng Sub-total 140,000 140,000 140,000 16,275 20 089 19,000 156,275 200,089 159,000 Capital Improvements to Public Facilities 13. Peninsula Children’s Center - Energy Impr. Sub-total N/A 20,000 -0- 20,000 -0- Housing Production/Housing Rehabilitation 11. City of Palo Alto - Project Delivery 39,725 14. Senior Home Repair Program 11,000 15. Housing Development Fund 351,200 16. Mid Peninsula Housing Coalition N/A 17. Innovative Housing - Illinois St.N/A 18. Lytton Gardens - Air Conditioning N/A 19. Palo Alto Housing Corp. - Waldo N/A 20. Palo Alto Housing Corp. - Emerson N/A 21. Palo Alto Housing Corp. - ArastraderoN/A 22. Stevenson Housing Corp. - New Roof N/A 23. Social Advocates for Youth - Casa SayN/A Sub-Total Total 40,000 40,000 12,000 12,000 500,000 346,512 711,000 (711,000) * 21,000 21,000 81,056 -0- 49,171 -0- 69,300 69,300 286,380 286,380 110,000 -0- 5,000 ( 5,000)** 1,844,907 775,192 2,437,870 $1,063,892 24.Emergency Housing - San Jose homeless reception center update - location change ($50,000 allocated in 1994/95, no additional money requested) "411,000 from existing CDBG Housing Development Fund and $300,000 from the City’s Industrial-Commercial Housing In-Lieu Fund (Not included in total) **From existing CDBG contingency funds (not included in total) Anticipated Funds Available: FY 1996/97 CDBG Allocation (est. 6% reduction) 1996/97 Program Income (est.) Reallocation of previously allocated funds Prior unprogrammed Program Income 772,680 60,000 31,212 200.000 1,063,892 Public Service Cap Calculation: FY 1996/97 Allocation (est) FY 1995/96 Program Income (est) 772,680 92,000 864,680 x 15% = $129,700 Administration Cap Calculation: FY 1996/97 Allocation (est) FY 1996/97 Program Income (est) 772,680 60,0O0 832,680 x 20% = $166,536 ATTACHMENT B STAFF AND CAC FUNDING RECOMMENDATIONS FOR 1996/97 CDBG FUNDS The following recommendations are based on the assumption that the CDBG grant will be reduced by six percent over the 1995/96 level. The funding recommendations have been carefully considered so that they fit within category caps and other program requirements. If the grant is increased by an amount up to the level of the current year’s grant, it is staff and the Committee’s recommendation that the amount be used to increase Catholic Charities, Emergency Housing Consortium, and Innovative Housing’s allocations up to an amount equal to a two percent increase over their current year’s allocation. Mid-Peninsula Citizens for Fair Housing should also be given increased funding up to the two percent limit over the current year’s funding (plus the two additional new programs). The balance of any additional funds should be provided to the Housing Development Fund. If there is a decrease in total funds in excess of the six percent.anticipated, that reduction will be shared by all the public service agencies so they fit under the fifteen percent cap. Reductions will also need to be made to the City allocation and the Mid-Peninsula Citizens for Fair Housing contract so the amounts fit under the reduced caps. Further reductions should be taken from the Housing Development Fund. Final grant adjustments greater than ten percent from the anticipated funding should be referred back to staff and the Citizens Advisory Committee for additional review and new funding recommendations. PUBLIC SERVICE APPLICATIONS CATHOLIC CHARITIES - Long Term Care Ombudsman Program 2625 Zanker Rd. Suite 200, San Jose, CA 95134-2107 FUNDING Request $13,860 Current Funding $13,200 Recommendation $12,900 Description 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 J patient/resident rights, physical and sexual abuse, quality of care, fiduciary abuse, neglect, diet, theft, incorrect placement, eviction, and other concerns. Environmental Not a Project under CEQA. Recommendation Current contract objectives are being met or exceeded. Services an area which is necessary and not duplicated by any other agency. In the first six months of the 1995/96 fiscal year, agency opened and investigated 47 cases in response to direct complaints, including 8 for elder abuse or gross neglect. 411 residents were contacted or assisted. The funding recommendation represents a 2.0% decrease over the. current year’s allocation in anticipation of a HUD funding reduction for the CDBG program. EMERGENCY HOUSING CONSORTIUM - Shelter and Services for the Homeless P. O. Box 2346, San Jose, CA 95109 Request $13,300 Current Funding $10,700 Recommendation $10,500 Description Agency provides emergency shelter and supportive services to homeless men, women, and families with children throughout Santa Clara County. Emergency Housing Consortium operates the Family Living Center in Santa Clara, the winter shelters at the National Guard Armories in Sunnyvale, San Jose, and Gilroy, and various transitional housing programs in San Jose. Supportive services include prepared meals, counseling, child care, and life skills workshops to help secure housing and/or employment. Environmental Not a Project under CEQA. Recommendation Current contract objectives are being met. Agency served 28 unduplicated persons, whose last significant address was Palo Alto, with 201 shelter nights during the first six months of the 1995/96 contract year. The funding recommendation represents a 2.0% decrease over the current year’s allocation in anticipation of aHUD funding reduction for the CDBG program. INNOVATIVE HOUSING - Supportive Shared & Transitional Homing 457 Kingsley Avenue, Palo Alto, CA 94301 2 Request $ 20,000 Current Funding $13,300 Recommendation $13,000 Description Innovative Housing maintains supportive shared and transitional housing programs which provide local affordable housing options for very low income persons and families. The majority of clients served by these programs are single parents and their children. Agency facilitates tenant rental stability and the development of greater independence through skill building workshops, intensive supportive services, and individualized case management when needed. Environmental Not a Project under CEQA. Recommendation Current contract objectives were met or exceeded. For the period July 1, 1995 through December 31, 1995, 13 individuals, representing 6 family units, were supported in shared housing; 22 individuals were served in the transitional housing program. The agency has, however, been without the leadership of a Regional Director for approximately six months. Because strong, local leadership is considered vital to the success of the program, staff and the CAC would like to stress the importance of f’mding and retaining qualified program personnel. The funding recommendation represents a 2.0% decrease over the current year’s allocation in anticipation of a HUD funding reduction for the CDBG program. PALO ALTO HOUSING CORPORATION (PAHC) - Affordable Housing Information and Referral, Reprinting of the Affordable Housing Directory and Casework Counseling at the Barker Hotel 540 Cowper Street Suite G, Palo Alto, CA 94301 Funding Request $55,70~3 Current Funding $37,100 Recommendation $29,300 Description The mission of PAHC is to foster, develop, acquire, and operate low-income and moderate- income housing in Palo Alto. The funding requested is to provide support services which increase affordable housing opportunities in Palo Alto. The following categories of funding were proposed: Information and referral $18,700; Service Program Development for the proposed Single Room Occupancy (SRO) housing $10,500; Disability Access Assessment of PAHC properties $15,900; Counseling Services for Barker Hotel tenants $8,600; and Reprinting of the Directory of Housing Services $2,000. Envirortrn¢lalal Not a Project under CEQA. ReCQrrlm¢ndation Current contract objectives are being met. A new brochure is in the planning stage, and the housing.directory is being updated. 