HomeMy WebLinkAbout1999-04-05 City Council (18)C ty
City of Palo Alto
Manager’s Report
TO:
ATTENTION:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
FINANCE COMMITTEE
3
CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
APRIL 5, 1999 CMR:189:99
PROPOSED FISCAL YEAR 1999/2000 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
ALLOCATIONS AND DRAFT ANNUAL ACTION PLAN
UPDATE OF THE CONSOLIDATED PLAN FOR THE PERIOD
1995 - 2000
REPORT IN BRIEF
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 program year 1999-2000. The City received 19 applications for funding totaling
$2,003,724. The amount available for allocation in program year 1999/00 is $924,000.
Attachment A summarizes the funding requests, and Attachment B provides an analysis of
specific funding requests and recommendations. Staff and the CAC did not concur on all
recommendations. The~ CAC recommendations are presented as alternatives to the staff
recommendations in this report.
RECOMMENDATION
Staffrecommends that the Finance Committee recommend to the City Council approval of
the following:
The funding allocations, as recommended by staff in Attachments A and B, be
included in the final 1999/00 Community Development Block Grant (CDBG) Action
Plan.
Staffbe authorized to submit to the Department of Ho~Jsing and Urban Development
(HL~), by the May 15, 1999 deadline, the Action Plan for the expenditure of
1999/00 CDBG program funds.
CMR:189:99 Page 1 of 7
The City Manager, on behalf of the City, be authorized to execute the 1999/00 HUD
application and Action Plan for CDBG funds, and any other necessary documents
concerning the application, and to otherwise bind the City with respect to the
application.
BACKGROUND :
The City of Palo Alto receives funds annually from HUD as an entitlement City under the
CDBG Program, authorized by Title I of the Housing and Community Development Act of
1974, as amended. The primary objective of the Act is "the development of viable urban
communities by providing decent housing and a suitable living environment, and expanding
economic opportunities, principally for persons of low and moderate income."
On December 13, 1993, the City Council adopted a Citizen Participation Plan which provides
for a nine-member CDBG Citizens Advisory Committee (CAC), selected by the Mayor. The
CAC process encourages public participation in the CDBG allocation process. To provide
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 CAC slots. This year’s Committee included: Jonathan Foster, Louis
Kavanau, Adele Khabbaz (HRC Liaison), Liza Kniss, Trina Lovercheck, David Negrin,
Sigrid Pinsky, Jennifer Rothstein, and Joe Villareal. Yrina Lovercheck was selected to be
the spokesperson for the CAC this year.
Applications for 1999/00 funding were mailed to more than 75 area housing and human
service providers on November 2, 1998. A notice announcing the availability of applications
for 1999/00 CDBG funding was also published in the Palo Alto Weekly on November 4,
1998. Completed applications were due by 5:00 p.m. on December 18, 1998.
All funding applications were reviewed by staff for compliance with Federal project
eligibility requirements. Additionally, all applications were evaluated based on the needs and
priorities identified in the City of Palo Alto’s adopted Consolidated Plan for the period
July 1, 1995 to June 30, 2000. The priority for creating and retaining affordable housing
remains the highest funding priority for the use of CDBG funds. The funding priorities used
for fiscal year 1999/00 are.summarized on Attachment C. The CAC held public meetings
on January 7, 12, 21, and 26, and February 4, 9, 18, and 22, 1999. Staff and the CAC
reviewed and discussed the funding requests, and interviewed all of the applicant agencies.
HUD regulations require that all activities must meet one of the three national objectives of
the CDBG Program:
1)Activities which benefit low and very low income persons. (For HUDpurposes, this
is defined as 64 and 50 percent of Santa Clara County median income, or $53,100 and
$41,300 respectively, for a family of four);
CMR: 189:99 Page 2 of 7
2)Activities which aid in the prevention or elimination of slums or blight; or
3)Activities which meet other community development needs having a particular
urgency or posing a serious and immediate threat to the health or welfare of the
community. -.
Palo Alto has historically expended all of its CDBG funds on projects benefiting low and
very low income persons.
The three primary CDBG program activity areas are:
Housing/Community, Development - Capital Improvements
The primary focus of the CDBG program is on capital projects or development
activities such as new housing, land acquisition, relocation, architectural barrier
removal, site clearance, housing rehabilitation, historic preservation, economic
development, or similar activities. There are no Federal funding limitations in this
category.
Public Services
Social service activities such as homelessness prevention, child care, senior services,
etc. may. be funded under this category. Federal regulations limit public service
funding to a maximum of 15 percent of the annual grant and program income. The
maximum funding in this category for fiscal year 1999/00 is $117,450. This is the
same amount that was available and allocated in fiscal year 1998/99.
Program Administration
The contract for fair housing services and City staff time spent on overall CDBG
program administration, affordable housing development, and various planning
studies are eligible for reimbursement under this category. Funding for 1999/00 is
limited to $156,600, or 20 percent of the grant and program income.
Draft 1999-2000 Action Plan
In accordance with HUD regulations, the draft 1999/00 Annual Action Plan (Attachment D)
must be available for a 30-day public.review and comment period. This year the comment
period begins on April 1, 1999, and ends on April 30, 1999. An ad was published in the Palo
Alto Weekly on March 31, 1999 to inform interested members of the public about its
availability. Notices were also mailed to all the applicant agencies, and other interested
parties. The draft Action Plan contains City staff funding recommendations, but will be
revised to reflect the allocations adopted by the City Council prior to its submission to HUD.
CMR:189:99 Page 3 of 7
DISCUSSION
Attachment A is a chart showing the applications received and the CAC and staff funding
recommendations. Attachment B is a. narrative explaining the proposals and the funding
recommendations in more detail. Staff and the CAC have identical recommendations in the
Public Service category, but have differing recommendations in the Program Administration
and Capital Improvement categories. "
The staff and CAC recommendations reflect a lengthy discussion regarding the funding for
homeless services. Staff and the CAC agreed not to recommend continued funding for the
Urban Ministry of Palo Alto. The zero funding recommendation is based on the agency’s
continuing managerial and administrative difficulties, and a decision to focus limited
resources on programs which ill! a gap in the service continuum. Staff and the CAC support
funding for the Palo Alto Police Department/County Mental Health Homeless Outreach
Team application. The PAPD has indicated that a minimum funding level of $60,000 is
needed to initiate the program. Staff and the CAC are also recommending increasing the
amount of funding for the Palo Alto Housing Corporation’s Barker Hotel tenant support
application from $~,000 to $16,450. Some of the low income residents have disabilities, and
many were previously homeless. The effectiveness of additional casework and supportive
serv.ices for the tenants has dramatically stabilized their lives and increased their ability to
remain housed. The Council could choose to redirect these funds, but no more than $117,450
may be allocated to activities in this category.
In the Program Administration category, the CAC does not recommend expending $130,000
to reimburse the City of Palo Alto for its costs associated with administering the CDBG
program. The CAC believes the cost of CDBG program administration should be borne by
the City’s General Fund in light of the extraordinary needs and demands on the HUD
funding. The staff recommendation is to reimburse the $130,000 of program administration
costs to the ~City.
The staff and CAC recommendations also differ in the Housing/Community Development -
Capital Improvement category. Staff recommends expending $658,550 on the acquisition
of Palo Alto Gardens Apartments, and the CAC recommends expending $500,000. The CAC
also recommends $50,000 in funding for The Emergency Housing Consortium’s proposal
for transitional housing for homeless families, and $238,550 for the proposal by Alliance for
Community Care to rehabilitate a downtown residential facility to be used as a board and
care home for the mentally ill.
Palo Alto Gardens Apartments
In November 1998, Mid-Peninsula Housing Coalition (MPHC) successfully negotiated a
purchase agreement with the owners of another affordable housing project in Palo Alto
which was at risk of converting to a market rate rental project. Consequently, the 156-unit
Palo Alto Gardens Apartments project became a viable affordable housing opportunity in
fiscal year 1998/99.
CMR: 189:99 Page 4 of 7 "
On November 23, 1998, at the request of MPHC, the Palo Alto City Council made a $1
million loan commitment to the project. This was done so that MPHC could complete its
funding package and proceed with financing applications for tax exempt bonds and low-
income housing tax credits in a timely fashion. A specific funding source was not identified
at the time due to the fact that the City had just expended all of its CDBG and Residential
Housing In-Lieu funds on the 56-unit Sheridan Apartment acquisition.
