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Staff Report 406-07
City of Palo Alto City Manager’s Report TO: FROM: DATE: SUBJECT: HONORABLE CITY COUNCIL CITY MANAGER NOVEMBER 13, 2007 CONSOLIDATED ANNUAL DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT CMR: 406:07 PERFORMANCE AND EVALUATION REPORT (CAPER) FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM FOR FISCAL YEAR 2006/07 This is an informational report and no Council action is required. BACKGROUND The preparation and submittal of a Consolidated Annual Performance and Evaluation Report (CAPER) is a requirement of the U.S. Department of Housing and Urban Development for the receipt of Federal Community Development Block Grant (CDBG) funds. The attached document was submitted to HUD on September 28, 2007, following the required 15-day public review period. It is being provided to the Council for informational purposes only. DISCUSSION The CAPER provides a summary of the resources available and the programmatic accomplishments in affordable housing and community development activities during the 2006/07 fiscal year. It evaluates the actions taken during the year to implement the strategies and objectives described in the Consolidated Plan for the period July 1, 2005 to June 30, 2010, and the progress made in addressing identified priority needs. Summary of Accomplishments CDBG funds were used to reimburse the City housing fund for the acquisition of the Alma Gardens Apartments, which added 10 units of affordable housing to the housing stock during fiscal year 2005/06. CDBG funds were also used to provide minor home repairs and accessibility upgrades to !5 low-income households in the City. In addition, CDBG funds were used to provide architectural work at EHC LifeBuilder’s Sobrato Youth House. All of the public service activities were carried out as anticipated. CDBG funds were used principally for agencies providing services to homeless, very-low income or elderly persons. Some of the agencies funded were Shelter Network, Urban Ministry/InnVision, and the Palo Alto Housing Corporation. These services significantly expanded the service and shelter CMR: 406:07 Page 1 of 2 opportunities for homeless persons and those at-risk of homelessness. Project Sentinel provided fair housing advocacy and complaint investigation services for those who believed they had experienced discriminatory treatment. RESOURCE IMPACT The total investment of CDBG funds in Palo Alto during fiscal year 2006/07 was $566,833. Of that amount, $113,502 went toward public service activities, $151,336 went toward fair housing and administration activities and $294,994 was expended on housing and other capital improvement projects. PREPARED BY: Eloiza Murillo-Garcia, CDBG Planner DEPARTMENT REVIEW: STEXtE EMSLIE Director of Planning and Community Environment CITY MANAGER APPROVAL: EMILY HARRISON Assistant CitY Manager ATTACHMENTS Attachment A: 2006/07 CAPER CDBG Citizens Advisory Committee Palo Alto Human Relations Commission Catholic Charities Clara-Mateo Alliance/InnVision Community Housing Alliance Emergency Housing Consortium Lytton Gardens Mid-Peninsula Alano Club Palo Alto Housing Corporation Project Sentinel Shelter Network Stevenson House Urban Ministry/IrmVision CMR: 406:07 Page 2 of 2 CONSOLIDATED ANNUAL PERFOB2~ANCE Prepared By: Department of Planning and Community Environment Public Review and Comment Period: September 5 - 20, 2007 For Submittal to HUD: September 28, 2007 For information, contact: Eloiza Murillo-Garcia, CDBG Planner (650) 329-2428, or Catherine Siegel, Advance Planning Manager (650) 329-2108 TABLE OF CONTENTS PART Io ][NTRODUCTt©N A. Description of Report .................................................................................................................2 B. Description of Public Review Process ...................................................................................2-3 C. Overview of IdentiiSed Needs and Priorities ..............................................................................3 PART ti.. AFFORDABLE HOUSING .......................................................................................4 A. Resources .................................................................................................................................5 1. Resources Available within the City of Palo Alto .........................................................5 a. Community Development Block Grant (CDBG) Funds .....................................5 b. Local Housing Funds .....................................................................................5-6 c. HOME Investment Partnership Act Funds ..........................................................6 d. Multi-family Housing Program (M_I-IP) Funds ....................................................6 e. Redevelopment Funds ........................................................................................6 f. Public Housing ...................................................................................................6 2. Other Resources Obtained by Nonprofits and Others ....................................................7 a.HUD Section 8 - Moderate Rehabilitation Program .........................................7 b.HUD Project-Based Section 8 ............................................................................7 c.HUD Section 8 - Shelter Plus Care ...................................................................7 d.HU’D Housing Choice Section 8 Rental Assistance ...........................................7 The Housing ~z~uthority of the County of Santa Clara Section 8 Housing Choice Vouchers Issued (Table) ...................................................8 ~o Accomplishments ......................................................................................................................9 1. Programmatic Accomplishments ....................................................................................9 a. New Construction Rental Housing ................................................................9-11 Community Working Group - Opportunity- Cemer Project EHC LifeBuilders - Sobrato House b. Rehabilitation of Existing Rental Housing ......................................11-12 Stevenson House Lytton Gardens - Health Care Facility Economic and Social Opportunities c. Housing Acquisition ...................................................................12 d. Below Market Rate (BMR) Ownership and Rental Procures .................12-13 e. Rehabilitation of Existing Owner Occupied Single Family Homes ..................13 2. Persons and Households Assisted with Housing ..........................................................! 3 Summary- of Housing Accomplishments (HUD Table 1A) ...................................14-15 C. Assessment of Performance ...................................................................................................15 1. Evaluation of Progress in Meeting 2006/07 Goals .................................................15-16 2. Barriers to Fulfi!ling Housing Strategies ................................................................16-17 a. Federal or State Barriers ....................................................................................17 b. Barriers Related to Local Housing Market Conditions .....................................! 8 c. Discussion of Most Serious Barriers ...........................................................18-19 Actions to Address Obstacles to Maintain Affordable Housing ...................................19 a Housing Trust Fund .............................................................................................! 