957 information and referral calls have been answered, and the property management system is 85 percent completed. The recommendation is to fund the following categories of services: $18,700 for affordable housing information and referral, $2,000 to update and publish the housing directory; and $8,600 for the Barker Hotel service component. ’ The information and referral program and the availability of the affordable housing directory greatly benefit low income housing seekers. The supportive counseling program at the Barker Hotel is vital to the success of the Barker Hotel Project. It provides affordable, stable housing for very low income, often fragile persons who might be previously homeless, in a recovery program, or have mental or physical disabilities. Prior to the acquisition and rehabilitation of the Barker Hotel by PAHC, staff from the Urban Ministry of Palo Alto (UMPA) conducted the counseling and outreach program at the Barker Hotel. Due to UMPA’s staff’mg and f’mancial issues, these services were not continued when the Barker reopened in January, 1995. Because the Counseling was seen as critical tothe tenants on the human level, and critical to the stability and. operation of the hotel on a property management level, PAHC has provide the counseling service since that time. Staff and the CAC support PAHC’s proposal to provide this service, and encourage them to continue to work with UMPA towards a mutually satisfactory arrangement in the best interests of the Barker tenants and other members of the unhoused community. Staff and the CAC did not recommend funding for the SRO service component due to the timing of the project itself. The potential project currently contains too many unknowns to tie up the public service funds. It was also felt that the limited public service funds should not be used to fund an accessibility survey which would not address an actual problem. 5. URBAN MINISTRY OF PALO ALTO (UMPA) - Services for the Homeless P. O. Box 213, Palo Alto, CA 94302 Funding Request $62,500 Current Funding $60,000 Recommendation $58,000 4 Description 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. Environmental Not a Project under CEQA. Recommendation Current contract objectives are being met with the exception of the clothes closet which still does not have a permanent space from which to operate. For the period July 1, 1995 through December 31, 1995, 76 persons were served by the rotating church shelter program representing 2,670 bed nights. The average daily attendance at the Drop-In Center was 77 persons, and 12,600 sacks of groceries were distributed. 25 persons were contacted to begin the Recovery Program, forming an initial group of 5 members. Staff and the CAC recommend funding at the level of $58,000. This amount represents $7,500 for audit costs as requested (a dual audit is anticipated for 1996/97 to accommodate a change to a July 1, fiscal year), and a slight decrease in current administrative funds to reflect the fact that the counseling service at the Barker Hotel will be provided by another entity. Additionally, the scope of services will be revised to reflect the fact that funding is being provided for specific UMPA programs which deal with basic needs, such as the provision of food and shelter. Although UMPA is the only local provider of essential services for the unhoused and very low income community, staff and the CAC are concerned that weak administrative and f’mancial management practices are having a negative impact on the availability of resources and direct services to this population. A succession of staffing changes coupled with decreases in funding have exacerbated UMPA’s organizational problems. The attached letter from the CAC represents an effort to address the situation by assimilating current information received from some members of the unhoused community, from UMPA’s most recent audit (calendar year 1994), and from the Board and Management of UMPA directly. Staff has also contacted HUD field office staff in San Francisco to request the provision of federal technical assistance directly to the Urban Ministry. The hope is that this assistance ¯ will enable UMPA to continue to establish and improve upon administrative systems and to remain an eligible subrecipient of federal funds. OUTREACH AND ESCORT, INC. - Special Needs Transportation 97 East Brokaw Road, Suite 140, San Jose, CA 95112 Funding Request $8,000 Current Funding $4,000 Recommendation $6,000 Description 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. Environmental Not a Project under CEQA. Recommendation Currem contract objectives are being met. 579 rides were subsidized during the first six months of the current fiscal year. Due to the limited funds available, Outreach has carefully screened potential beneficiaries through local public service agencies. It is anticipated that the levels keep increasing as word of the program spreads. Staff and the CAC recommend an increase in the amount of subsidy funds available due to the need to provide for additional rides for those in desperate circumstances (i.e. undergoing dialysis or chemotherapy). Although the Red Cross provided some of these rides in the past, they are no longer able to handle this type of transportation request. SANTA CLARA COUNTY BAR ASSOCIATION LAW FOUNDATION - Mental Health Advocacy Project 111 West St. John Street, Suite #315, San Jose, CA 95113 Funding Request $13,000 Currem Funding -0- Recommendation -0- Description The Memal Health Advocacy Project provides legal advocacy on behalf of mentally or developmentally disabled residents of Santa Clara County in the areas of care and treatment, education, employment, housing, consumer rights, and f’mancial benefits. The proposal requests funds to assist mentally disabled residents of Palo Alto in preventing homelessness through legal advocacy, counseling, training, technical assistance, and coordination with other service providers. 6 Environmental Not_a Project under CEQA. Recommendation Staff and the CAC do not recommend funding for this project due to the limited available funding. Additionally, this project appears to duplicate some of the services available through other local non-profit agencies. 