Several funding strategies were pursued for the acquisition. City staff applied to the State
of California for an $835,000 grant from the Federal HOME program, which was not
approved, and explored the possibility of securing a Federal Section 108 Loan Guarantee,
which was deemed not feasible. Staff also applied to HUD for authorization for payment of
pre-award costs so that 1999/00 CDBG funds could be used to reimburse the City for
1998/99 expenditures relating to Palo Alto Gardens Apartments. In order for the City to
apply to HUD for pre-award costs, the Annual Action Plan needed to be amended to include
Palo Alto Gardens as a potential activity to be undertaken in fiscal year 1998/99. HUD
approved the City’s request for pre-award costs for the acquisition of Palo Alto Gardens
Apartments on March 5, 1999, and the City Council approved the Amended 1998/99 Action
Plan at a public hearing on March 15, 1999. Also on March 15, 1999, Council committed
$275,000 from the City’s Residential Housing In-Lieu Fund, and "loaned" $725,000 from
the Commercial Housing In-Lieu fund for the acquisition. The 1999/00 CDBG funds will
be used to repay the Commercial Fund. The balance of the loan not reimbursed by CDBG
funds will be repaid to the Commercial Fund from future deposits to the Residential Fund.
ALTERNATIVES TO STAFF RECOMMENDATION
The CAC recommendations are presented as alternative funding strategies below:
1)Administration - In the 1998/99 fiscal year the City’s reimbursement from the CDBG
program was reduced from $180,000 to $130,000 in light of a reduction in the overall
funding available. The difference between the actual cost of the administrative and
project delivery expenses and the CDBG reimbursement will be borne by the City’s
General Fund. The cost of administering the CDBG Program varies each year with
the number of projects and activities, but is approximately $200,000. This includes
salaries, benefits and direct costs. Council could choose to reimburse the General
Fund for CDBG expenses from $0 to $155,600 (20 percent of grant and program
income).
2)Capital - The CAC has recommended a reduced amount of funding to repay the
interim loan for the Palo Alto Gardens Project so that a portion of the CDBG capital
funds can be allocated to two other housing projects -- The Alliance for Community
Care Waverley Street House, and the Emergency Housing Consortium’s Sobrato
Family Living Center. Council could choose to repay all or most of the loan with
1999/00 CDBG funds, or choose to fund other capital activities and repay the
Commercial Fund with future Residential Fund revenues.
CMR:189:99 Page 5 of 7
RESOURCE IMPACT
The 1999/00 CDBG entitlement allocation is $738,000. This amount represents a one
percent increase from the 1998/99 allocation of $733,000. The estimated program income
for 1999/00 is $45,000. Program income is defined as income generated directly from the
use of CDBG funds. The main source of program income is from loan payoffs from the
City’s Housing Improvement Program (HIP) single family rehabilitation program. Since the
HIP Program is no longer operationa! and new loans are not being generated, the income
stream from loan payments and payoffs continues to decrease. The HIP loan portfolio is
currently valued at approximately $135,000. The other anticipated source of revenue is from
the Palo Alto Housing Corporation, when rental income exceeds expenses on properties
acquired or rehabilitated with CDBG funds. Prior program income funds are program
income funds received in excess of the estimated amount and not previously allocated.
The total available 1999/00 funds are as follows:
FY 1999/00 CDBG Allocation
1999/00 Estimated Program Income
Housing Improvement Program (HIP)
Palo Alto Housing Corp. (PAHC)
Prior Unallocated Program Income Funds
Reallocated Funds
Senior Home Repair
Venmra Community Center
Pacific Art League
Sheridan Apartments
25,000
..20,000
2,719
15,798
23,400
49,083
$738,000
45,000
50,000
$924,000
The cap in the public service category is based on estimated 1998/99 program income of
$45,000 and the 1999/00 grant ($738,000 + $45,000 = $783,000 x 15% = $117,450). The
cap in the administration category is based on estimated 1999/00 program income of $45,000
and the 1999~00 grant ($738,000 + $45,000 = $778,000 x 20% = $155,600).
POLICY IMPLICATIONS
All of the applications recommended for funding are consistent with the priorities established
in the City’s Consolidated Plan for the period 1995-2000 and with the housing programs and
policies contained in the adopted Comprehensive Plan.
TIME LINE
Funding recommendations made by the Finance Committee and the draft Action Plan will
be forwarded to the City Council for review and approval at a public hearing on May 10,
CMR: 189:99 Page 6 of 7
1999. The Action Plan, containing the CDBG application, 1999/00 funding allocations, and
requisite certifications, will be submitted to HUD by the May 15, 1999 deadline.
ENVIRONMENTAL REVIEW
For purposes of the California Environmental Quality Act (CEQA), budgeting is not a
project. Under the project descriptions section in Attachment B, the environmental
assessment under CEQA has been identified. HUD environmental regulations for the CDBG
Program are contained in 24 CFR 58 "Environmental Review Procedures for Title I
Community Development Block Grant Programs." The regulations require that entitlement
jurisdictions assume the responsibility for environmental review and decision making under
the National Environmental Policy Act (NEPA). Prior to the commitment or release of funds
for each of the proposed projects, 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
Attachment A:
Attachment B:
Attachment C:
Attachment D:
Chart of 1999/00 funding requests and staff and CAC recommendations
Narrative report containing staff and CAC funding recommendations
Funding Priorities
1999/00 Draft Annual Action Plan Update of the Consolidated Plan for
the Period 1995 - 2000.
PREPARED BY: Suzanne Bayley, CDBG Coordinator
DEPARTMENT HEAD:
G. EDWARD G2(WF x~
Director of Planning and Environment
CITY MANAGER APPROVAL:
Manager
CC:CDBG Citizen’s Advisory Committee Members
Applicant Agencies
CMR:189:99 Page 7 of 7
ATTACHMENT B
STAFF AND CITIZEN ADVISORY COMMITTEE (CAC)
RECOMMENDATIONS FOR 1999/2000
COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING
PUBLIC SERVICE APPLICATIONS
2.
URBAN MINISTRY OF PALO ALTO (UMPA)
P.O. Box 213, Palo Alto, CA 94302
Funding Request $30,612
Staff Recommendation -0-
CAC Recommendation -0-
Proposal: Food Closet and Breaking Bread Meal Programs. UMPA distributes
bagged groceries to persons.in need through the Food Closet at 555 Waverley in Palo
Alto, and organizes prepared meals through the Breaking Bread Meal Program at
participating churches in Palo Alto and Menlo Park. The Breaking Bread program
operates five days a week, providing approximately 300 meals each week at sites in
Menlo Park and Palo Alto. The Food Closet is open five days a week and distributes
approximately 450 sacks of groceries per week. Agency staff organize, train, and
coordinate the many community volunteers who assist in the operation.
Discussion: Contract objectives for the first six months of 1998/99 for the Breaking
Bread Meal Program are being met. Contract objectives for the Food Closet, are 85 % of
target (76.5 bags of groceries/day distributed versus a contract objective of 90
bags/day). The food programs of Urban Ministry are a critical part of the safety net of
services for very low income persons in this region. The proposed budget for the food
programs is $132,166. See discussion below on all programs.
URBAN MINISTRY OF PALO ALTO
Funding Request $27,928
Staff Recommendation -0-
CAC Recommendation -0-
Proposal: Drop-In Center Program. The Drop-In Center is located at 400 Mitchell
Lane in Palo Alto at the rear of the American Red Cross Building. The Center provides
basic survival services to persons who are homeless or in crisis, and is staffed by
UMPA employees and volunteers weekday mornings between 7:30 and 11:30 a.m.
ATTACHMENT B ~
Services include a light breakfast., information and referral, telephone and mail, bus
passes, rotating church shelter registration, case management and counseling, direct
financial assistance and clothes closet referrals.
Discussion: Current contract objectives are being met. Agency reports a daily
attendance average of 108 clients per day. The proposed budget for the Drop-In Center
is $136,557. See discussion below.
3. URBAN MINISTRY OF PALO ALTO
Funding Request $ 3,460
Staff Recommendation $ -0-
CAC Recommendation $ -0-
Proposal: Rotating Church Shelter. The rotating church shelter program provides
year-round temporary housing to homeless individuals. The program rotates on a
monthly basis amongst twelve participating local churches. Morning and evening meals
are provided to guests by members of the host congregation, and UMPA staff serve as
shelter man.agers between 9:00 p.m. and 7:00 a.m. Case management services for
shelter guests are provided at the Drop-In Center. UMPA proposes to provide 4050
bed nights in the 1999/00 fiscal year, or an average of 11 persons per night.