9 Adjustments or Improvements to Affordable Housing Strategies ................................19 a. Public Policies .............................................................................................19-21 b. Development Impact Fees for Housing .............................................................21 P.gART ]~H: CON[MUN]~TY DEVELOPM[EN% .........................................................................22 A. Rese.urces A~ a~laMe ................................................................................................................3 1. City of Palo Alto Non-Housing Community Development Resources .........................23 a. Federal Funds ............................................................................. ..................23 b. Local Funds .................................................................................................23-24 c. Leveraging .........................................................................................................24 B. Acc(}mp~ishme~ts ...................................................................................................................24 1. Summary of Accomplishments with CDBG Funds ...............................................24-25 2. Summary of Community Development Accomplishments (HUD Table 3-1) ......25-27 3. Summary- of Accomplishments, Palo ~to General Fund Money ................................27 4. Summary of Accomplishments with Hamilton Public Benefit Funds ....................27-28 5. Actions Taken to Affirmatively Further Fair Housing ............................................28-30 6. Actions Taken to Address Needs of Homeless Persons ...............................................30 a. Shelter Plus Care (SPC) ..............................................................................30-31 b. Community Working Group .............................................................................3 ! c. Employment Opportunities ...............................................................................31 d. Homeless Services ......................................................................................31-32 7. Antipoverty Strategy .....................................................................................................33 8. Other Actions .............................................................................................................."" a. Lead Based Paint Hazard Reduction .................................................................33 b. Intergovernmental Cooperation ..................................................................33-34 c. Actions to Ensure CDBG Compliance ..............................................................34 9. Changes to Amaual Action Plan ....................................................................................34 C. Assessment of Performance .............’ ......................................................................................34 1. Evaluation of Progress in Meeting Annual Community Development Goals .......34-39 2. Barriers to Fulfilling Strategies .....................................................................................39 3. Adjustments to Community Development Strategies ...................................................39 4. Performance Measurement System Status ....................................................................40 PART IV: APPEND]IX ...............................................................................................................40 A.Copy of Public Review Notice for CAPER B.Summary of Funding Priorities C.Grantee Performance Financial Report for Fiscal Year 2006/07 D.Public Comments iNTRODUCTiON FNTRODUCTX©N Ao Descrit~tio= of Repot* The U. S. Department of Housing and Urban Development (HUD) has created a grants management and reporting system to implement the concept of consolidated planning. The consolidated plarming system is intended to relate and link identified needs within a community to the federal and local resources available to meet those needs, and to strengthen partnerships among all levels of government and the private sector. The annual reporting portion of this system is known as the Consolidated A~ua~ Performance and Evaluation Repor~ (CAPER). Preparation and submittal of the CAPER is a condition for the City (and nonprofit organizations within the City-) to apply for federal community development and housing assistance funds such as CommuniD~ Development Block Grant (CDBG) and Home Investment Partnership Act (HOME) funds. The CAPER provides a summary- of the resources available and the programmatic accomplishments in affordable housing and community development during the 2006/07 fiscal ?:ear. It evaluates the actions taken during the past year to implement the strategies and objectives described in Palo Alto’s Action Plan for the period July 1,2006 to June 30, 2007, and the progress made during the past year in addressing priority- needs and objectives identified in the Consolida, ed Plan for the period July 1, 2005 to June 30, 2010. In October 2006, HUD modified its Consolidated Planning requirements to include a new performance measurement system. The purpose of the performance measurement system is to better capture data on a national level for the activities that are undertaken with CDBG funding at the local level. This new system also helps quantify and measure program outcomes in order to determine how well programs and activities are meeting established needs and goals. This CAPER reports on pro~am progress for the identified objectives and outcomes for each of the activities undertaken. B. Description of Public Review Process A notice regarding the availability of the draft CAPER was mailed to interested organizations and persons. Copies of the CAPER were made available at City Hall. A notice informing the public of the availability of the CAPER was published in the Palo Alto Weekly on Wednesday September 5, 2007. The notice was also displayed on the City’s website during the public review period. A copy of that notice is appended to this report (Appendix A). 2 The draft CAPER was available for public review and comment for a 15-day period, beginning Wednesday, September 5, 2007 and concluding at 5:00 p.m. on Thursday September 20, 2007. Copies of the draft report were available at the Planning Department reception desk, the Development Center, and on the City’s CDBG website. There was one comment letter received by the City. A copy of the letter and staff responses are appended to this report (Appendix D). C. Overview of][den*ified Needs and Fundin~ Priorities Palo Alto’s housing and community development needs were identified in the Consolidated Plan for the period July 1, 2005 to June 30, 2010. Not surprising, the provision of affordable rental housing units was identified as the most critica! need in Palo Alto. This includes the provision of housing affordable to persons who are homeless, or at-risk of homelessness, and persons with special needs such as the frail elderly, developmentally disabled, physically disabled, or persons with severe mental illnesses. While all types of housing are needed in the City, the Consolidated Plan objectives focus on the creation and preservation of rental housing. Permanent housing for families with children, homeless individuals and those "at risk" of becoming homeless, persons with special needs, and elderly persons are the highest priorities idemified in the Consolidated Plan. While the creation of additional new units of affordable housing is the most desirable option, the preservation of existing subsidized units that are at-risk of converting to market rate units is also a high priority, need. Non-housing communiD’ development needs in Palo Alto include public services and public facilities and improvements. Public service needs include supportive services and emplo}qnent opportunities for lower income, at-risk, homeless, or disabled populations. There is also a need to expand, modernize, rehabilitate, and make accessibili)- improvements to existing public facilities serving the same populations. See Appendix B for a summaD, of the 2005-2010 Consolidated Plan Goals and Objectives. Of the total 2006/07 CDBG allocation of $995,784, 73 percent was allocated to housing activities, 12 percent toward public services, and 15 percent for fair housing and pro~am administration. AFFORDABLE HOUSING Resources a. Community Development Block Grant (CDBG) Funds In fiscal year 2006/07, the Ci~ of Palo Alto allocated a total of $995,784 in federal Community Development Block Grant (CDBG) funds. This amount represents an entitlement allocation of $711,680 from HUD, $45,000 in anticipated program income, $78,319 in excess program income received in prior years, and $160..785 in funds reallocated from other activities. Of the total CDBG allocation, $730,946 or 73 percent was allocated to housing-related projects. b. Local Housin~ Funds The City of Palo _Alto maintains a local housing trust fund that has two sub-funds: the "Commercia! Housing Fund" fund and the "Reside~_tiai Housing Fund" fund. These are the only local sources of funding and subsidies for affordable housing within the City. They are used to provide matching funds, to pay for expenses which exceed HUD cost limits, to fund the cost of features and amenities ineligible under federal housing programs, for pre-development expenses, feasibility studies, site acquisition and similar purposes. Commercial Housin~ Fund: Palo Alto requires commercial and industrial development projects to pay a housing mitigation fee under Chapter 16.47 of the Municipal Code. The fees are deposited in the Commercial Housing In-Lieu