8. COMMUNITY SERVICES AGENCY OF MOUNTAIN VIEW - Alta Vista High School Case Management 204 Stierlin Road, Mountain View, CA 94043 Funding Request $50,000 Currem Funding -0- Recommendation -0- Description The Community Consortium Project is seeking funding to provide for the needs of at-risk students at Alta Vista alternative High School in Palo Alto. The application describes a consortium consisting of Community Services agency of Mountain View (C.S.A.), Community Health Awareness Council (CHAC), and local businesses who will all provide pieces of a coordinated, integrated Program designed to help low-income, at-risk students and their families. The program seeks to serve between 40 and 70 Palo Alto teenagers who are unable to function in the local high school settings. A high percentage of the children have adopted lifestyles which include gangs, alcohol or drugs, anti-social behavior, truancy, and teen pregnancy as ways of coping. Funds would be used to provide case management services designed to assess the student needs, provide counseling with the student and the family, when necessary, and to support and encourage academic progress. Environmental Not a Project under CEQA. Recommendation Staff and the CAC are very supportive of the goals of this program. Funding is not recommended, however, due to the limited available funding and the fact that housing related activities remain the highest priority in the Consolidated Plan for the expenditure of CDBG funds. t SANTA CLARA VALLEY MULTI-SERVICE CENTER - Project SHARE Homeless Services P. O. Box 1306, San Jose, CA 95109 7 Fundin~ Request $3,614 Current Funding -0- Recommendation -0- Description The SCV Multi-Service Center was incorporated in 1991 in response to the need to track shelter bed availability on a County-wide basis, and to develop a system for improving communication, coordination, and resources for the homeless population. The agency’s programs coordinate and support the efforts of other nonprofit agencies serving the homeless in Santa Clara County. Project SHARE provides access to voicemail technology for homeless individuals to assist in their search for housing, employment, or in securing appointments for medical treatment or other services. This request is to provide voicemail to clients of Innovative Housing, and fora two percent share of the cost of providing the shelter hotline number. Environmental Not a Project under CEQA. Recommendation Staff and the CAC do not recommend funding for this program. It was felt that the voicemail service would be valuable if coordinated with and available to clients of the Hotel de Zink rotating church shelter program. However, until and unless the Urban Ministry is in a position to coordinate and take on the administration of a new services, it does not seem viable. 10.WINN, WOMEN IN NEED NOW - Family Day Care Apprentice Program 19925 Stevens Creek Blvd., Cupertino, CA 95014 Fundin~ Request $135,000 Current Funding -0- Recommendation -0- Description WlNN proposes to create a pilot vocational program which would provide technical skills for low-income individuals intending to enter the child care field. The proposal requests funding for subsidized employment training in a family day care home as well as classroom instruction. The program would provide for the long-term and short-term economic needs of the student, and the student’s child, if applicable, as well as benefit the day care provider where the training will occur. Environmental Not a Project under CEQA. Recomrncndation Staff and the CAC do no recommend funding for this project. The amount of money requested is too large a commitment to an agency which does not have a proven track record, and for a program which is not a high priority in the Consolidated Plan. ADMINISTRATION 11.CITY OF PALO ALTO - DEPARTMENT OF PLANNING AND COMMUNITY ENVIRONMENT Program Administration/Project Delivery 250 Hamilton Avenue, Palo Alto, CA 94301 Funding Request Currem Funding Recommendation $180,000 ($140,000 admin; $40,000 project delivery) $179,725 $180,000 Description Funding is for administrative management of the CDBG program and to provide project delivery services to bring the proposed public service, public facility and housing production or rehabilitation projects to completion. Funds will be used for administrative costs associated with the overall managemem, coordination, monitoring and evaluation of the CDBG Program as well as activities such as data gathering, studies, analysis, plan preparation, and the idemification of actions for implementation of plans. Environmental Not a Project under CEQA. Recommendation Recem and amicipated changes to HUD programs and systems have increased and will continue to increase the amount of staff time spent on learning new regulations and technology, and on preparing the required plans and reports. A newly required on-line accounting and reporting system (IDIS) is expected to be implemented next fiscal year. The additional administrative work has created a backlog of public facility and housing rehabilitation projects. It is anticipated that up to $8,000 of the budgeted funds will be expended on contract services to provide assistance in completing the projects. Full funding is recommended. The program administration budget has remained virtually unchanged since 1992/93. 12.MID-PENINSULA CITIZENS FOR FAIR HOUSING (MCFH) - Fair Housing Services 457 Kingsley Avenue, Palo Alto, CA 94301 Funding Request $20,089 Current Funding $16,275 Recommendation $19,000 Description Agency provides investigation, counseling and legal referral for victims of housing discrimination as well as community outreach and education regarding housing rights. MCFH serves the mid-peninsula area from Redwood City through Cupertino/Sunnyvale and Fremont. MCFH seeks to reduce discrimination in housing and provide redress for those who have been discriminated against. Environmental Not a Project under CEQA. Recommendation Current contract objectives are being met. During the first six months of the 1995/96 fiscal year, the agency investigated 9 fair housing complaints, and provided 18 telephone consultations. MCFH also helped provide information for the City’s Analysis of Impediments to Fair Housing Choice, and has served as a resource on discussions relating to escalating rents. Staff and the CAC recommend funding at an increased level to support MCFH’s proposal for increased outreach activities including a special fair housing training and an educational video for cable TV. PUBLIC FACILITIES AND IMPROVEMENTS 13.PENINSULA CHILDREN’S CENTER ~CC) 3860 Middlefield Road, Palo Alto, CA 94303 Energy Efficiency Electrical Retrofit Funding Request $20,000 Recommendation -0- Description PCC provides services to children and adolescents with emotional and behavioral problems. They conduct mental health and special education school/day programs as well as outpatient mental health services. PCC provides a residential living facility for adolescents in Mountain View facility, but recently closed the Palo Alto "Moving On" group facility. PCC has merged with another non-profit community organization, Zonta, to form PCC/Zonta. This 10 funding proposal is to upgrade the electrical and lighting systems in the offices and classrooms of the organization’s Middlefield Road facility. Environn~ental Categorically exempt under section 15301 of CEQA, minor change to existing facilities. Recommendation Staff and the CAC do no recommend funding this project. priority needs as established in the Consolidated Plan. This project did not address HOUSING..... PRODUCTION/HOUSING REHABILITATION 14.SENIOR COORDINATING COUNCIL 450 Bryant Street, Palo Alto, CA 94301 Senior Home Repair Program Funding Request $12,000 Current Funding $11,000 Recommendation $12,000 Description This program provides subsidized home repair services to income eligible Palo Alto homeowners who are 60 years of age or older. The program enables seniors to remain in their own homes as long as possible, and helps to maintain the quality of the existing housing stock within Palo Alto. Funds are used to provide subsidies for those unable to pay the fee for service. The program addresses the health, safety and housing needs of the low income senior population. Environmental Environmental assessment (78-EIA-10) approved by Council. Implementation of project was found not to be significant.Continued funding does not represent a change in the environmental assessment. Recommendation Current contract objectives have been met. Staff and the CAC recommend full funding for this program which addresses the health, safety and housing needs of low income senior homeowners. 