Discussion: The contract objectives for 1998/99 are below target for the first six
months. An average of 9.4 people per night were sheltered in the first six months of
the current program year. The shelter has continued to operate below its 15 bed
capacity for a few years. In their semi-annual report dated January 15, 1999, the
agency reports "all possible solutions to raise the nightly census have been tried,
however, to no avail". The total budget for this program is $62,444.
General Discussion of all UMPA Programs: The staff and CAC recommendations
reflect a lengthy discussion regarding the funding of homeless services. Staff and the
CAC are in agreement with the recommendation not to provide continued funding for
the Urban Ministry’s programs. This recowanendation is based on the following
factors:
A high level of staff and Board turn-over, and the lack of administrative leadership
from a full-time Executive Director persist as on-going problems for UMPA. These
issues contribute to a lack of continuity, accountability and organizational capacity
which impacts UMPA’s ability to address and provide for the needs of their clients. It
affects their ability to interact and collaborate with other non-profit agencies on services
and programs, and to adequately and effectively raise funds and bring more resources
into the community.
ATTACHMENT B
In return for Federal funding, agencies must comply with complex laws and regulations
governing the use of those funds. This includes areas such as internal management and
the documentation and reporting on CDBG-funded ~ictivities. Inconsistencies and
inaccuracies in UMPA’s CDBG funding application, and reports which are not timely
all point to problems with documentation and general record-keeping. The lack of
administrative capacity puts UMPA, and the City, at risk of non-compliance with
Federal regulatory requirements.
UMPA continues to provide paying jobs for clients in the Garden and Lawn Programs
at the expense of their basic programs of food, clothing, shelter, money-management
and supportive services. The 1998/99 budget for the Garden and Lawn Programs is
$118,161, with only $27,000 in projected revenue. Given the limited resources,
UMPA needs to focus on the programs which address the daily living needs of their
clients, and the supportive services which help to move them out of homelessness.
These basic services cannot be delivered adequately when the agency itself is stretched
too thin.
t
While mindful of the wonderful services provided to low income clients by the
dedicated UMPA employees and volunteers, staff and the CAC feel that UMPA must
strengthen and build the capacity of the organization in order to successfully provide for
both the short and longer term needs of their clients. Although attempts have been
made to address the concerns outlined in the attached memo dated March 7, 1996, and
last year’s CDBG recommendations dated April 7, 1999, staff and the CAC believe that
only limited progress has been achieved. UMPA’s projected budget for 1999/00
should allow them to continue to provide basic services (drop-in-center, shelter, food,
money management and supportive services) without CDBG funding.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
COMMUNITY TECHNOLOGY ALLIANCE
115 East Gish Road, Suite 222, San Jose, CA 951121
Funding Request $14,535
Staff Recommendation $ -0-
CAC Recommendation $ -0-
Proposal: Project Share Community VoiceMail for the Homeless. Agency partners
with local non-profit agencies to provide 24 hour VoiceMail boxes to case-managed
homeless clients. The objective is for homeless and at-risk individuals to be able to
access jobs, housing, health care and other services which can help them reach self-
ATTACHMENT B
sufficiency. The proposal is to make 67 VoiceMail boxes available to agencies that
primarily serve Palo Alto.
Discussion: Staff and the CAC do not recommend ~nding for this project due to the
limited funding available.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
STANFORD UNIVERSITY SCHOOL OF MEDICINE
300 Pasteur Drive, Alway #M121, Stanford, CA 94305
Funding Request $15,000
Staff Recommendation -0-
CAC Recommendation -0-
Proposal: Arbor Free Clinic. The Clinic provides free medical care and referral
services for homeless, unemployed and medically uninsured individuals. The clinic
treated approximately 650 individuals in calendar year 1998. Arbor Free Clinic is a
free, walk-in clinic which operates on Sundays at the Menlo Park Veterans
Administration Hospital on Willow Road in Menlo Park. Patients are provided with
general, acute and preventative services, free prescriptions for medications, as well as
referrals and vouchers for free dental care and eye glasses.
Discussion: Staff and the CAC do not recommend funding for this project due to the
limited funding available.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
EMERGENCY HOUSING CONSORTIUM (EHC)
2011 Little Orchard, San Jose, CA 95125
Funding Request
Staff Recommendation
CAC Recommendation
$10,800
8,000
8,000
Proposal: Shelter and Services for Homeless Persons. Agency provides emergency
shelter and comprehensive supportive services to homeless men, women, families with
children, and youth in various facilities in Santa Clara County. EHC operates a Youth
Shelter in San Jose, the winter shelters at the National Guard Armories in Sunnyvale
and Gilroy, the Regional Reception Center in San Jose, and various other transitional
4
ATTACHMENT B
housing programs in the San Jose area. Supportive services include prepared meals,
counseling, child care, transportation, case management, and skills workshops to help
secure housing and/or employment.
Discussion: Current contract objectives are being met. Agency successfully completed
the renovation of the Reception Center in San Jose, a new full-service 250 bed facility
for homeless individuals and families. EHC has now begun research on the gaps and
needs in homeless services in Northern Santa Clara County. As part of this research
effort, they may develop plans for future expansion of services into the North County
area. EHC anticipates serving 60 homeless persons from Palo Alto with food, clothing,
shelter and supportive services in 1999/00.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
PALO ALTO HOUSING CORPORATION (PAHC)
725 Alma Street, Palo Alto, CA 94301
Funding Request
Staff Recommendation
CAC Recommendation
$29,800
16,450
16,450
Proposal: Barker Hotel Resident Support Services. The Barker.Hotel serves a very
low-income population of residents with a history of homelessness and special needs.
A counselor provides support to individual tenants as needs or problems arise. PAHC
requests additional money this year to also maintain a part-time Service Coordinator at
the site to provide more aggressive tenant support and preventative services. These
intensive case-management services play a vital role in helping the residents maintain
their stability and housing. The Service Coordinator position is funded through a one
time grant which ends in October 1999. PAHC requests $5,000 for the counselor and
$24,800 to continue the Service Coordinator position.
Discussion: Current contract objectives are being met. The Barker Hotel serves a very
needy population both in terms of income level and service needs. The facility cannot
be operated for the benefit of this population without extensive supportive social
services. Staff and the CAC were impressed with the quality and results of this
program. It is hoped that the balance of the funding for the Service Coordinator
position can be raised from other sources.
ATTACHMENT B
PALO ALTO HOUSING CORPORATION
Funding Request
Staff Recommendation
CAC Recommendation
$39,000
25,000
25,000
Proposal: Affordable Housing Information and Referral. Agency provides members
of the public, particularly those with low incomes, assistance in their search for
affordable housing. Information is dispensed about affordable housing opportunities in
Palo Alto and surrounding areas, their waiting lists, and other related services such as
mediation, subsidies, and rental assistance. The Directory of Housing Services and
subsidized Rental Housing in Palo Alto and Surrounding Communities is updated and
republished annually.
Discussion: Current contract objectives are being met. Staff and the CAC believe this
is an important service for persons trying to access affordable housing given the high
cost of rental housing and the low vacancy rates. The loss of the local PAAIRS
information and referral service has also affected the number of calls which PAHC
receives.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
CATHOLIC CHARITIES
2625 Zanker Road Suite 200, San Jose, CA 95134-2107
Funding Request $10,300
Staff Recommendation $ 8,000
CAC Recommendation $ 8,000
Proposal: Long-Term Care Ombudsman Program. Agency provides confidential
advocacy and complaint investigation services to the approximately 950 residents in
Palo Alto’s 15 licensed long-term care facilities. Program beneficiaries are the frail,
chronically ill, primarily elderly residents in Palo Alto’s licensed skilled nursing and
residential care facilities. Agency staff and trained community volunteer ombudsmen
visit residents on a regular basis and as special circumstances dictate (i.e., in response
to specific complaints). Agency staff and volunteers investigate complaints, including
allegations of abuse and neglect, seek fair resolution to problems, and promote
residents’ rights for quality of care and quality of life in the long-term care setting.