Fund, and the accumulated fees and interest earned on the fund are made available only for the creation of new low and moderate-income housing units under the "Housing Reserve Guidelines" adopted by the City Council. The Commercial Fund has an available balance of approximately $1,600,000. Residential Housin~ Fund: Pursuant to Program H-36 (the Below Market Rate Program) of the City’s adopted Housing Element, Palo Alto collects housing in-lieu fees from residential developments when it is infeasible to provide below- market rate units on-site. These fees, along with interest earnings of the Fund and other miscellaneous revenues related to housing, are placed in a special fund - the Residential Housing Fund. This fund, per adopted Ci~- policy, is used mainly to provide funding for acquisition or rehabilitation of low and moderate-income housing, but may also be used for assistance to new housing construction projects. The Residential Fund has an available balance of approximately $500,000. c. Home Investment Partnership Act (HOME) Funds The City of Palo Alto is not an entitlement jurisdiction for the ~%deral HOME program. The City is only eligible to apply for HOME funds through the State of California HOME program. No applications were submitted in fiscal year 2006/07. d. Multifamilv Housin~ Program (MHP) Funds The Multifamily Housing Program (MHP) was created in 2002 as a result of the passage of Proposition 46. Additional funding has been provided by Proposition 1C which passed in 2005.. MHP provides low interest loans to developers of affordable housing as well as funding for new and existing local housing trust funds. A local housing trust fund is a public, or private partnership created to receive on-going revenues for affordable housing production. The City of Palo Alto applied for and received a ~ant from the State in February 2004. The City’s $1,000,000 award has been committed to the Alma Street Affordable Housing project sponsored by Eden Housing and Community Housing Alliance. The project will provide about 50 very low and extremely low income rental apartments for families. e. Redevelopment Funds The City., Council approved an ordinance on July 9, 2001 to establish a redevelopment agency for the City of Palo Alto. To date, the City has not established a Redevelopment Project Area and no redevelopment funds have been created. f Public Housing There are no units of public housing in Palo Alto. 2o Other Resources Obtained by N(~pr(~fits a~d Others a. HUZ) Section 8 - Moderate Rehabilitation Program - 37 Units Palo Alto Housing Corporation (PAHC) owns and manages a number of apartment buildings where a portion of the units have rents subsidized under the old Section 8 Moderate Rehabilitation program. The Section 8 - Moderate Rehabilitation Program currently provides rental assistance for 37 PAHC units (Oak Manor, 23; Curtner, 9; Emerson South, 5). Project-based Section 8 contracts under this rental assistance program, originally ,~-ritten for terms of 5 to 15 years, ha;~e all expired and are now renewed on an armual basis. All of the contracts for the units expire in either 2007 or 2008. b. HUD Proiect-Based Section 8 - 52 Units The Housing Authority of the County of Santa Clara administers the Section 8 Rental Assistance Program for Pa!o Alto. There are currently 52 units of project based Section 8 rental assistance available in Palo Alto. P~a~-IC has 8 units (Emerson North, 1 ; Emerson South, 1; Ferne, 1; Ventura, 2; Waldo, 3), Stevenson House has 23 units, and the newly constructed and occupied Opportunity Center has 21 Section 8 units. All project based vouchers are renewed annually by c. HUD Section 8 - Shelter Plus Care - 8 Units During fiscal year 2006/07, the Housing Authority of the County of Santa Clara provided 8 units of Shelter Plus Care rental assistance vouchers for previously homeless persons participating in the County’s Shelter Plus Care (SPC)program. Seven units are available at the single room occupancy, Barker Hotel, 10 units are available at Alma Place Apartments, one unit is available at Plum Tree Apartments, and one unit at Waldo Apartments. During the period July 1, 2006 to June 30, 2007, eight previously homeless individuals were provided with housing through the program. All eight of the program beneficiaries were very. low or extremely low income. Please see a more complete discussion of the Shelter Plus Care Program in the Community Development Section of this report. d. HLrD Housin~ Choice Section 8 Rental Assistance - 209 Units The Housing Authority of the County of Santa Clara reports that 209 households in Palo Alto received tenant-based Section 8 rental assistance vouchers in fiscal year 2006/07. These vouchers are provided to qualified persons who may use the vouchers at any rental site in the County that has been approved by the Housing Authority. This number represents a 13 percent decrease from the 239 households who used vouchers in Palo Alto in 2005/06. There are currently 879 households with Palo Alto addresses on the Housing Authority’s waiting list for Section 8 Housing Choice vouchers. Of the 879 households, 226 are disabled, 188 are elderly, 67 are both disabled and elderly, and 398 are non-disabled!non-elderly. In total, 306 households were assisted with Section 8 rental assistance vouchers in Palo Alto in fiscal year 2006/07. 209 were tenant-based Housing Choice vouchers, 52 were project-based vouchers, 37 were moderate rehabilitation program vouchers, and 8 vouchers were provided through the Shelter plus Care program. The following statistics describe the participant characteristics for the 209 Section 8 tenant-based rental assistance vouchers in Palo Alto: 0 bedrooms 6 The Housing Authority of the County of Santa Clara Section 8 Housing Choice Vouchers ]Issued in PaSo ARo FY 20~)6/07 1 bedroom 139 Certificate/Voucher Size 2 3 4 bedrooms bedrooms bedrooms 47 17 0 5 Total bedrooms 209 White 138 Black 22 Distribution by Raciat Grou~, AsianAmerican India~lL~askan Native Hawaiian/ Pacific Islander 2 47 0 Total 209 Distribution by Ethnic~D’ Hispanic Non-Hispanic Total 16 193 209 Low Income (51- 80% of Median) Very. Low (31- 50% of Distributio= by Income Extremely Low -~ oZMedian)(Less than z0~ o of Median) 6 191 Total 12 209 ]Distribution by Status Elderly Disabled Elderly Non-Elderly/Total and Disabled Non-Disabled(Non-Elderly) Head of Household Male Female TOTAL 64 145 209 ]8. Accomplishments 1. Programmatic Accomp~shmen¢s The City of Palo Alto, by itselL and in conjunction, with nonprofit housing developers, undertook the following activities to meet its priorities for affordable housing development and assistance as stated in the FY 2006/07 Armual Action Plan of the Consolidated Plan. a. New Construction Rental Housin~ Cemmunitv Workin~ Group - OpportunRv Ce~.ter Prs, iect The Opportunity Center, sponsored by the Community Working Group (CWG), held its grand opening on September 17; 2006. CWG partnered with the Housing Authority of the Count), of Santa Clara and IrmVision to acquire and develop the site. The project consists of a newly constructed four-story building on an 18,178 square foot site. The ground floor is occupied by a 9,000 square foot facility- that provides social and supportive day seladces for homeless adults and families. The upper three floors consist of 88 units of affordable housing, plus a resident manager’s unit. 70 of the rental units are single room occupancy (SRO) studio units; 12 have one-bedroom; and six have two-bedrooms. The overall cost of the project was approximately $23 million, $20 million for the rental housing, and $3 million for the service center. The initial rent-up of the faci]iU~ was completed on December 27, 2006. At the initial rent- up, 5 units were occupied by elderly tenants, 46 units were occupied by tenants with disabilities, 42 units were occupied by tenants who had previously been homeless, 21 units were occupied by tenants who had previously been chronically homeless, and 14 units were occupied by female-headed households, in households consisting of more than one person. CWG raised private sector funds to create a multi-million dollar endowment for the Opportunity Center. The interest and earnings of the endowment currently provide about $200,000 a year in rental subsidies for 23 extremely low-income tenants. The Mental Health Partnership Grant provides rental subsidies for an additional ten extremely low-income tenants hmVision, an experienced provider of homeless services and transitional housing, provides for the operations and ongoing operating costs of the homeless service center. The housing portion of the project is owned by a tax credit limited