11 15.CITY OF PALO ALTO - DEPARTMENT OF PLANNING AND COMMUNITY ENVIRONMENT 250 Hamilton Avenue, Palo Alto, CA 94301 Housing Development Fund Funding Request $500,000 Current Funding $351,200 Recommendation $346,512 Description The purpose of the Housing Development Fund is to assist in the development of a variety of housing projects which will provide affordable housing to low and very low income families, disabled, and single persons. Funds may be used for predevelopment expenses, acquisition of land or existing buildings, rehabilitation costs or other CDBG eligible expenses. The Housing Development Fund was created to provide funds on an ongoing basis to actively facilitate the development, rehabilitation and preservation of low income housing in Palo Alto. Housing development opportunities occur throughout the year and due to the nature of the real estate market, a quick response is frequently necessary. The City will administer the fund and work closely with nonprofit housing developers and supportive housing providers on project proposals in order to increase the supply of affordable housing in Palo Alto. The Housing Development Fund will include funds from several sources primarily CDBG, City Housing Reserve and HOME funds. Each funding source is accounted for separately. Staff will return to Council for approval for funding of specific projects from the Funds. Funding during 1996/97 may be needed for projects such as: SRO apartments on Alma (new construction, 106 units); Housing for Developmentally Disabled (new construction, 24 units); the 651 Hamilton BMR requirement (leverage for units in excess of the approximately required units). The CDBG fund has a current balance of approximately $625,000, and the housing mitigation fund has a balance of approximately $475,000. There are no HOME funds available. Environmental Prior to development of specific applications, complete environmental records, satisfying HUD and CEQA requirements, will be prepared. Recommendation Staff and the CAC recommend funding at the $346,512 level. The City of Palo Alto Consolidated Plan and the Housing Element both emphasize the great need for affordable housing for low and very low income households in Palo Alto. 12 16.MID-PENINSULA HOUSING COALITION (MPHC) 658 Bait Island Road, suite 300, Redwood City, CA 94063 Palo Alto Housing for Developmentally Disabled, Page Mill/Ash, Palo Alto Fundin~ Request $711,000 Recommendation $711,000 (from existing housing development fund resources: $411,000 from the CDBG housing development fund, and $300,000 from the Industrial Commercial Housing In-Lieu Fund). These allocations will require further council action at a later date. Description This project proposes to construct a new 24-unit residential development in Palo Alto for developmentally disabled adults who are capable of independent living. The project location is the .75 acre parcel at the comer of Page Mill and Ash in Palo Alto. MPHC has an option agreement to purchase the land from the County of Santa Clara, and has received an award of HUD Section 811 funds which will provide both a capital advance and operating assistance. The development concept features three building clusters with all entries internali~.ed off of small building courts. One and two-bedroom units are planned, with common areas which include a laundry room, a meeting/entry area, counselor’s room, public restrooms, a manager’s office, and a community room with a kitchen for social events and educational activities. Environmental An environmental assessment recommending a mitigated negative declaration (96-E1A-3) has been prepared for the project and is currently being reviewed with the project application by the Architectural Review Board, the Planning Commission and the City Council. Recommendation Staff and the CAC recommend funding for this project. It is consistent with the Consolidated Plan’s emphasis on affordable housing needs. These funds are being leveraged with the HUD 811 award, as well as with funds from other Santa Clara County jurisdictions who have been asked to participate in funding. 17. INNOVATIVE HOUSING FOR COMMUNITY (ll-l) 2171 East Francisco Blvd., Suite L, San Rafael, CA 94901 Rehabilitation of Shared Transitional House at 2800 Illinois St., East Palo Alto 13 Fundin~ Request $21,000 Recommendation $21,000 Descripl;i0n Innovative Housing’s transitional housing program provides low income individuals and families with up to two years of rent-subsidized housing and the supportive services needed to transition into permanent housing. The four bedroom single family residence on Illinois Street in East Palo Alto provides affordable housing and supportive services for four formerly homeless single parent families and their children. The project beneficiaries include individuals in recovery from substance abuse, women fleeing situations of domestic violence, children and youths who are members of at-risk families, individuals with physical and mental health disabilities, and persons living with AIDS and HIV. The property is owned by IH and was purchased in 1991 with the help of Palo Alto CDBG funds. The project requests rehabilitation costs to repair and improve the residence. The total project costs are estimated at $41,800 and include repaving the walkway and driveway, repairing the brick and stucco exterior, creating a children’s play area, upgrading the kitchen and laundry room, and other miscellaneous repairs. Environmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Staff and the CAC recommend funding for this project since it will retain needed affordable housing for a very vulnerable group. Innovative Housing has leveraged the CDBG funds by requesting funding for the other half of the project from other sources. 18. COMM-I.INITY HOUSING, INC. 656 University Avenue, Palo Alto, CA 94301 Project Title Air conditioning for Lytton Gardens I Fundin~ Request $81,056 Recommendation ~0- Description Community Housing, Inc. owns and manages Lytton Gardens I, a 268 unit residential facility providing subsidized housing for low income seniors. This proposal requests funding for an air conditioning system to cool the hallways and other common areas of the building during periods of extreme heat. 14 19o 20. Environmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Staff and the CAC do not recommend funding for this project. Although the high temperatures are most certainly a problem for the elderly residents, there was no indication that the solution proposed would alleviate the problem for the tenants. The proposal suggested that the hallways be cooled and that residents could then open their doors to bring the cooler air into their units. It was felt that some type of independent analysis should be conducted by a HVAC specialist to de.termine the most effective and appropriate way to cool the units. There was also no indication that the estimates included the required prevailing wage rates, which could substantially increase the cost. PALO ALTO HOUSING CORPORATION (PAHC) 540 Cowper Street, Suite 201, Palo Alto, CA 94301 Arastradero Park Apartments Water Replacement System, 574 Arastradero Rd. Funding Request $286,380 Recommendation $286,380 Description PAHC seeks funding to replace the water supply pipe system at the Arastradero Park Apartments. The 66 unit family complex was acquired by Arastradero Park Apartments Corporation (APAC), an affiliate of PAHC, in 1995. The complex was a HUD Section 236 subsidized project in danger of converting to market rate housing. The project contains one, two, three and four bedroom apartments providing affordable housing to small and large families. This proposal is to replace and correct the water supply system which is clogged and corroded, and presents severe water pressure problems. Environmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Staff and the CAC recommend that this project be funded. PAHC has explored other options, but it doesn’t appear that the water supply problem can be resolved by other means. Replacement of the entire system appears to be the most prudent course of action. PALO ALTO HOUSING CORPORATION 540 Cowper Street, Suite 201, Palo Alto, CA 94301 15 Emerson North Apartments Rehabilitation, 3051-3061 Emerson Street Request $69,300 Recommendation $69,300 Description PAHC seeks funding for a housing rehabilitation project at Emerson North Apartments. The six studio unit complex was purchased in 1994. It provides permanently affordable rental housing to small (one or two person) households. City Housing Reserve funds were used for the purchase. Low rent levels were established as. part of the financial analysis with the understanding that the City would assist in needed rehabilitation efforts with CDBG or HOME funds. The project includes extensive walkway and paving repairs, repair of dry rot damage, replacement of deteriorating wooden windows, painting, electrical upgrades, appliance and other necessary replacements. Environmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Staff and the CAC recommend funding for this project. Rehabilitation work will address priority rental housing rehabilitation needs in the Consolidated Plan and provide the rehabilitation assistance Council intended when the acquisition was approved. 21. PALO ALTO HOUSING CORPORATION 540 Cowper Street, Suite 201, Palo Alto, CA 94301 Waldo Apartments Rehabilitation, 3030-3049 Emerson Street Funding Request $49,171 Recommendation -0- Description PAHC seeks funding for a housing rehabilitation project at the Waldo Apartments. This is a six unit property of one and two bedroom units. Four of the units are subsidized and two are rented at market rates. The project includes re-roof’mg, paving and painting, and other miscellaneous replacements. Additionally, the project seeks funds to ref’mance the loan at more favorable rates. 16 22. Environmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Staff and the CAC do not recommend funding for this project. PAHC recently indicated that the refinancing costs would not be necessary, since the prepayment penalty was no longer an issue. PAHC should reconsider the rehabilitation work in light of the new income and expense proforma using the lower interest rates. PALO ALTO SENIOR HOUSING PROJECT, INC. (STEVENSON HOUSE) 455 E. Charleston Rd., Palo Alto, CA 94303 Roof’mg of Buildings A and B Request $110,000 Recommendation -0- 23. Description Stevenson House is a senior residential facility providing 109 units of affordable housing for approximately 135 independently functioning, older adults. Funds are requested to re-roof two of the three buildings in the complex. E~virQnmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Staff and the CAC do not recommend funding for this project due to the limited available funding through the CDBG program. The urgency of this project was not considered as high as the other projects recommended for funding. SOCIAL ADVOCATES FOR YOUTH 1072 Saratoga-Sunnyvale Road, #A-208, San Jose, CA 95129 Rehabilitation of CASA-Say Group Home at 509 View St., Mountain View, CA Fundin~ Request Recommendation $5,000 $5,000 (from current year contingency funds) 17 Description This request is for an additional $5,000 for the rehabilitation project at the agency’s runaway/homeless youth shelter. $20,000 in CDBG funds have been allocated to this project in previous grant years. Due to a number of problems, the cost of the rehabilitation increased dramatically. After this application was received, it was noted that the additional funds were needed prior to the beginning of next fiscal year. Environmental Categorically exempt under Section 15301 of CEQA, minor change to an existing facility. Recommendation Based on the special project circumstances, and the urgent need of the project to continue on schedule, the City Manager approved the additional expenditure from current funds in the contingency account. A separate informational CMR is being prepared for Council explaining the expenditure in more detail. Staff and the CAC support this action. 24°EMERGENCY HOUSING CONSORTIUM (EHC) P. O. Box 2346, San Jose, CA 95109 New Regional Emergency Shelter and Reception Center for the homeless at 2011 Little Orchard Street in San Jose. Funding Request N/A Recommendation Support Description This application is an update on the proposed regional shelter and reception center to serve homeless persons in the San Jose area. The Palo Alto City Council allocated $50,000 in fiscal year 1994/95 CDBG funds for the acquisition/rehabilitation of a 250 bed facility be located at 1020 Timothy Drive in San Jose. The reception center is intended to replace the beds which will be lost when the National Guard Armories close in 1997. However, in response to neighborhood and community concerns, the Mayor of San Jose convened a working group to develop criteria for the siting of emergency shelters within the City. The working group established a criteria that would allow up to 125 beds of emergency shelter with the option to increase the number of beds to 250 during the winter months, or as deemed necessary by the City. The Timothy Drive site was replaced by a proposed site at 2011 Little Orchard in San Jose which fits the established siting criteria. EHC has requested that the Palo Alto CDBG funds provided for the Timothy Drive site in 1994/95 be reprogrammed to the Little Orchard site. The 2.44 acre site is under contract, and EHC is in the process of applying for a Conditional Use Permit (CUP). There is a single story, 35,220 square foot 18 building on the property which will need to undergo rehabilitation. The total project cost, including acquisition and rehabilitation, is estimated to be $3,844,000 Environmental The City of San Jose is the lead agency on this project and is in the process of preparing the environmental documentation. .R. ecommendal;i0n Staff and the Citizens Advisory Committee support the application to transfer the $50,000 to the site at 2011 Little Orchard Street in San Jose subject to compliance with all federal regulations, a favorable appraisal, appropriate zoning and environmental assessments, and the approval of the City of San Jose as the lead CDBG agency. 