Discussion: Current contract objectives are being met or exceeded. The Ombudsman
Program services are not duplicated by any other agency, and provide an important
6
ATTACHMENT B
10.
presence in long-term care facilities. Local volunteers are utilized to provide the
majority of site visits. Agency proposes contacting/interviewing 465 Palo Alto
residents and conducting 30 complaint investigations. The number of contract service
units may be reduced commensurate with the reduced funding.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
CITY OF PALO ALTO POLICE DEPARTMENT (PAPD)
250 Hamilton Ave., Palo Alto, CA 94301
Funding Request
Staff Recommendation
CAC Recommendation
$ 75,000
$ 60,000
$ 6O,OOO
Project: Health and Safety Outreach Team. The PAPD proposes a new project to
address the issue of homelessness in the community. The proposal, calls for the PAPD
to collaborate with County social services and mental health professionals to provide
proactive outreach to homeless individuals. Specifically, the proposal links the Police
Department with the services of a licensed clinical social worker (LCSW) and a public
health nurse to provide assessment, resources, referrals, case management and other
services to the homeless population, especially those with mental illness. It would
allow law enforcement personnel to work jointly with the LCSW and public health
nurse to assist homeless individuals in breaking the cycle of homelessness. The funds
would be used to pay the salaries of contract county personnel assigned to the team.
The proposed team will work with Santa Clara County Mental Health, public health and
veterans agencies, and other existing resources to place individuals in short and long
range treatment and housing programs.
Discussion: Staff’ and the CAC believe that this project is an important addition to the
existing services available for mentally ill and homeless persons in our community.
This is an opportunity to increase the number of homeless services available by
allocating the CDBG funds as seed money to initiate a new program. It is a proactive
response to helping people find appropriate resources and to move out of homelessness.
The proposed program will build on existing services and fill a void in the County’s
"Continuum of Care" plan for the provision of homeless services throughout the
County. It takes counseling and casework directly to people on the streets who might
be mentally ill or have other health problems. The program also encourages an
important partnership between the City of Palo Alto and the County of Santa Clara and
between the disciplines of law enforcement and social services. The CAC has
requested that the Human Relations Commission assist in the program assessment by
ATTACHMENT B
being a conduit for any complaints or concerns from the public relating to program
implementation. The PAPD has indicated that the minimum amount needed to initiate
the program is $60,000.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
PROGRAM ,ADMINISTRATION APPLICATIONS
11.
12.
MIDPENINSULA CITIZENS FOR FAIR HOUSING (MCFH)
457 Kingsley Avenue, Palo Alto, CA 94301
Funding Request
Staff Recommendation
CAC Recommendation
$ 24,500
$18,000
$18,000
Project: Fair Housing Services. Agency provides investigation, counseling and legal
referral for victims of housing discrimination as well as community outreach and
education regarding housing rights. MCFH seeks to reduce discrimination in housing
and provide redress for those who have been discriminated against. HUD regulations
require CDBG entitlement jurisdictions to affirmatively further fair housing choice.
Discussion: Contract objectives are being met. Agency proposes to investigate 15
cases of housing discrimination and provide special preventive advocacy and
educational client services.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
CITY OF PALO ALTO, PLANNING DEPARTMENT
250 Hamilton Ave, Palo Alto, CA 94301
Funding Request
Staff Recommendation
CAC Recommendation
$130,000
$130,000
-0-
Project: CDBG Program Administration. Funding is requested for costs associated
with the administrative management of the CDBG program, planning studies, and for
8
ATTACHMENT B
project delivery costs which relate to the implementation of capital projects.
Administrative costs are associated with the overall management, coordination,
monitoring and evaluation of the CDBG program, 9versight of public service contracts,
as well as activities such as data gathering, studies, analysis, plan preparation, and the
identification of actions for the implementation of plans.
Discussion: The funds requested are used to reimburse the Planning Department for
the cost of administering the CDBG program. The City’s cost to administer the
program varies with the number of housing and/or capital projects which are
undertaken, but can be estimated to be approximately $200,000 per year. This includes
salary, benefit and non-salary direct costs. The CAC believes that the City’s General
Fund should pick up the full cost of CDBG program implementation this year so that
the entire grant can be applied to direct project costs.
Environmental: Not a project under the California Environmental Quality Act
(CEQA).
13.
HOUSING/CAPITAL PROJECT APPLICATIONS
VETERANS WORKSHOP, INC.
795 Willow Road, MS116B6, Menlo Park, CA 94025
Funding Request $ 53,670
Staff Recommendation $ -0-
CAC Recommendation $ -0-
Project: Rehabilitation of Shared Transitional Housing for Veterans. Agency
requests funding for interior and exterior rehabilitation of two existing shared houses in
Palo Alto. The two properties, located at 442 Margarita Street and 325 Fernando
Street in Palo Alto, provide 12 units of affordable transitional housing for low income
veterans. Funds are requested for painting, foundation repair, construction of closets,
kitchen and bathroom remodeling, addition of wheelchair ramps, and roofing work.
Discussion: Staff and the CAC do not recommend funding due to the limited amount
of funding available.
Environmental: Categorically exempt under Section 15301 of CEQA, minor change to
an existing facility
9
ATTACHMENT B
14.MID-PENINSULA HOUSING COALITION (MPHC)
658 Bair Island Road, Suite 300, Redwood City, CA 94063
Funding Request
Staff Recommendation
CAC Recommendation
$1,000,000
$ 658,550
$ 500,00o
Project: Acquisition of Palo Alto Gardens Apartments. Agency proposes to acquire
and rehabilitate the Palo Alto Gardens Apartments located at 648 San Antonio Road in
Palo Alto in order to preserve it as affordable housing. If the 156-unit project were
allowed to convert to market rate housing, the current residents, the majority of whom
are elderly, would be at risk of becoming homeless. On March 15, 1999 the Palo Alto
City Council committed $1,000,000 to the project in the form of an interim loan from
the City’s Housing Reserve Funds; $275,000 was paid from the balance in the
Residential Housing In-Lieu Reserve, and $725,000 was loaned tc~ the Reside~:tial Fund
from the Commercial Housing In-Lieu Fund. Since the acquisition of existing housing
is not an eligible activity with Commercial Housing In-Lieu funds, the $725,000 loan
needs to be repaid to the Commercial Housing In-Lieu Fund. The most likely source of
repayment is from 1999/00 CDBG funds.
On March 5, 1999, HUD approved the City’s request for a pre-award determination
which will allow the City to reimburse itself with 1999/00 program funds for an
expenditure in program year 1998/99. The 1998/99 Annual Action Plan of the
Consolidated Plan was amended to reflect the anticipated project expenditure in
1998/99. On March 15, 1999 MPHC received tax.credit and tax exempt bond
allocations for the purchase and rehabilitation of the property.. It is expected, that
escrow will close by the end of April 1999.
Discussion: Preservation of these at-risk housing units is the highest priority in the
City’s adopted Consolidated Plan. Both staff and the CAC support the project, but
differ on the amount of CDBG funding which should be utilized to repay the interim
loan. Staff recommends that the maximum amount available be utilized for the
acquisition. The CAC recommends expending the majority of the available funds on
the acquisition, and the remainder on two other urgent capital projects. Any shortfall
between the $725,000 loan and the amount of the CDBG commitment will be repaid
from future revenues to the Residential Housing In-Lieu Fund.
Environmental: Categorically exempt under Section 15301 (existing facilities) of the
CEQA guidelines.
10
ATTACHMENT B
15.
16.
ACHIEVE (formerly Peninsula Childrens Center)
3860 Middlefield Rd, Palo Alto, CA 94303
Funding Request ,$35,000
Staff Recommendation -0-
CAC Recommendation -0-
Proposal: Exterior Painting of Building. Agency provides a wide range of support
services to children and young adults with behavioral, emotional and developmental
difficulties. Annually, the range of programs provided serve 1,500 children and their
family members throughout Santa Clara, San Mateo and Alameda Counties. Programs
include special education, outpatient mental health, therapeutic recreation, and early
childhood intervention/prevention services. Agency requests funding to paint the
interior and exterior of their facility on Middlefield Road which includes classroom
spaces and administrative offices.
Discussion: Staff and the CAC do not recommend funding based on the limited funds
available.
Environmental: Categorically exempt under Section 15301 of CEQA, minor change to
an existing facility.
COMMUNITY HOUSING INC. (CHI)
656 Lytton Avenue, Palo Alto, CA 94301
Funding Request $36,850
Staff Recommendation -0-
CAC Recommendation -0-
Proposal: Heating, Cooling, and Energy Management Feasibility Study. CHI owns
and manages Lytton Gardens I and II, providing 320 subsidized independent and
assisted living units for low and very low income seniors. This proposal is a request
for an energy efficiency study to develop a comprehensive capital program to reduce
operating costs, maintain affordability, and to contribute to the comfort of residents.