partnership - Opportunity,- Center Associates, L.P. The General Partner of the limited partnership, Opportunity Center HCD, Inc. is a 501c3 non-profit affiliated with the Housing Authority of the County of Santa Clara. A total of $1,280,000 in Palo Alto CDBG funds were provided for the homeless service center portion of the project. The Cit3~ of Palo Alto also contributed $750,000 from the Residential Fund for the development costs of the 89 housing units. Other federal funding came from Santa Clara County @IOME & CDBG) and San Mateo County (HOME). A $400,000 HUD McKmney grant was provided through the Community Working Group. Other major funding programs used included the State’s MHP, tax credits and tax exempt bonds for construction loans. Santa Clara County provided $1.5 million of their own local affordable housing fund monies in addition to federal funding. OPPORTUNITY CENTER PERMANENT SOURCES OF FUNDS Apartments State HCD: Muir!family Housing Program Loan State HCD: NSSS Loan Limited Partner Equity (MMA Financial, LLC) (estimated) Santa Clara County Office of Affordable Housing Loan Ci~ of Palo Alto: Residential Fund Loan Lenders for Community Development (Housing Trust of Santa Clara County) Count}, of San Mateo General Partner Equity (estimated) (Includes. $400,000 HUD McKinney grant from CWG) Tota~ estimated funding for apartments $7,000,000 $5O0,OOO $7,279,000 $1,500,000 $750,000 $500,000 $450,000 $1,524,439 Service Ceater Santa Clara Count3, Office of Affordable Housing City of Palo Alto: Community Development Block Grant Program CWG Equity (estimated) Tota! estimated fund~,ng for service center $1,000,000 $1,280,000 $513,707 $2,793~7~7 TOTAL ESTIMATED SOUX-:~.CES OF ~UNDS FOR PRO~CT 22,297,146 EHC LifeBuilders - Sobrato House Location: 496 South 3rd Street, San Jose, CA EHC Lifebuilders is currently building Sobrato House, a new project to house homeless and at-risk youth between the ages of 11 and 24. The project is being built to replace the "Our House" youth program that was displaced by the new San Jose City Hall. The CiD of Palo Alto provided $75,000 in CDBG funds in 2006/07 which funded a portion of the architectural expenses for the project. Total project costs are expected to be approximately $12.5 million. Once open, Sobrato House is expected to serve over 500 homeless, at-risk, or runaway’ youth per year. The development will provide 10 beds of emergency shelter in 3 bedrooms; 8 beds of transitional housing in two 1-bedroom flats, and two two-bedroom townhouses; and 20 beds of housing for youth participants in the City Year Progam in three 2-bedroom townhouses, one 1-bedroom flat, and one 3-bedroom fiat. The facility wil! also include a drop-in center, medical office, computer room, classroom, and laundry- facility. Once operational, EHC staff will provide case management, job training, tutoring and an array of other supportive services to assist the young clients. It is anticipated that the project will be completed on October 1, 2007 with initial rent-up and occupancy by October 15, 2007. SOBRATO HOUSE ES%ir,~ATED FUND][NG SOURCES San Jose Redevelopment Agency (RDA) San Jose RDA ~oan) Sobrato Loan San Jose Housing Department SCC -Office of Affordable Housing EHAP Housing Trust SCC - CDBG Palo Alto - CDBG Mountain View- CDBG Surm>wale - CDBG Milpitas - CDBG Los Gatos - CDBG Private & Other Total Budgeted Project Costs 4,200,000 450.000 1,230.000 .025,000 1,000.000 1,000.000 240.000 366.167 75.000 75.000 50.000 50 000 25,000 1.74~.121 12,539,288 Stevenson House Location: 455 Eo Char~esto~ Road, PaSo Alto Palo Alto Senior Housing Project, Inc. had two CDBG funding awards in 2006/07. Both awards were for rehabilitation projects at Stevenson House, a 120 unit affordable housing complex occupied by 135 low income seniors. The first award was in the amount of $47,646 to replace and upgrade the fire alarm system and bring it up to current fire code regulations. The second award was for $370,000 to replace the sliding glass windows and doors in the common areas and in some of the residential units with double paned glass to make the buildings more comfortable and energy efficient. Both of these projects were delayed, but are now moving forward. A contractor was selected for the fire alarm project after completion of the bid solicitation process. A pre-constmction conference was held on May 30, 2007, and work is expected to be completed by the end of October 2007. A contract and regulatory agreement for the window and door retrofit project was prepared in July 2007, and approved by the Cit?.~ Council on August 6, 2007. It is anticipated that the work on that project will be completed by March 2008. Lytton Gardens - Health Care Facility Location: 437 Webster Street, Pa!o Alto Lytton Gardens was awarded $86,575 in 2005/06 CDBG funds for accessibility improvements to the bathroom sinks and countertops in the long-term care section of the health care facility. The Lytton rehabilitation work was to have been managed and completed by Economic and Social Opportunities (In.SO). The Lytton project experienced major delays due to ESO’s capacity/financial problems, and their subsequent closure. A new contract with Lytton Gardens was prepared and approved by the CiD; Council in July 2007. The project is expected to be re-bid in September and to be completed by the end of 2007. Economic and Social Opportunities (ESO) was awarded $60,000 in CDBG funds to provide minor home repairs and accessibility improvements, such as ramps and grab bars, for 26 low-income residents of Palo Alto. Unfortunately, the agency filed a Chapter 7 bankruptcy petition in late July. $15,281.00 of this grant was expended to assist 13 elderly households with accessibility improvements and minor repairs. Nine of the units improved were renter occupied and four were owner-occupied. c.Housin~ Acquisition Corarnuni~ ~ousing Aiiiance- Atm.a Garden Apar~vaents Location: 2507-2533 A~rna Street,~ ?2a~o AR, o The City awarded $900,000 in FY 2005/06 CDBG funds and a pre-award of $250,000 in FY 2006/07 CDBG funds to Communits, Housing Alliance for the acquisition of an affordable housing site in April, 2006. The site consists of a 10-unit apartment complex, with 8 studio units and 2 one-bedroom units. The project will be operated for the benefit of very low-income and low-income residents of palo Alto. CHA hopes to redevelop the project at a higher densi~, in the future, while still maintaining its level of affordabili~,. Currently, three of the households are extremely low income (0-30% of area median income), three are very low income (31 - 50% of median), and three are low income (51 - 80% of median), two are female headed households, two are disabled, one was previously homeless, and one was previously chronically homeless. One tenant receives a Section 8 subsidy. d. Belo,a’ l~Iarket Rate (BMR) OwnersMp & Ren~M ProRrams The oldest BMR units were built in 1975 and the ls’pical development includes from one to four BMR units. Fifty percent of the inventory was built in the 1980’s and thirty-four percent were built between 1975 and 1979. The City and Palo Alto Housing Corporation initially became aware of the problems facing BMR owners in condominium projects facing large special assessments for capital repairs in Februars, 2001. On September 9, 2002, the City Council established a BMR program emergency fund as an ongoing permanent program to prevent the loss of BMR units and provide emergency loans for BMR unit owners for substantial mandatory assessments. The program is also aimed to preserve BMR unit housing stock by preventing loss through foreclosure or through the resale process. The Council approved loan program criteria and loan terms and !2 appropriated $150,000 from the Residential Housing fund to the BMR Emergency Fund A loan program was developed to address these issues and is available on an as-needed basis. There are two types of BMR units, home ownership and rental units. The status of each of the types of units is described below. ]~MR Home Ownership Units. The Below Market Rate Program is a City program in the Comprehensive Plan (Program H-36) which requires developers of market rate housing to provide a certain number of units within each residential project at affordable prices to moderate income buyers (usually 15% of the total units). The BMR units are sold to households on a waiting list with 59-year deed restrictions on use, occupancy and the resale price. As of June 30, 2007, there were 179 units in the ownership program im, entory. ]BMR Rental Units. This is the rental-housing component of the City’s BMR inclusionary housing program. There are 155 BMR rental units in multi-family