19 ATTACHMENI C To:Palo Alto City Council Urban Ministry of Palo Alto Board of Directors From:CDBG Citizens Advisory Committee Date:March 7, 1996 Re:Urban Ministry of Palo Alto CDBG Funding Request -- 1996-97 The Urban Ministry of Palo Alto (UMPA) has applied to the City of Palo Alto for a $62,500 Community Development Block Grant (CDBG) for 1996-97. UMPA has previously received similar grants from the City, including a $60,000 grant for 1995-96. This Committee recommends that this year the City grant to UMPA $58,000 from the City’s CDBG funds, but that the City (1) place strict limits on the use of these funds and require that immediate steps be taken to improve the organization’s financial administration before any funds are disbursed, and that (2) UMPA’s board of directors pursue additional substantial reforms before the City provides grants in future years. We make these recommendations mindful of the high regard that the Palo Alto community has for UMPA, the value of UMPA’s services for those who are unhoused or in poverty, and the hard work and goodwill of UMPA’s board, staff and volunteers. We hope these recommendations help UMPA, just as UMPA helps those it serves. Our Committee is not the appropriate forum for addressing all of the issues surrounding both UMPA’s work and homelessness and poverty in Palo Alto. Beyond fulfilling our CDBG advisory role, we hope that our recommendations contribute in a positive way to the larger community discussion of these issues. We expect that discussion to be carried forward by UMPA, its clients, its funders, the Homelessness Task Force, the Human Relations Commission, the City Council; non-profit service providers, religious institutions, the business community, the press, and interested community members. I. Limits on CDBG Grant This Committee recommends a "back to basics" grant for UMPA to use primarily to meet the immediate needs of its clients. The money should be distributed only after the City is assured that the funds will be administered properly. A. Use of the Grant Two-thirds of the grant shall be used to fund the purchase and distribution of tangible goods -o food, clothing, bus passes, toiletries, towels, storage lockers - to UMPA clients. No more than one-third of the grant shall be used to fund administration, overhead, or programs that reach beyond immediate needs. The purposes of this limitation are: 1. To have UMPA better meet the immediate needs of its clients; 2. To focus UMPA on the need to pay better attention to the small but essential details of delivering critical goods and services; 3. To restrict funding for staff and program activities that are in greatest need of reform. The two-thirds portion of the grant may also be used to set up systems that help IYMPA deliver tangible goods, as well as services for which t.here is an immediate need. For example, a clothing donation drop-off site and an improved system for clients to receive messages have been suggested by UMPA clients. While a need continues to exist for job-training, counseling, recovery programs and other long-term solutions to homelessness and poverty, we believe that UMPA needs first to do a better job of meeting the daily living needs of its clients and to improve its operations. B. Organizational Improvements Required for Funds Dispersal The CDBG funds should not be released to UMPA until it has hired a competent financial administrator and made significant progress towards improving its financial practices, as determined by the City’s CDBG Coordinator. Each month UMPA shall provide to the City a copy of its monthly financial statement. UMPA’s financial management systems are in disarray. The letter dated February 7, 1996 from UMPA’s 1994 auditors made 24 specific suggestions for change. We urge IYMPA to implement these changes as soon as possible. The auditor expressed the verbal opinion that UMPA’s financial practices have been sloppy but not dishonest. UMPA must work quickly to restore the trust of the City and its other funders in UMPA’s ability to manage and spend its money effectively. 2 II. Organizational Improvement To remain competitive to receive CDBG funding from the City in future years, we strongly urge UMPA to improve its operations by undertaking the following reforms, in the order listed: 1. Board Development -- Every UMPA board member clearly brings to his/her service a sincere commitment to the issues UMPA addresses. Their willingness to volunteer.deserves the grateful thanks of the entire community. The need is to add more sophisticated capacity to lead and Oversee a non-profit corporation with an annual budget of over a half million dollars. Existing board members should receive training in the basics of non- profit board service: accounting, law,., program development, fundraising, staff supervision, and communication. In particular, the board president must be able to .communicate with UMPA clients, funders, his fellow board members, the public, and the press with care and finesse. New board members should be recruited who have relevant business and non-profit management experience. 2. Mission State~!~4nt -- Once the board has been strengthened, UMPA should revisit its missiov:-~.~tatement. Originally a ministry that operated a limited drop-in service, ~UMPA has grown into a more full-service social service agency. What is its appropriate role? The board’s answer will give needed guidance to UMPA’s programs and budgetary decisions. 3. Programs -- UMPA’s programs should be structured to pursue directly the mission defined by the board. While the staff wil! in most instances develop the detailed content of the programs, the board must make sure that the programs remain consistent with the mission of the organization. 4. Staffing -- Once the strengthened board has clarified UMPA’s mission and programs, it should then re-evaluate its existing staffing structure. Have the appropriate positions been defined? Are the appropriate people, with the appropriate skills, filling those positions? The board must answer these questions for itself, and act on its answers. 5. Relationships -- A revitalized UMPA should pay particular attention to the quality of its relationships with both its clients and other agencies whose services could help UMPA clients. A regional approach to issues of homelessness and poverty should improve service delivery, provide cost savings, and improve the chances for long-term solutions to clients’ problems. 3 CITY OF PALO ALTO Housing and Community Development DRAFT 1996/97 ACTION PLAN Annual Update of the City’s Consolidated Plan for the Period July 1, 1995 to June 30, 2000 Public Review Period: March 29, 1996 - April 29, 1996 Prepared by Department of Planning & Community Environment 250 Hamilton Avenue Palo Alto, California 94301 Ken Schreiber, Director For Information, Contact: Suzanne Richards Planning Division, City of Palo Alto (415) 329-2428 CITY OF PALO ALTO FISCAL YEAR 1996/97 ACTION PLAN ANNUAL UPDATE TO TI-[E CITY’S CONSOLIDATED PLAN FOR THE PERIOD JULY 1, 1995 TO JUNE 30, 2000 This Action Plan presents the activities which the City of Palo Alto anticipates undertaking in the 1996/97 fiscal year with funds received through the Community Development Block Grant (CDBG) Program. These activities are intended to meet Palo Alto’s affordable housing and community development needs describ.ed in the Consolidated Plan. The Action Plan also describes the activities which the City plans to undertake to affirmatively further fair housing choice. Federal Resources Due to the federal budget impasse in Washington, D.C., the amount of CDBG grant funds available to Palo Alto for fiscal year 1996/97 is not yet known. As of this writing, House and Senate Conferees are negotiating on a Continuing Resolution (CR) in the absence of an approved FY96 appropriations bill. The current CR is set to expire on March 29, 1996. In order to proceed with the CDBG funding process, however, certain assumptions had to be made. The following recommendations are based on an estimated six percent reduction in the amount of the 1996/97 grant from the 1995/96 grant, which was $822,000. This "best guess" estimate is based on the overall 1996 federal appropriation for the CDBG pro~am being the same as the 