Discussion: Staff and the CAC do not recommend funding based on the limited funds
available.
Environmental: Categorically exempt under Section 15301 of CEQA, minor change to
an existing facility.
11
ATTACHMENT B ’ ~
17.
18.
EMERGENCY HOUSING CONSORTIUM (EHC)
2011 Little Orchard Street, San Jose, CA 95125
Funding Request
Staff Recommendation
CAC Recommendation
$50,000
-0-
$50,000
Project: Sobrato Family Living Center. EHC proposes to provide 50 new units of
transitional and permanent housing for homeless families near the site of the former
Santa Clara Family Living Center on Agnew Road in the City of Santa Clara. EHC
operated the family homeless shelter for 15 years until the State of California sold the
property to Sun Microsystems in 1997. EHC has negotiated a deal which will allow
them to replace the 32 unit family shelter with 32 new individual two-bedroom
apartments, a resident manager’s apartment, and a community center. The second
phase of the project involves the construction of eight (8) three and four-bedroom
apartments, and the conversion of five existing on-site houses into ten two-bedroom
apartments. City funds are requested for the rehabilitation of the five existing houses
on site.
Discussion: Staff is supportive of the project, but recommends that all capital funding
in the 1999/00 program year be allocated to repay the City’s Commercial Housing
Reserve Fund for the interim loan for the Palo Alto Gardens Apartments Project. The
CAC believes that this project should be funded, given the extreme lack of affordable
housing available for very low income families, and families struggling to transition out
of homelessness.
Environmental: Categorically exempt under Section 15301 of CEQA, minor change to
an existing facility.
ALLIANCE FOR COMMUNITY CARE (formerly Miramonte Mental Health)
438 N. White Road, San Jose, CA 95127
Funding Request
Staff Recommendation
CAC Recommendation
$352,675
-0-
$238,550
Project: Waverley Place Rehabilitation. Agency provides mental health services to
people with serious psychiatric disabilities. This proposal is to rehabilitate the agency’s
vacant residential property at 650 Waverley Street for use as a licensed board and care
home. It is anticipated that eleven to fourteen very low income individuals with mental
illness could be served, depending on the final architectural design. The program
would provide a day treatment component to develop skills and symptom management
12
ATTACHMENT B
19.
for the individuals served. The stay in the program would be for an indefinite period of
time, but generally individuals average six to twelve months in this type of housing.
ALLIANCE was provided with CDBG funds in a prior year to do a feasibility study to
determine the best use of the property and estimated rehabilitation costs. This study
has not yet been completed.
Discussion: Staff is supportive of the project, but recommends that all capital funding
in the 1999/00 program year be allocated to repay the City’s Commercial Housing
Reserve Fund for the interim loan for the Palo Alto Gardens Apartment Project. The
CAC recommends funding for this project due to the extreme lack of housing
opportunities for people with serious mental disabilities in north Santa Clara County,
and the urgency associated with leaving the property vacant for a longer period of time.
Environmental: Categorically exempt under Section 15301 of CEQA, minor change to
an existing facility.
PALO ALTO SENIOR HOUSING PROJECT, INC.
455 East Charleston Road, Palo Alto, CA 94306
Funding Request $64,594
Staff Recommendation -0-
CAC Recommendation -0-
Proposal: Retrofit of Windows and Doors at Adlai E. Stevenson House. Stevenson
House is a 30-year old residential facility located at 455 East Charleston Road in Palo
Alto. The three buildings contain 120 independent living units providing affordable
housing for 135 lower income older adults. This proposal is to retrofit sliding glass
doors and windows on 22 units to enhance the comfort and security of the residents,
conserve energy, and reduce operating costs.
Discussion: Staff and the CAC do not recommend funding based on the limited funds
available.
Environmental: Categorically exempt under Section 15301 of CEQA, minor change to
an existing facility.
13
From:
Date:
Re:
Palo Alto City Coundl
Urban Ministry of Palo Alto Board of Directors
CDBG Citizens Advisory Committee
March 7, 1996
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 Ciiy 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.
-Use of the Grant
Two-thirds of the grant shall be used to fund the purchase and
distribution of tangible goods -- 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 iwar, ediate 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 UMPA deliver tangible goods, as well as services for which t_bere 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 R@quired 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 finandal 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 Feb_ruary 7, 1996 from UMPA’s 1994 auditors made 24 specific
suggestions for change. We urge UMPA to implement these changes as soon
as possible. The .auditor expressed the verbal opinion thatUMPA’s financial
practices have been sloppy but not dishonest.
UMPA mudt 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.’Organiza tional Improvemen~tt
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, la~v, 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 rnernbers should be recruited who have relevant business
and non-profit management experience.
2. Mission Staten~.n~t -- Once the board has been strengthened, UMPA should
revisit its missior,.’-*.;tatement. Originally a ministry that operated a limited
drop-in service,.UMPA has grown into a more full-service social service
agency. What is it~ 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 boa.rd. Wl-fle the staff will 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 ahswer 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.
FROM 1998 CDBG RECOMM~NDAT±ONS
Agency: Urban Ministry of Palo Alto (UMPA)
P. O. Box 213, Palo Alto, CA 94302
Program: Shelter and Supportive Services for the Homeless. This agency provides
shelter, emergency assistance and supportive services to the local homeless and very
low income population. Services subsidized by CDBGfunding include staffing of the
Drop-in Center; administration of the rotating church shelter program, the food closet,
and prepared hot meal programs. Services at the drop-in center include distribution of
mail and messages, bus passes, personal hygiene items, counseling, and referral to
needed services.
Funding:
1998/99 Request:
1997/98 funding:
CAC Recommendation:
Staff Recommendation:
$75,000
$66,900
$59,000
$62,0OO
Discussion: Current contract objectives are being met in the Drop-iia Center and
Prepared Meal/Emergency Food Programs. However, the number of bed nights
provided by the Rotating Church Shelter Programs is 15 percent below the targeted
number.. Although the shelter has a 15 bed capacity, there are nights when the census
has been as low as six persons. This is surprising given the rainy weather and the
capacity crowds at other area shelters. UMPA has begun an analysis of the decline in
the Hotel De Zink shelter clientele, and will report on the results.
While working diligently to maintain the progress made in the administrative and
financial systems of the organization, UMPA continues to suffer from Staffing turnover.
This turnover undermines program continuity and accountability. The CAC
recommends funding at a level which is 12 percent below the current level of funding.
The staff recommendation ’is for a 7 percent reduction.
Environmental: Not a project under CEQA.
4
ATTACHMENT C
SUMMARY OF CDBG FUNDING PRIORITIES*
FISCAL YEAR 1999/2000
*Note: Priorities are shown in order of importance
I.AFFORDABLE HOUSING (Goal: 60% of Budget)
A. NEW CONSTRUCTION, CONVERSION & ADDITION OF NEW UNITS
Permanent housing for families with children
Other permanent housing including group homes, seniors, the disabled,
shared housing, etc.
Transitional housing with supportive services
Permanent housing for the homeless or at-risk of homelessness
B. PRESERVATION OF EXISTING, LOWER INCOME RENTAL HOUSING
Preservation of existing, federally subsidized multi-family housing owned
by profit motivated investors
Acquisition and/or rehabilitation of existing multi-family rental housing,
including improvements to common areas
Acquisition and/or rehabilitation of existing buildings for special needs
populations including shared housing and group homes
II.PUBLIC FACILITIES AND IMPROVEMENTS (Goal: 5% of Budget)
III.
Rehabilitation of existing facilities for use as shelters for the homeless or
other special needs groups
PUBLIC SERVICES (Goal: 15% of Budget)
IV.