rental developments in Palo Alto. These units are rented at below market rents to very low and low-income eligible households. The specific income eligibility varies from project to project; however, the City’s current guidelines ~carget the rental program to households between 40% and 70% of the County- Median Income. The initial 63 units of BMR rental housing in the 628-unit Stanford West Apartments on Sand Hill Road were occupied in 2000-01 ; 42 additional units were occupied during the last fiscal year. An additional 52 BMR rental units will be added by 2015. Employees of Stanford University, and persons working for businesses located on Stanford owned lands, have priority for occupancy at the Stanford West project because the housing has been developed and is owned by Stanford. It is not intended as student housing. During this period, 12 BMR rental units were completed at the Sunrise complex for seniors, but they have not yet been occupied. e. Rehabilitation of ExistinR~ ©wrier-Occupied Sin.gle Farni~v Homes The City may provide CDBG funds to very low-income owners for home repairs in cases where there is an urgent need for City financial assistance due to serious health or safety problems. During the year, there were no applications for this program. Persons and Househol.ds Assisted -,vith Housing The attached Table 1A shows 88 households assisted with rental housing during the period covered by this report. These units are at the newly constructed Opportunity Center at 33 Encina Way in Pa!o Alto. Although, there are 89 units total at the complex, one is occupied by a resident manager. The table counts the 125 persons who originally occupied the 88 units at the Opportuni~, Center. The Alma Gardens Apartment residents were counted last year, and the Sobrato House residents will be included in next year’s report. Not included are units assisted with Shelter Plus Care, counseling serv;ices, or homeless persons or households who receive overnight shelter. These activities are discussed in Part III of this report. (HUD %aMe Name of Grantee: Cit~~ of PaSo Alto St, a~e: CA Program Year: Renters 0- 30% of Median Family Income (MFI) * 31 - 50% o~MFI 51 - 80% of MFI Owners 0- 30% of MFI 31 - 50% of_k~tFI 51 - 80% of MFI To~a~ Homeless ** Individuals (units) F~ilies Tota~ Non-Homeless Special Needs To,at To,at TotM 2t5 ~ous~ng Ac~ua~ U~,¢s 86 2 63 88 TOTAL HOUStNG White 51 Black/African American 27 Asian 2 American Indian!Alaska Native Native Hawaiian/Other 2 Pacific Islander Black/African American 1 and White Asian and White 3_4 TOTAL HOUS]~NG American Indian/Alaska Native and White American Indiar~/Alaska Native and Black/African American Balance/Other 5 Total Race 88 TOT. OUS N, Hispanic 5 Total Etgnici~5 *As annually adjusted by HUD **Homeless families and individuals assisted with transitional and permanent housing Assessment of Performance !o Evaluatio~ of Progress in M[eeting A~anua~, (2006/07) Goa~s The following housing goals were identified in the 2005-2010 Consolidated Plan. Accomplishments in meeting the goals for the 2006/07 fiscal year are also listed. Goal # t: Increase the Supply of Affordable Renta~ Housing by 125 units 2006/07 Activi~;: Opportunity Center new housing construction 33 Encina Way Palo Alto, CA 94301 2006 Accomplishment: 89 housing units Goa~ #2: Preserve the Supply of 72 units of Affordab.~e Rental ~ousing and ]~mmediate Risk of Conversion to Market-Rate Housing 2006/07 ActiviD-: There were no units at immediate risk of conversion to market-rate housing during this fiscal year. Goa~ #3: Conserve tlae Condition of Existing AffordaMe Renta~ Housing 2006/07 Activities: Stevenson House - Alarm Project and Window and Door Project 455 E. Charleston Road Palo Alto, CA 94306 2006 Accomplishment: pre-construction activity Lytton Health Care - Sink Renovation Project i5 437 Webster Street Palo Alto, CA 94301 2006 Accomplishment: pre-construction activity Goa~ #4: Con~in~se the Below Marke~ Rate (BMR) Program 2006/07 Activity-: City- of Palo Alto BM-R Homeownership Program Units are located citpvide 2006 Accomplishment: Marketing and sales were underway during FY 2006/07 for the first phases of the Arbor Real (34 BMR units) and Vantage (12 BMR units) housing projects. Goat #5: Continue So Participate in the >~orCgage Credit Certificate Program 2006/07 Activit-y: The City, of Palo Alto continued to participate in the mortgage credit certificate program. Goat #6: Provide for Rehabilitation, Loans to Low- and Moderate-income Single Family Homeowners in Emergency or Crisis Si~tuations Only 2006/07 Activity: This program was available on an as-needed basis and only if CDBG funding is available. There were no applications submitted for this program during the fiscal year. Goat #7: Provide for ir~.inor [~ome Repairs and AccessibfliW Upgrades to. Low- and ?~[odera~e- 2006/07 Activity: Economic and Social Opportunities - Accessibilily and Home Repair Services Program Office: 1445 Oakland Road San Jose, CA 95112 Activity was available city~;ide. 2006 Accomplishment: 13 housing units assisted. The primary affordable housing goal in the 2005-2010 Consolidated Plan is to assist an average of 25 units per year over the five-year period, or a total of 125 units. During the first two years of this five-year period, the City has already provided a total of 99 new units. Housing activities are multi- year in nature and there are a number of new projects in the development stage. The City’s greatest need is affordable housing, and the majority of CDBG and local housing funds have been targeted and expended to preserve or increase the affordable rental housing stock. All of the CDBG funds have been used to carry out activities that benefit low-income persons. 2. Barriers to Fu!fitli=g Housing S~rategies There are many barriers that Palo Alto faces in meeting its affordable housing strategies, most of which are beyond the control of the City..Palo Alto has one of the most expensive housing markets in the country, due in large part to the lack of land suitable for new housing. Most of the City’s development potential consists of infill on small vacant lots, redevelopment of existing properties, and conversion of underutilized non-residential lands to higher density residential or mixed-use projects. Other uses, such as churches, and educational facilities, compete for this limited supply of residential land. Between 1996 and 2000 the median price of ownership housing more than doubled in Palo Alto. Average rents were also estimated to have doubled over the same time period. Although there have been dips in the economy, housing prices have continued to rise. Almost all for-sale and most rental properties are still out of reach for al! but households with above moderate incomes. In addition, there continues to be a low vacancy rate for rental housing. As of June 29, 2007, the rental vacancy rate in the City" was 1.63%. Some of the barriers to building more housing are the result of decisions and priorities set by federal or State governments that must decide how to distribute very limited funding. The policies and priorities set by these agencies often do not favor high cost areas, and most federal housing resources are not readily available to the City of Palo Alto. Some of these barriers include: the lack of congressional appropriations for certain programs; limitations in federal regulations that make some programs very difficult to use in Palo Alto; the lack of appropriate and available housing sites; and a lack of interest or capability on the part of for-profit and non-profit developers in pursuing some federal programs. The principal barriers to fulfilling the City’s afibrdable housing goals and objectives are discussed below. a. Federal or State Barriers: Changes by the State’s Tax Credit Allocation Committee in the method of detem-tining awards for the competitive federal and State housing tax credits has made it more difficult to obtain tax credit awards for low-income rental housing. There are also vev restrictive caps that limit the total amount of tax credit awards within certain counties including Santa Clara County. There is far greater demand in Santa Clara County for the competitive tax credits than the amount allowed under the allocation cap. There are problems of utilizing federal housing programs, such as Section 202 and 811, in areas with high construction and land costs. HUD places limitations on the amount of HUD subsidies, which then result in the need for large local funding contribmions to make projects financially feasible. The amount of federal CDBG funds that the City receives on an entitlement basis from HUD has not kept pace with inflation over