1995 level of $4.6 billion, and taking into consideration added entitlement jurisdictions and program set- asides. For purposes of determining the funding allocations and the applicable program funding cap calculations, the entitlement grant for 1996/97 is estimated to be $772,680. In addition to the grant, it is estimated that $60,000 in Program Income will be available in 1996/97. Program Income is defined as income directly generated from the use of CDBG funds. The main sources of funds are from payments on loans made with CDBG funds, or from rental income in excess of expenses on property acquired or improved with CDBG funds. The majority of CDBG Program Income is received from loan repayments under the City’s former Housing Improvement Program (HIP) single family rehabilitation program. Additionally, $200,000 in program income, previously received but not allocated, is available for programing. The amount represents actual program income received in excess of estimated projections for past years. Also available is $31,212 for reallocation from previously allocated funds which were not used. The majority of the unused funds was surplus funds set aside for the Arastradero Park Apartments acquisition. The total estimated 1996/97 CDBG funds are as follows: FY 1996/97 CDBG allocation (est 6 % reduction) 1996/97 Program Income (est) Program Income received in prior years Reallocation of previously allocated, but unspent fund $772,680 60,000 200,000 31,212 $1,063,892 Local Resources: The primary local housing resource available in the City of Palo Alto is the City’s Housing Reserve. The Housing Reserve has two components, the "Commercial Housing In-Lieu Fund", and the "Residential Housing In-Lieu Fund". The Reserve can be used for acquisition, rehabilitation, new construction and predevelopment of low income housing. The Commercial Fund is directed towards providing additional affordable housing units for Palo Alto’s work force. The Residential Fund can be used for any type of low income housing. The "Commercial Housing In-Lieu" fund is funded with housing mitigation fees required from developers of commercial and industrial space. The fund currently has about $475,000 available for new projects. The "Residential Housing In Lieu" fund is funded with mitigation fees provided under the City’s Below Market Rate 03MR) Housing program from residential developers. This fund presently has a very small balance. Leveraging and Matching Requirements: The City of Palo Alto will leverage federal and private housing funds to the greatest extent feasible consistent with the goals identified. The City will encourage housing project sponsors to seek private financing and private grants. The City will also utilize its’ local housing reserve fund, as appropriate, to leverage federal and private housing funds. It is anticipated that the City will again apply for HOME funds during the 1996 funding round. Staff will evaluate the readiness of particular projects, as well expected changes to the State HOME Program at the time the next round of funding is announced. An application will be submitted if there seems to be a reasonable likelihood of an award. If the City is awarded FY 96 HOME funds through the State of California, the City will utilize its local housing reserve funds as the required match. 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, will also be used as a portion of the matching requirement for federal housing programs (for example, Shelter Plus Care). 2 LOCAL PUBLIC AND PRIVATE RESOURCES FOR AFFORDABLE HOUSING Activity: LOCAL, PUBLIC: Comm. Hsg In- Lieu Fund Residential Hsg. In-Lieu Fund City owned land MCC Program Housing Bond Trust Fund County Dept of Social Services PRIVATE RESOURCES: BMR Rental & Owner Program Private Lenders: AHP Nonprofit Developers Private Foundations & Churches New Home Buyer Rental .Homeless Homeless Acquisition Rehabilitation Construction Assistance Assistance Assistance Prevention X X X X X X X X X X X X X x X X X X X X X X X X X Priority Housing Needs The City of Palo Alto Consolidated Plan and Housing Elements both emphasize the great need for affordable housing for low and very low income households in Palo Alto. While all types of housing are needed in the City, the Consolidated Plan objectives focus on the creation and preservation of rental housing, with an emphasis on housing for singles and very small households who are homeless, at risk of homelessness or of very low and low income, housing for persons with special needs and housing for families with children. Housing Development Fund: Purpose and Operations The purpose of the Housing Development Fund is to have funds available on an ongoing basis to utilize when necessary to facilitate the development, rehabilitation and preservation of low income, multifamily housing. Housing development opportunities come up throughout the year and, due to the nature of the real estate market, a quick response is frequently necessary. The Housing Development Fund includes housing funds from several sources, primarily the CDBG Housing Fund, the City Housing Reserve (with the commercial and residential components), and HOME trust funds. Each funding source is accounted for separately. The City works closely with locally active nonprofit housing developers and supportive housing providers on project proposals. The actual process for initiating a project will vary depending on the particular circumstances. Usually, 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. At other times, the City may issue a Request For Proposals. The City may provide funding from a variety of sources depending on the nature of the project. The Planning Department will present recommendations for each project together with a proposed funding package to the City Council for approval. In most all cases, funds will be provided as a loan. The loan will be secured by the property. The repayment terms and interest rate have to be tailored to the particular project since low income housing typically is financed from multiple sources with specific requirements. Wherever possible, the City will attempt to obtain a repayment of its funds at some point in the future. 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. The projects which may need funding from the Housing Development Fund during FY 96-97 are: IProjectActivityNumber of Units ] Single Room Occupancy (SRO) Apartments at New construction About 107 units 725-753 Alma St. Housing for Developmentally Disabled at Page New construction About 24 units .Mill and Ash Mitigation Project for 651 Hamilton Acquisition and 7 or more units rehabilitation Feasibility, Site Acquisition for New construction Estimated Family Apartments 30+ units Miscellaneous Expenses Related to N/A N/A Site and Project Feasibility Emergency Rehabilitation Loans for Rehabilitation As needed basis Single Family Owners Miscellaneous Costs Related to Site and Project Feasibility: CDBG Housing Funds may also be used to pay for costs associated with the investigation of the feasibility of sites and properties for acquisition by the City or nonproflts 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. Funds may be used for emergency loans for single family rehabilitation, even though the City no longer has an active single family rehabilitation loan programs. 