Services directly related to the housing needs of low income persons
Homeless shelter operating costs and the provision of auxiliary or related
services
Services which address other needs of low income, elderly or special
needs persons
ADMINISTRATION (Goal: 20% of Budget)
Fair housing education, information, referral, advocacy, counseling and
complaint resolution
2.CDBG program administration and planning costs
ATTACHMENT D
DRAFT
CITY OF PALO ALTO
Housing and Community Development
1999/2000 ACTION PLAN
Annual Update of the City’s Consolidated Plan for the Period
July 1, 1995 to June 30, 2000
Public Review Period: April 1, 1999 - April 30, 1999
Adopted by the Palo Alto City Council on
Prepared by Departmem of Planning & Community Environment
250 Hamilton Avenue
Palo Alto, California 94301
G. Edward Gawf, Director
For Information, Please Contact: Suzanne Bayley
Planning Division, City of Palo Alto (650) 329-2428
CITY OF PALO ALTO
FISCAL YEAR 1999/2000 ACTION PLAN
ANNUAL UPDATE TO THE CITY’S CONSOLIDATED PLAN
FOR THE PERIOD JULY 1, 1995 TO JUNE 30, 2000
This Action Plan is the 1999/2000 annual update to the City’s Consolidated Plan for the Period
July 1, 1995 to June 30, 2000. The Consolidated Plan is a five-year planning document which
describes local conditions and resources, identifies priority housing, human service, and
community development needs, and outlines a strategy and plan to address the identified needs.
The Consolidated Plan and the annual updates are submitted to the U.S. Department of Housing
and Urban Development (HUD) to enable the City of Palo Alto to receive and administer federal
funds under the Community Development Block Grant (CDBG) program
The Consolidated Plan is meant to serve as a guide to insure that federal funds are directed toward
the most urgent community needs, and that funding decisions are consistent with identified
priorities and strategies. The Action Plan identifies the activities which the City anticipates
undertaking in fiscal year 1999/2000 with CDBG funds, and describes the activities which the City
plans to undertake to affirmatively further fair housing choice.
Federal Resources
In fiscal year 1999/00, the City will allocate $924,000 to CDBG digible activities. The amount
of the City’s 1999/00 CDBG entitlement grant from HUD is $738,000, and estimated program
income is $45,000. Program income is income directly generated from the use of 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 loan program.
The other source of program income is from the Palo Alto Housing Corporation (PAHC) when
rental income exceeds expenses on properties acquired or rehabilitated with CDBG funds. Prior
program income funds are funds received in prior years which were in excess of the estimated
program income amounts, and were not previously allocated to projects. Reallocated funds were
allocated to projects in previous years, but were not used.
The estimated 1999/00 CDBG funds are as follows:
FY 1999/00 CDBG Allocation
1999/00 Estimated Program Income
Reallocated Funds
Prior Unprogrammed Funds
$738,000
45,000
91,000
50,000
$924,0O0
Public Review and, Public Hearings
On Thursday, September 24, 1998 the Palo Alto Human Relations Commission held a public
hearing at Ventura Community Center to provide an opporttinity for citizens to comment on Palo
Alto’s housing, human service, and community development needs. The hearing confirmed that
the greatest community need continues to be the lack of housing affordable to lower income
persons. No changes to the previously identified priorities were made as a result of the hearing.
The City of Palo Alto has an adopted Citizen Participation Plan which provides for a nine-member
CDBG Citizens Advisory Committee (CAC). The CAC process encourages public participation
in the CDBG allocation and evaluation review process. The Citizen Advisory Committee held a
public meeting on November 10, 1998 to discuss the Palo Alto Gardens Apartments proposal, and
on January 7, 12, 21, and 26, and February 4, 9, 18 and 22, 1999 to review and make
recommendations on the applications for 1999/00 funding.
HUD regulations require that the draft Action Plan annual update be available for a 30-day public
review and comment period. The public review and comment period for the 1999/00 Plan is from
April 1, 1999 to April 30, 1999. Interested citizens are invited to submit written comments on
the Plan to Suzanne Bayley, Planning Division, City of Palo Alto, 250 Hamilton Avenue, Palo
Alto, CA 94301, or to provide comments directly at the following public hearings:
April 6, 1999
May 10, 1999
Finance Committee Meeting, 7:00 P.M.
City Council Meeting, 7:00 P.M.
Amendment to 1998/99 Action Plan and Authorization for Pre-Award Costs
The Palo Alto City Council adopted an amendment to the 1998/99 Action Plan at a public hearing
on March 15, 1999. The amendment identified the acquisition of the Palo Alto Gardens
Apartments as a potential activity in fiscal year 1998/99 (see discussion below under housing).
This action allowed the City to request authorization from HUD to permit 1999/00 CDBG funds
to be used to reimburse the City for costs expended in fiscal year 1998/99 for the acquisition of
the Palo Alto Gardens Apartments. Additionally, the City requested that HUD authorize the
payment of pre-award costs in excess of the $300,000 maximum specified in CDBG regulations.
In a letter dated March 5, 1999, HUD authorized both requests.
HOUSING
Local and Other Resources
The primary local housing resource available in the City of Palo Alto is the City’s Housing
Reserve. The Housing Reserve has two components, the "Commercial Housing In-Lieu Fund",
and the "Residential Housing In-Lieu Fund". The primary purpose of the Commercial Fund is
to increase the number of new affordable housing units for Palo Alto’s work force. The
Residential Fund can be used for acquisition, rehabilitation, new construction and predevelopment
of low income housing.
The Commercial Housing In-Lieu Fund is funded with housing mitigation fees required from
developers of commercial and industrial space. As of 2/28/99, the Fund had a balance of
approximately $2,650,000. The Residential Housing In-Lieu Fund is funded with mitigation fees
provided under the City’s Below Market Rate (BMR) housing program from residential
developers, and money from other miscellaneous sources, such as proceeds from the sale or lease
of some City property. As of 2/28/99, this Fund had an unrestricted balance of approximately
$295,000. "
Leveraging and Matching Requirements
The City of Palo Alto will leverage federal and private housing funds to the greatest extent feasible
consistent with the goals identified. The City will encourage housing project sponsors to seek
private financing and private grants. The City will also utilize its local Housing Reserves, as
appropriate, to leverage federal and private housing funds. Where eligible, CDBG funds, which
are obligated for housing activities and support services, could be used as a portion of the
matching requirement for federal housing programs.
The City of Palo Alto is not an entitlement jurisdiction for HOME funds. The only possible way
to access HOME funds is for the City, or eligible nonprofit organizations, to apply to the State of
California for the funds in an annual competition. Due to excessive demand for the state’s HOME
allocation, and rating criteria that doesn’t favor areas like Palo Alto, it is difficult to secure an
award. At the time the next Notice of Funding Availability (NOFA) is published, staff will
.evaluate all potentially suitable projects to determine whether or not to apply for a HOME grant.
LOCAL, PUBLIC AND PRIVATE RESOURCES FOR AFFORDABLE HOUSING
New Home Buyer Rental Homeless Homeless
Activity Acquisition Rehabilitation Construction Assistance Assistance Assistance Prevention
LOCAL, PUBLIC
Community Housing X
In-Lieu Fund
Residential Housing In-X X X
Lieu Fund
City owned land X
MCC Pro~rara X
Housing Bond Trust X X X X
Fund
County Housing X X X X X X
Authorit), Sec 8
County Dept of Social X X
Services
BMR Rental & Owner
,,Program
Private Lenders: AHP
, Nonprofit Developers
Private Foundations &
Churches
PRIVATE RESOURCES
X X X
X X X
X X X X X
X X
Priority Housing Needs
The City of Palo Alto’s Consolidated Plan and Housing Element both emphasize the great need
for affordable housing for low and very low income households in Palo Alto. While all types of
housing are needed in the City, the Consolidated Plan objectives focus on the creation and
preservation of rental housing, with an emphasis on housing for singles and very small households
who are homeless, at risk of homelessness, 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: 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. Following the purchase of the Sheridan
Apartments by the Palo Alto Housing Corporation in December, 1998, the balance in the CDBG
Housing Fund was reduced to zero.
The actual process for initiating a project will vary depending on the particular circumstances.
Usually, a nonprofit housing sponsor will apply to the Department of Planning and Community
Environment for housing subsidy funds when they are in negotiation for a particular site. At other
times, the City may issue a Request For Proposals. Whenever possible, requests for CDBG
housing funds are considered in the annual CDBG allocation process.
The City may provide funding from a variety of sources depending on the nature of the project.
The Planning Department will present recommendations for each project together with a proposed
funding package to the City Council for approval. In most all cases, funds will be provided as a
loan. The loan will be secured by the property. The repayment terms and interest rate have to
be tailored to the particular project since low income housing typically is financed from multiple
sources with. specific requirements. Wherever possible, the City will attempt to obtain a
repayment of its funds at some point in the future. Repayment of loans will enable the Housing
Development Fund to continue to be used to create new housing opportunities even if federal
subsidies decline in the future.