the last 15 years. The barrier of not being qualified for HOME funds on an entitlement basis has significantly affected the City’s capability to encourage and fund affordable housing. Other barriers are: The lack of State or federal funding-for the preser~’ation of older, HUD-subsidized and Section 8 assisted rental housing by acquisition by nonprofit housing organizations Reduction in the term of project-based Section 8 contract renewals from the 20-year contracts of the 1970’s to the one-year renewals presently authorized by Congress. Limited funding in HUD’s budget for the Section 8 tenant-based assistance program (Section 8 certificates and vouchers administered by !ocal housing authorities) since FY 1994. b.Barriers Related to Local Housin~ Market Conditions: Limited vacant land suitable for housing construction and strong competition from developers of market-rate housing, commercial projects and other uses such as private schools for any available site. Extremely high prices for sites suitable for new housing and for existing residentia! properties suitable for acquisition and rehabilitation. ,/ Limited local funding sources for affordable housing. An extremely low vacancy rate and high housing demand means that even modest rental units are occupied by households with incomes above the HUD low-income limit. This means that acquisition and/or rehabilitation pro~ams must relocate existing tenants in order to utilize federal funds. ,/Low vacancy rates and high rental rates have made it difficult for persons to find housing in Palo Alto using tenant-based Section 8 Certificates and Vouchers. c. Discussion of Most Serious Barriers: The most serious barrier is the lack of dependable access to HOME funds. The fact that the City does not qualify as an entitlement jurisdiction for HOME funds is a significant barrier to meeting the City’s housing objectives. The HOME Investment Partnership Act is the principal federal housing pro~am directly available to local governments. The City can only obtain funding on a competitive basis through the State of California’s statewide allocation. The State holds only one competition round each year. Palo Alto is at a disadvantage in the State’s process because of the percentage of ranking points assigned to rural applicants and those from jurisdictions with high poverty,-rates. The maximum award from the State is $1 million per applicant for projects using 9% Low-Income Housing Tax Credits and up to $3.5 million for projects not using 9% tax credits. While the City and PAHC successfully obtained and implemented a major acquisition and rehabilitation of the 26-unit Barker Hotel SRO with a FY 1992 HOME pant from the State, the City has not been able to access the State’s HOME funds since that time. There are many obstacles that have prevented the City from obtaining HOME funds. The primary obstacles are listed below-: Extremely high demand and competition for State HOME funds requires that applications be near perfect to receive funding. The State’s rating criteria favors rural and Community Housing Development Organizations (CHDO) applicants, and jurisdictions with high rates of poverb~. Since Palo Alto does not fit these priorities, the City- is at a great disadvantage in the competition. There are no qualified CHDOs operating in the Palo Alto area, and the local nonprofit housing developers are not interested in creating CHDOs and pursuing HOME funds directly. --/The State’s once per year application process is too inflexible for use with the kind of major rental, housing projects that are usually done in Palo Alto. It is unlikely that project timing and readiness will coincide with the State’s application schedule in a maimer that will earn maximum points. ¯/ The State’s rating criteria strongly favors applicants with very recent HOME project experience. Another serious barrier is the expiration of project-based Section 8 contracts and insufficient funding from the Federal government for contract renewals. Some ofPalo Alto’s largest subsidized housing developments have project-based Section 8 rental assistance contracts which have expired or will expire in the next few years. Most of these projects are owned and operated by nonprofit housing organizations that desire to continue the low-income use under their HUD insured financing and regulatoo~ agreements. Renewal of the Section 8 rental assistance contracts for al! these projects is critical in order to preserve affordable rents for the extremely low-income tenants who occupy these units. Many of these projects serve elderly and disabled persons who would find it very, difficult to move, and who would unlikely be able to secure comparable housing even if they were provided with a Section 8 voucher. 3. Actions to Address Obstacles ~o ~{aintain Affordable Housing or Eliminate lgarriers a. Housin~ TrustFund When the Santa Clara County Board of Supervisors, Silicon Valley Manufacturing Group, Santa Clara CounU, Collaborative on Housing and Home]ess Issues, and the Commmfity Foundation of Silicon Valley founded Santa Clara County, Housing Trust Fund, the City.’ of Palo Alto was among the contributors that raised initial seed capital of $20 million in its first two years. The City initially contributed $500,000 from the local Residential Housing Fund. The City’ has allocated an additional $150,000 to the Trust to be used exclusively for quali@ing affordable housing projects located within Palo Alto. The Trust is dedicated to building and sustaining a revolving loan fund and grant- making program that will leverage other housing resources throughout Silicon Valley. The Trust’s three emphases are creating more affordable rental housing, first-time homebuyer opportunities and housing for the homeless. 4. Adjustments or Improvements to AffordaMe Housing Strategies a. Public Policies ~ Housing Element The Housing Element of the Comprehensive Plan is the chief policy document describing the City’s housing needs and the policies and progams the City will use to meet those needs. The current Housing Element was adopted by the City Council on December 2, 2002, and contains strategies to meet the City’s fair share of the region’s market rate and very, low, low- and moderate income housing needs as defined by the Association of Bay Area Governments (ABAG). For the period 1999 to 2006, the City ofPalo Alto’s share of regional housing production goals was !,397 19 housing units. The following chart shows the City’s total achievements for the period in meeting the required units by income category: Income Category Ve~, Low Income (Less than 50.% of Median) ..... Low Income (50%-80% of Median) Moderate Income (80%- 120% of Median) Above Moderate (Ove~ 12%.of Median) Total ABAG AcMevements 1999 ABAG Allocation 265 116 042 673 1397 Achieved (Permits Issued) 214 130 134 1,955 Percentage Achieved 81% 112% 39% 290% 167% On July 17, 2007 ABAG’s Executive Board adopted the draft Regional Housing Needs Allocations for all the jurisdictions in the San Francisco Bay Area for the period 2007- 2014. The release of the draft allocations begins a 60 day public comment period. Jurisdictions will have until September 18, 2007 to request revisions to their allocations. Total projected regional need was determined to be 214,500 housing units. Palo Alto’s total allocation is 3,505 units, to include 846 very. low-, 666 low, 786 moderate, and 1,207 above moderate income units. The City- plans to request a re-vision to the allocation due to the 250% increase in the allocation over the previous period.. The increase is based on a new methodology that weights local housing, employment and transit factors as follows: Housing 45%, Employment 45% and Transit 10%. Main policies and programs included in the Housing Element address: Increasing the Supply of Land Suitable for Housing Using Existing and Planned Residential Lands More Efficiently and Intensively Modifying and Strengthening Existing Policies to Increase the Supply of Affordable Housing Using Legislative Powers to Promote Affordable Housing Reserving 16 sites identified on the Housing Sites Inventory- for higher density housing ~Zoning Ordinance Update. In July 2007, the City Council adopted the last of numerous revisions to the City’s Zoning Ordinance bringing to completion the Zoning Ordinance Update, which has been underway for the past seven years. The new Zoning Ordinance implements approximately 100 policies and pro~ams 2O from the Comprehensive Plan designed to facilita~ce a wide variety of housing types and to encourage residential mixed use development of commercial lands. Tt~ree new land uses permitted by the new codes are: Village Residential, Mixed Use, and