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 intent is only to provide financial assistance to income eligible homeowners who’s homes have serious building code deficiencies and who have no other resources to undertake repairs. Funds may also be needed for other housing projects not presently known which meet the housing needs identified in the Consolidated Plan. CDBG funds are a vital part of the financing package for low income housing development projects. They are an important source of funding for the earlier phases of a housing project. CDBG funds are a fairly flexible source for predevelopment and acquisition costs. Nonprofit housing .developers typically need CDBG funds to complete preliminary architectural and environmental studies to determine the feasibility of a proposal. This work must be done in order to obtain federal and state f’mancing 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. 1996/97 Activities to be Undertaken It is anticipated that approximately $711,000 in City funds will be needed to leverage additional funds for theMid-Peninsula Housing Coalition’s (MPHC) project, Housing for the Developmentally Disabled. The CDBG Housing Fund will contribute $411,000 in CDBG funds allocated in previous years, and $300,000 will be taken from the Commercial Housing In-Lieu Fund. The project will provide 24 new units of housing with supportive services for developmentally disabled adults capable of independent living. MPHC has an option to purchase the .75 acre parcel located at 2700 Ash Street in Palo Alto from the County of Santa Clara. MPHC has also received an award of HUD Section 811 funds which will provide both a capital advance and operating assistance. The attached chart summarizes the activities to be undertaken during the 1996/97 fiscal year with CDBG funds, and the attached Table provides specific information on each project. 1996/97 Homeless and Other Special Needs Activities Emergency Shelter and 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 work with Urban Ministry to provide opportunities for organizational capacity building in order to increase the level and quality of services available. Funds will be targeted to the provision of essential services such as food and the local rotating church shelter program. The City intends to expend the $50,000 in CDBG funds allocated to Emergency Housing Consortium in fiscal year 1994/95 for the acquisition and rehabilitation of a year-round homeless Reception Center at 2011 Little Orchard Street in San Jose. The Reception Center will replace the National Guard Armory cold weather shelter which has been ordered closed to the homeless after the winter of 1996. The site fits the shelter siting criteria established by the City of San Jose’s Working Group on Homeless Shelters. The City will continue working with the Santa Clara County Collaborative on Housing and Homeless Issues, and other local jurisdictions, to increase the number of shelter beds, especially year round beds, and to increase services available for homeless individuals and families. For 1996/97 Palo Alto City staff will serve on the Collaborative Executive Committee representing North Santa Clara County governmental jurisdictions. Homeless Prevention: Palo 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 Palo Alto area) which provides loans and grants to prevent households from losing their housing or defaulting on their home mortgage. Transition From Homelessness to Permanent Housing: The Barker Hotel, owned and operated by the Palo Alto Housing Corporation (PAHC), has 26 units of permanent 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. CDBG funding will be used to help fund the rehabilitation of a four bedroom single family transitional house at 2800 Illinois St., in East Palo Alto. Innovative Housing for Community, Inc. operates the program which provides low income individuals and families with up to two years of rent-subsidized housing and supportive services needed to transition into permanent housing. Other Actions The City of Palo Alto completed an Analysis of Impediments to Fair Housing Choice on February 6, i996. 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 remove barriers to affordable housing during the 1996/97 fiscal year: Fund the local fair housing agency, Mid-Peninsula Citizens for Fair Housing (MCFH) to reduce discrimination in housing by : 1.Investigating 15 cases of housing discrimination 2.Conducting 25 consultations with persons who believe they have been discriminated against " 3.Maintaining a pool of 50 testers for investigations and conduct 3 trainings 4.Maintaining a panel of 10-15 attorneys for referral and coordinate an annual meeting for participating attorneys 5.Running biweekly ads in the Palo Alto Weekly and daily ads in the San Jose Mercury News, and one display ad promoting fair housing. 6.Distributing 100 fair housing brochures 7.Running 20 public service announcements for local radio/TV broadcasts 8.Making 7 educational presentations to the community 9.Monitoring and reporting on four rental sites 10.Conducting a special educational symposium on discrimination against families with children to landlords with four or fewer units. 11. Providing an educational video on housing discrimination for cable TV. Continue to support the Human Relations Commission in their documentation and investigation of hate crimes, and in their support of diversity and disability issues. Continue to monitor the provision of fair housing services by MCFH to ensure that adequate services are being provided, and that services are provided in the most cost effective means. Continue the City’s funding support of affordable and supportive housing services which provide housing information and referral, tenant landlord mediation, and shared housing counseling. Geographic Distribution Housing Activities: The City will consider the provision of all types of housing assistance on a Citywide basis consistent with the policies of the City’s Comprehensive Plan. The City does not have specific target areas for housing activities but attempts to 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 7 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. Urgent Need Activities In the event of a local, state or federal disaster declaration for areas within the boundaries of the City of Palo Alto, the City reserves the right to use CDBG or other available federal funds to abate immediate and necessary hazards. Such funds may be used for staff efforts, loans, or outright grants to affected parties, as. approved by City Council and allowable under the pertinent Federal Guidelines. Monitoring of Activities The City will continue to monitor closely the activities carried out to further the goals of the Consolidated Plan. For all CDBG and HOME funded activities, an annual performance report will be completed in accordance with federal requirements detailing the dollars expended, the beneficiaries served, and the program goals achieved. Additionally, City staff will monitor each 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. 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 cities’ staffs better understand the County and nonprofit social service structure. 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 cities 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 also attend and participate in the semi-annual Human Services Provider Network meetings coordinated by the Human Services Division to promote understanding and collaboration among the local public service agencies. 9 ~ 0 0 u,- 0 0 0 u~- 0~L..~ ,- 0~.==I o "~ o tL,.J C E n.j o Q. ooco 0 © E z 0.- = oo3 .J ~0 o ~ 0 0 0ZZ Z o o o~- 0 c o o o Z ¯ LU n,n- (D 0 0 >-Z Z "~ <~< _.o ~ < o uJ o o~- 0 <0 ~ <