Miscellaneous C6sts Related to Site and Project Feasibility
Housing Development Funds may also be used to pay for costs associated with the investigation
of the feasibility of sites and properties for acquisition by the City or nonprofit organizations for
affordable, low income housing. These costs usually need to be paid prior to a project being
officially created in the budget. Typically these costs are for appraisals, environmental studies and
soil testing, title reports and design sketches. Usually no more than $25,000 per fiscal year will
be needed for these expenses, and often less.
Funds may be used for emergency loans for single family rehabilitation, even though the City no
longer has an active single family rehabilitation loan program. It is possible that serious
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.
Projects which may need funding from the Housing Development Fund during FY 99/00 are:
Projec~
Alliance for Community Care’s group
home for the mentally ill at 650 Waverley
Street in Palo Alto
Emergency Housing Consortium’s
Sobrato Family Living Center on Agnews
Drive in Santa Clara
Feasibility, Investigations, and Site
Acquisition Family Apartments
Group Homes for Lower Income Persons
with Disabilities
Miscellaneous Expenses Related to
Site and Project Feasibility studies for
other new housing projects
Emergency Rehabilitation Loans for
Single Family Owners
Activity
Rehabilitation
Rehabilitation
New construction
Rehabilitation
N/A
Rehabilitation
Number of Units
Estimated
11-13 units
5 units
Estimated
30+ units
Estimated
16 units
N/A
As needed basis
1999/00 Housing Activities to be Undertaken
Acquisition and Rehabilitation of the Palo Alto Gardens Apartments
The acquisition and rehabilitation of the Palo Alto Gardens Apartments by Mid-Peninsula Housing
Coalition (MPHC) will be the primary use of capital CDBG funds in the 1999/00 fiscal year;
$658,550 in 1999/00 CDBG funds will be used to reimburse the City for expenses incurred in
fiscal year 1998/99 ,relating to the acquisition of the project. "
In November, 1998, MPHC f’malized negotiations to purchase the 156-unit Palo Alto Gardens at
648 San Antonio Road in Palo Alto. The affordable housing complex, originally developed in
1973 and f’manced through the HUD 221 (d)(3) program as a 100% cost based Section 8 project,
was at-risk of converting to market rate rental housing. The action to acquire the site in order to
preserve it as affordable housing followed the owner’s decision to prepay the HUD-insured
mortgage and not renew the Section 8 project based rental assistance contract. All Federal
Regulatory restrictions were scheduled to end on the property on June 30, 1999, including the
HUD-required tenant rental protection period following mortgage prepayment. The sale to MPHC
will preserve the housing for the existing low income residents and keep the entire 156 units as
part of the City’s affordable housing stock under new 50-year affordability requirements.
On November 23, 1998, at the request of MPHC, the Palo Alto City Council made a $1 million
loan commitment to the project so that MPHC could complete its funding package and proceed
with financing applications for tax exempt bonds and low income housing tax credits in a timely
fashion. A specific funding source was not identified at the time due to the fact that the City had
just expended all of its CDBG and Residential Housing In-Lieu funds on preserving the 56-unit
Sheridan Apartment complex. Because the Palo Alto Gardens purchase agreement contains a
May 31,1999 escrow closing date, the City requested and received HUD approval to use 1999/00
CDBG funds to reimburse the City for costs expended in fiscal year 1998/99 relating to the
acquisition of Palo Alto Gardens.
On March 15, 1999 the Palo Alto City Council adopted a Budget Amendment Ordinance which
appropriated the $1 million dollar loan to MPHC using the current balance of $275,000 in the
Residential Housing In-Lieu Fund and providing for a $725,000 interim loan from the Commercial
Housing In-Lieu Fund. The Commercial Housing In-Lieu Fund will be repaid from the 1999/00
allocation of CDBG funds, and future revenue from the Residential Fund. This was done so that
the Council’s decision on the amount of CDBG assistance could be made concurrently with the
funding decisions on the other projects seeking 1999/00 CDBG funding. The total cost of the
project, including acquisiton and rehabilitation, is anticipated to be $16.7 million. In addition to
the $1 million City of Palo Alto loan, MPHC has secured an $11.4 million allocation of tax-
exempt bonds and $4 million in low income housing tax credits. Escrow is anticipated to close
by the end of April, 1999, and the rehabilitation is scheduled for completion by December, 1999.
COMMUNITY DEVELOPMENT
Human Services
In fiscal year 1999/00, the City will provide in excess of $1,000,000 from the General Fund in
support of human service programs through its Human Service Resource Allocation Process
(HSRAP). The HSRAP funds, in conjunction with the CDBG public service funds, are distributed
to local non-profit agencies whose programs serve the needs of seniors, children, youth and
families, persons with disabilities, and those who are homeless, or at risk of homelessness. A
variety of supported programs provide fair housing activities, mental and physical health care
services, tenant/landlord mediation, information and referral, subsidized child care, support for
victims of domestic violence and rape, adolescent counseling, emergency food, nutritional
services, recreational activities, and subsidized para-transit services.
Priority Public Service Needs
All of the public service activities included in the 1999/00 CDBG funding cycle address the
priority public service goals identified in the Consolidated Plan of:
a) relating directly to the housing needs of low income persons
b) shelters and support services for those who are homeless
c) services which address other needs of low income, elderly or special needs persons.
Services and Resources for Persons Who Are Homeless
72 % of the public service funds available under the CDBG program in 1999/00 are specifically
targeted to programs which serve persons who are homeless or at-risk of homelessness. In
1999/00,Palo Alto will provide CDBG funding in support of a new program to address the needs
of people who are homeless with the intent of assisting them in breaking the cycle of
homelessness. Sponsored by the Palo Alto Police Department (PAPD), the program will provide
an outreach team in collaboration with County social services and mental health professionals. The
program will link the PAPD with the services of a licensed clinical social worker from the
County’s Office of Mental Health, and a public health nurse to provide assessment, resources,
referrals, case management and other services directly to the homeless population, especially those
with mental illness. This program will help to fill a void in the County’s Continuum of Care Plan
for the provision of homeless services throughout the County.
CDBG funds will be used to continue to provide funding for Emergency Housing Consortium’s
county-wide shelter and supportive services programs, including the National Guard Armory in
Sunnyvale and the San Jose Reception Center. Funds will be increased for the Palo Alto Housing
Corporation’s case management and counseling program for the low income residents of the
Barker Hotel, many of whom have a history of homelessness and special needs. This program of
intensive case management and aggressive tenant support and preventative services plays a vital
role in helping the residents maintain their stability and housing.
Palo Alto will support Countywide efforts to obtain greater funding for the emergency Rental and
Mortgage Assistance Program operated by the Emergency Assistance Network of local agencies
(the American Red Cross operates the program in the Palo Alto area) which provides loans and
grants to prevent households from losing their housing or defaulting on home mortgages. The
City HSRAP program provides funding in support of the Red Cross’ homeless prevention
program, Alliance for Community Care’s homeless counseling program, Mayview Community
Clinic’s low cost health care services, the Support Network for Battered Women, the Social
Advocates for Youth shelter, and for the Clara-Mateo Alliance Shelter. City General Funds will
be provided to continue the City’s Seasonal Jobs Program which employs homeless or at-risk
persons for various short-term positions.
City staff will continue working with the Santa Clara County Collaborative on Housing and
Homeless Issues, and other local jurisdictions, to increase the number of shelter beds, transitional
housing units, and supportive services for homeless individuals and families. The Collaborative
was created in 1991 tO provide a formalized, community-based process to address the issues of
homelessness on a regional basis. A Continuum of Care Plan was developed which identified key
components in addressing the long-term needs of homeless persons and families. The plan has
been used to identify gaps in services, and to allow scarce federal and other resources to be used
as effectively as possible.
Transition From Homelessness to Permanent Housing
The Barker Hotel, owned and operated by the Palo Alto Housing Corporation (PAHC), has 26
units of permanent Single Room Occupancy (SRO) housing at rents affordable to persons with
incomes between 30% and 50% of the median income. Five of the Barker’s units are fully
accessible by wheelchair users. Priority for occupancy is for persons who are homeless (either
unsheltered or sheltered); persons with disabilities, and persons of extremely low incomes. Six of
the units are available with tenant based Section 8 subsidies through the County’s "Shelter Plus
Care" program.