Pedestrian!Transit Oriented Development as well as key policies addressing housing, parking, urban design and zoning ordinance format. b. Development Impact Fees for Housin~ On March 25, 2002, the Ci~, Council approved modifications and additions to Impact Fees collected for residential and commercial development projects. The Impact Fees are now comprised of three categories: Housing, Traffic and Community Facilities. The key change in the Housing fee was to increase the fee from $4.21 per square foot to $!5.00 per square foot and require that an annual cost of living adjustment be made. The current rate as of May 8, 2007 is $16.52 and applies to nonresidential development. The fee rate applies to all net new commercial square footage on a site. Full payment is required at building permit issuance with some exemptions, such as hazardous material storage, churches, colleges and universities, commercial recreation, hospitals and convalescent facilities, private education facilities, public facilities and private clubs, lodges and fraternal organizations. C©MMUN~%Y ]~VEL©PMEHi~ Ao Reso~rces Available a.Federal Funds The primary federal resource in the City of Palo Alto for non-housing community development activity is the Community Development Block Grant (CDBG) Program. The City of Palo Alto is an entitlement jurisdiction under the CDBG regulations and receives annual funding on a formula basis. The purpose of the CDBG program is to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low and moderate-income persons. The Ci)~ receives no other direct federal funding for community development projects. As explained earlier in this report, the amount of CDBG funds available for allocation in 2006/07 was $995,784. In fiscal year 2006/07, the City allocated a total of $113,502 to public sen:ice activities, and $151,336 to fair housing activities and CDBG pro~am administration. b. Local Funds ~Human Service Resource Allocation Process (HSRAP) The City of Palo Alto provided $1,250,402 in General Funds in 2006/07 to address priority human service needs in the community. The funds were allocated through the Human Service Resource Allocation Process (,HSRAP), and administered by the Office of Human Services in the Community Service Department. The projects funded addressed the Human Relations Commission’s priority needs in the following categories: nutrition, childcare, youtD’teens, seniors, homeless!low income, disability, information and referral, mediation, domestic violence, and health care. ~ Hamilton Public Benefit Program for Senior Serv-ices In 1993 the City of Palo Alto entered into an a~eement with Hamilton Avenue Properties regarding the public benefit portion of a Planned Community (PC) zone change. The PC allowed development of a senior condominium project with 36 residential units. The a~eement called for a $500,000 contribution to the City for the establishment of an endowment fund to benefit seniors and senior services, payable in armual installments of $50,000. Additionally, upon resale of all the original units, a fee of 2-½% of the sales price of the unit shall also go into the fund. In fiscal year 2001/02, the tenth and final installment of $50,000 was disbursed to Avenidas, the 23 local provider of services for seniors. Avenidas began receiving quarterly interest payments in August 2003 as an additional provision of the agreement. c. Levera~in~ All of the local non-profit agencies leverage CDBG, HSRAP, and other funding with money from local organizations such as the United Way, corporations, foundations, and individual donors. ]3o Accomplishments !o Suznmary of Accomplishments with C]DBG Funds The appended financial expenditure report summarizes the accomplishments of each activity funded with Community- Development Block Grant funds in 2006/07. The report also specifies the number and race/ethnici~ of persons or households who benefited from the activities. Following is a brief recap of the accomplishments of the public service and other community development activities that were completed during the 2006/07 fiscal year with CDBG funds. $20.270 to the Palo Alto Housin~ Corporation. Provided counseling sessions for very- low income residents of two Single Room Occupancy (SRO) residences, the Barker Hotel and Alma Place (many of whom were previously homeless). $7,760 to Emersencs; Housin~ Consortium. Provided homeless persons with supportive ser~,ices and shelter nights in emergency shelter and transitional housing pro~ams. $26.800 to Project Sentinel. Investigated cases involving allegations of housing discrimination in Palo Alto, and provided outreach and education services. $16.375 to Shelter Network. Provided transitional housing and supportive services to homeless families and indi~,iduals in Menlo Park and Redwood Ci~~. $37.047 to InnVision for the Clara Mateo Alliance Homeless Shelter. $18,322 for the single persons shelter and $18,725 for the family shelter wing in the Veterans Administration facility- in Menlo Park. Agency provided shelter and supportive services to homeless individuals and families. $21.250 to InnVisiorv’Urban Ministry for the provision of services at their homeless drop- in center located at the Opportunity Center and the Hotel de Zink rotating shelter. $5.000 to the Mid-Peninsula Alano Club for the center’s operating costs. The center provided a meeting place for various recovery goups including Alcoholics Anonymous and Narcotics Anon~vmous $5.800 to Catholic Charities for the long-term care ombudsman program which provides advocacy for the residents of long-term care facilities within the City No investments were made in areas of minority concentration. The chart on the following pages reflects the accomplishments and beneficiaries served with 2006/07 CDBG expenditures: Sumw.’aD" of Communi,~ Deve[,opment Accomplishments fc, r Pub~:~c Facilities and Improvements (HUD Tab[,e 3-1) Name of Grantee:State: CA Program ~Tear: 20(},6/07 Prior~.~ Need Category Ac~ua~ Number of Actua~ Number of ProjecCs Ass~sCed Projects Completed Public Facilities Senior Centers Handicapped Centers Homeless Cemers 1 Youth Centers Neighborhood Facilities Child Care Centers Parks and!or Recreation Facilities Health Facilities Parking Facilities Abused,qN-eglect Facilities AIDS Facilities Other PuNic Facilities Public Improvements Solid Waste Improvements 25 Priority Need Cacego~ry Actua~ Number (~f Accual Number (~f l?r(~jec~s Assisted Projects Completed Flood Drain Improvements Water Improvements Street Improvements Sidewalk improvements Sewer Improvements O~er Other Pr~or~ Need Category Ac~aa~ Nurr~ber of Persens Served Public Services Senior Ser~,ices 674 Handicapped Services Youth Services Transportation Services Substance Abuse Services 41 Employment Training Crime Awareness Fair Housing Counseling 27 Tenant/Landlord Counseling Child Care Services Health Services Other Public Services (homeless assistance)4,995 Accessibi~i~- Needs 13 Ot~er Community Deve~opme~ ?r~ri~ Need Ca~eg(~ry Actual Number of Persons Served Energy Efficiency Improvements Lead Based Paint/Hazards Code Enforcement Other Note: Numbers reflect persons assisted with CDBG funds only 3. Summary of Accompiishme~s with PaSo A~to Geaera~ F~nd M[oney The City of Palo Alto Human Service Resource Allocation Process (HSRAP) provided $1,250,402 in General Fund dollars to the following agencies for services to lower income elderly, disabled or special needs residents of Palo Alto during the 2006/07 fiscal year. Adolescent Counselina Services - $90,000. On-campus counseling pro~ams Alliance for Community Care - $24,000. Homeless outreach program Avenidas - $420,216. Senior services CommuniW Health Awareness - $9,000. Outlet program Community Technoloav Alliance - $12,300. Housing website/voicemail CommuniW Association for Rehabilitation (CAR) - $40,353. Services for children with disabilities and their families La Comida de California - $33,000. Senior nutrition program MavView Community HealtE Center - $17,000. Health care for low income, homeless, and uninsured residents Palo Alto Community Child Care - $425,720. Child care subsidies and outreach Proiect Sentinel - $65,641. Tenant!landlord counseling and mediation services Second Harvest Food Bank - $7,372. Groceries for low-income seniors Senior Adult Legal Assistance - $8,800. Legal assistance for seniors Support Network for Battered Women - $18,000. Services for battered women Urban Ministries ofPalo AltoiIimVision - $67,000. Food program and emergency shelter Bay Area CommuniW Resources/~YCS) - $12,000. Community Service Program and Summer Service Program 4. Summary of Accomplishments with }][amit~on Public ]Benefit Funds Quarterly