Alma Place, located at 753 Alma Street in Palo Alto, is also owned and operated by the Palo Alto
Housing Corporation. The project, a 106-unit single room occupancy residence hotel, is
affordable to low and very low income persons due to the layering of subsidies from City Housing
Reserve funds, a private bank loan, an Affordable Housing Program (AHP) Grant, and an award
of low income housing tax credits. The studio apartments rent for $330 to $490 per month and
are available to persons earning between $6,600 and $20,000 a year. Six of the units have tenant
based Section 8 rental subsidies through the Shelter Plus Care program.
Housing Related Services
Tenant landlord counseling and mediation~ services for Palo Alto residents will be provided
through Project Sentinel. CDBG funds will support the Palo Alto Housing Corporation’s housing
information and referral service which provides members of the public, particularly those with low
incomes, assistance in their search for affordable housing. CDBG fund will also be used to fund
Mid-Peninsula Citizens for Fair Housing to combat housing discrimination.
Analysis of Impediments to Fair Housing Choice
The City of Palo Alto completed an Analysis of Impediments to Fair Housing Choice on
February 6, 1996. That report identified a lack of housing options affordable to persons of low
and moderate income as the major impediment to housing choice. Housing discrimination was
also identified as an impediment, with cases based on familial status the most often reported.
However, the number of cases of discrimination against persons with physical and mental
disabilities has also been increasing. Palo Alto plans to undertake the following actions to foster
and maintain affordable housing, and to address housing discrimination during the 1999/00 fiscal
year:
9
Provide funding to the local fair housing agency, Mid-Peninsula Citizens for Fair Housing
(MCFH) to reduce discrimination in housing by:
a. Investigating a minimum of 15 cases of housing discrimination
b. Conducting 25 consultations with persons who believe they have been discriminated against
c. Maintaining a pool of 50 testers for investigations and conduct 3 trainings
d. Maintaining a panel of 10-15 attorneys for referral and coordinating an annual meeting for
participating attorneys
e. Running biweekly ads in the Palo Alto Weekly and daily ads in the San Jose Mercury
News; and running one display ad promoting fair housing
f.Distributing 100 fair housing brochures
g Running 20 public service announcements for local radio/TV broadcasts
h.Making 7 educational presentations to the community
I.Monitoring and reporting on four rental sites
j Showing the educational video on housing discrimination produced by MCFH on local
cable TV
Continue to support the Human Relations Commission in their documentation and
investigation of hate crimes, and in their support of diversity and disability issues.
Continue to monitor the provision of fair housing services by MCFH to ensure that
adequate services are being provided, and that services are provided in the most cost
effective means.
Participate in a study of fair housing service delivery and effectiveness in Santa Clara
County by the Office of Housing and Community Development, and follow-up community
meetings.
Continue the City’s funding support of affordable and supportive housing services which
provide housing information and referral, and tenant landlord mediation.
Geographic Distribution
Housing Activities: The City will consider the provision of all types of housing assistance on a
Citywide basis consistent with the policies of the City’s Comprehensive Plan. The City does not
have specific target areas for housing activities but attempts to provide housing affordable to lower
income persons throughout the City.
Community Development Activities: Specific efforts have been coordinated in the Community
Services and Police Departments to focus on activities and services in the Ventura neighborhood.
A number of City sponsored programs and activities serving low and very low income persons
have either been undertaken or are proposed. A police substation was opened in the area with the
goal of improving contact with the community. The Ventura Neighborhood (Census tract 5107,
Block Group 2) has a large proportion of modest rental housing, a relatively high proportion of
10
minority and ethnic groups, and 48.46 % of the households are below the CDBG income eligibility
limits.
Amendments to Plan
Prior to the submission of any substantial change in the proposed use of funds, citizens will be
provided reasonable notice of, and the opportunity to comment on, the proposed plan
amendments(s).
Urgent Need Activities
In the event of a local, state or federal disaster declaration for areas within the boundaries of the
City of Palo Alto, the City reserves the right to use CDBG or other available federal funds to abate
immediate and necessary hazards. Such funds may be used for staff efforts, loans, or outright
grants to affected parties, as approved by City Council and allowable under the pertinent Federal
Guidelines.
Monitoring of Activities
The City will continue to closely monitor 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
grant subrecipient, as necessary, to insure compliance with all regulations governing their
administrative, fmancial, 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, Milpitas, San Jose, and the
Urban County of Santa Clara met to discuss issues of mutual concern and to share information and
strategies for addressing housing, homeless, fair housing, and other community development
needs. The meetings have helped the participants better understand the County and nonprofit
social service structure.
The City of Palo Alto continues to collaborate with neighboring jurisdictions in San Mateo County
on issues relating to homelessness through the Clara Mateo Alliance Shelter. The 45 bed facility,
located on the grounds of the Veterans Administration Hospital on Willow Road in Menlo Park,
11
is operated by the Salvation Army. The Clara Mateo Alliance provides supportive services and
45 emergency and transitional shelter beds to homeless individuals.
Over the last several years, the entitlement cities in Santa Clara County have cooperated in the
joint CDBG funding of a number of community development projects. Projects jointly funded
include Second Harvest Food Bank’s distribution center, the New Children’s Shelter, Emergency
Housing Consortium’s Homeless Reception Center, and Social Advocates for Youth’s group home
renovations. These efforts are expected to continue.
To ensure a coordinated approach to the City’s human service funding efforts, the CDBG
Coordinator and the Administrator of Human Services meet to review and discuss applications
received through boththe CDBG and HSRAP processes. Additionally, a member of the Human
Relations Commission serves on the CDBG Citizens Advisory Committee to avoid duplication of
effort and to assure collaboration within Palo Alto. The CDBG and housing staff attend and
participate in the semi-annual Human Services Provider Netw.ork meetings coordinated by the
Human Services Division to promote understanding and collaboration among the local public
service agencies.
12
Application for Federal
Assistance
1. Type of Submission:
Application:Non - Construction
Preapplication:
2. Date Submitted
05/15/99
3. Date Received by State
4. Date Received by Federal Agency
Applicant Identifier
B-99-MC-06-0020
State Application ~dentifier
Federal Identifier
5. Applicant Information
Legal Name
CITY OF PALO ALTO
Address
250 Hamilton Avenue
Palo Alto, CA 94301
Santa Clara County
6. Employer Identification Number (EIN):
8. Type of Application:
Type: Continuation
10. Catalog of Federal Domestic Assistance Number:
Catalog Number: 14218
Assistance Title: Community Development Block Grant
12. Areas Affected by Project:
The City of Palo Alto, County of Santa Clare, State of
California
Organizational Unit
Department of Planning & Community Environmen
Contact
’ Suzanne Bayley
(650) 329-2428
7. Type of Applicant:
Municipal
9. Name of Federal Agency:
U.S, Dept. of Housing & Urban Development
11. Descriptive Title of Applicant’s Project:
The City of Palo Alto’s Community Development Block
Grant (CDBG) Program for Fiscal Year 1999/2000
13. Proposed Project:
Start Date I Start Date
07/01/98 I 06/30/00
15. Estimated Funding:
a. Federal
$738,000
b. Applicant $0
c. State $0
d. Local $o
e. Other
$91,000
f. Program Income $95,000
g. Total
$ 924,000
14. Congressional Districts of:
a. Applicant I b. Project
12th Congressional DistrictI 12th Congressional District
16. Is Application Subject to Review by State Executive Order 12372 Process?
Review Status: Program not covered
17. Is the Applicant Delinquent on Any Federal Debt?
No
18. To the best of my knowledge and belief, all data in this application/preapplication are true and correct, the document has been duly authorizedby the governing body of the applicant and the applicant will comply with the attached assurances if the assistance is awarded.
a. Typed Name of Authorized Representative I b. Title c. Telephone Number
June Fleming I City Manager (650) 329-2483
d. Signature of Authorized Representative e. Date Signed
05114199
Funding Sources
Entitlement Grant (includes reallocated funds)
CDBG $738,000
ESG $0
HOME $0
HOPWA $0
Total
Prior Years’ Program Income NOT previously programmed or reported
CDBG $50,000
ESG $0
HOME $0
HOPWA $0
Total
Reprogrammed Prior Years’ Funds
CDBG $91,000
ESG $0
HOME $0
HOPWA $0
Total
Total Estimated Program Income
Housing Improvement Program
Palo Alto Housing Corp.
Total
$25,000
$20,0O0
Section 108 Loan Guarantee Fund
$738,000
$50,000
$91,000
$45,000
$0
TOTAL FUNDING SOURCES $924,000
Other Funds $0
Submitted Proposed Projects Totals $0
Un-Submitted Proposed Projects Totals $924,000
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