interest payments supported the Avenidas Volunteer Corp, Avenidas Handyman Services, and Information and Referral Services. The Avenidas Volunteer Corp has se’,~eral programs, including the Early Literacy Program, the Partners in Caring Progam, and Computer Learning Center. In fiscal year 2006/07, 417 volunteers provided a total of 19,835 hours of service to the community through this pro~am The Information and Referral Program provides 2? brief consultations about older adult services including affordable housing, adult day health centers and financial management. The Information and Referral program responded to 1,487 requests for information if fiscal year 2006/07. The Avenidas Handyman Services provides minor home repair services including yard work and minor plumbing, painting, computer repair and electrical jobs. In fiscal year 2006Y07, 633 jobs were performed through this program. The City continues to support the purpose and goal of fair housing and contracted with Project Sentinel to promote equal opportunity in housing in fiscal year 2006/07. The contract with Project Sentinel is a collaborative effort with the cities of Gilroy, Moun~;ain View and Sunnyvale. Services included information and referra!, community outreach and education, discrimination complaint checking and investigation, legal referrals and assistance in resolving complaints. The City also contracted with Project Sentinel to provide tenant/landlord information, referral and mediation ser~,ices through the HStKAP program. Senior Adult Legal Assistance (SALA) also recei’ves City of Palo Alto General Funds to provide legal assistance to seniors. This service could include housing related assistance to elderly residents. In addition to the services provided under these contracts, the following steps were taken in the 2006/07 fiscal year to affirmatively further fair housing. City staffparticipated with other Santa Clara County CDBG entitlement jurisdictions and service providers in the County~Tide Fair Housing Task Force. The task force includes representatives from entitlement jurisdictions, fair housing providers, legal service providers, and other community service providers. The Office of Human Services conzinued sponsoring housing information and referral coordination meetings for service providers. The meetings have resulted in increased networking amongst provider agencies and the availability of shared housing wait lists and other information to help !ow income; elderly, homeless, or disabled clients access affordable housing. The City’s Office of Human Services provided affordable housing information and referral services, and distributed the ’:Directory of Housing Services-and Subsidized Rental Housing in Palo Alto and Surrounding Communities". The City targeted the majority of its CDBG and local housing funds to increasing/ preserving the supply of housing affordable to persons with lower incomes and/or special needs. The City contracted with Project Sentinel to conduct discrimination audits based on familial status and disability. Four familial status and three disability audits were conducted. In the familial status audits, two of the landlords were educated, one was 28 counseled and one is pending further investigation. In the disability audits, all three of the landlords were counseled. The City continues to support police of IScials and community groups in the development of policies and actions to deal with hate crimes. Under its fiscal year 2006/07 contract with the City, Project Sentinel conducted, and collaborated on a number of education community forums and outreach activities relating to discrimination issues, including: Provided community presentations at EHC Life Builders, Senior Housing Solutions, Silicon Valley Independent Living Center, Santa Clara Count)., Adult Probation Department - Domestic Violence Unit, Habitat for Humanity, the Health Trust, Catholic Charities Housing Department, Sacred Heart Community Center, Opportunity Center, G & K Management, and the Tri County- Apartment Association. Staffed a table at the Blue Cross of California Open House, the Palo A]to.Festival of the Arts and the Silicon Valley Affordable Housing Fair. Distributed 954 brochures from information booths, community presentations, city hall, rea! estate offices, local businesses and libraries. English and Spanish language public service announcements were sent to various radio and television stations on a quarterly basis, including KABL, !CCLX, I<L&ZA, KBA~7!KKSJ, KCBS, KKSF, KEST, KFJC, KFOG, KFOX, KFRC, KGO, KITS, KLIV, KOFY, KOIT, KCQC, K_PFA, KPOO, KSCU, KSJO!KSJX, KUSF, KZSU, KBRG, KLOK, KIQI, KKHI, KBLX, KEZR AND KQED. Conducted 4 tester trainers in Pato and 18 trainings agency-wide to increase the tester pool to 506 testers. Project Sentinel staff hosted three separate question and answer programs on the radio station KFOG. Wrote a column titled Rent Watch for publications around the Bay Area and California, which appears on a regular weekly and monthly basis. Participating publications include the Palo Alto Weekly, Apartment Management Magazine and the Disabled Dealer. Published quarterly advertisements in the Palo Alto Weekly and E10bservador newspapers Attended quarterly Northern California Fair Housing Coalition meetings. Conducted 13 fair housing trainings for property owners/management professionals with properties throughout Santa Clara County. Attended the Santa Clara County. Fair Housing Task Force meetings Organized a Fair Housing Month Symposium entitled, "In Our Neighborhood: Fair. Housing for Ever..one". The workshop covered topics such as seniors at risk, special concern for unique housing, fair housing 101, habitabilib7 and maintenance, new protections and disability discrimination. Over 185 people were in attendance. including property managers, city and county employees, service providers, advocates, and the general public. During fiscal year 2006/07, Project Sentinel investigated 20 cases of reported discrimination in Palo Alto. Of the 20 cases investigated, 10 cases (50%) had a positive outcome (successful conciliation, referred to HUD, or counseled/assisted), seven cases (35%) are still pending and one of the complainants (15%) declined to pursue any further action. The 20 cases were in the following categories: Disability 16 Cases 80% Gender 1 Case 5% Race 1 Case 5% Familial Status/child 1 Case 5% National Origin 1 Case 5% 20 Cases 100% {;o Actions takea to address the needs ~f homeless persons Shelter Plus Care (SPC) The Shelter Plus Care Pro~am. administered by the Office of the County’s Homeless Coordinator, provides up to five years of project based Section 8 rental assistance for previously homeless individuals with disabilities. To qualify- for the SPC program, applicants must be living on the streets, or staying at emergency shelters. Additionally, they must have a diagnosis of one or more of the following diseases: (1) Mental illness; (2) Alcohol or drug addiction; and (3) HIViAIDS. They must be clean and sober (if their diag-nosis is drug or alcohol addiction), and be willing to commit to and follow an individual service plan created with their case manager specifically geared to their individual disability. Extensive support services are a necessary and required component of the program. These supportive services are provided to program participants to allow them to maintain their housing, address and resolve ongoing issues with their particular disability, and achieve a greater level of self-determination. Alma Place, the 107-unit single room occupancy apartment building on Alma Street, has ten designated SPC units during the reporting period, but only four of the units are occupied. The Barker Hotel, a 26-unit single-room occupancy building in the downtown, has seven designated SPC units, but only two are currently occupied. All six participants were very low income. Overall, the SPC program has been successful at housing people with special needs who might not otherwise be eligible for housing or be able to maintain their housing. There were two families that participated in the SPC program and were housed at one of the Palo Alto Housing Corporation’s multifamily sites. b. Community Workin~ Group The Community Working Group (CWG) is the sponsor of a comprehensive homeless service center, The Opportunity Center that provides refuge and a range of professionally run services for those who are homeless or otherwise in need of a safety net of social services. The Opportunity Center held its grand opening on September 17, 2006 and the initial rent-up of the facili~, was completed on December 27, 2006. The Opportunity Center provides personal services - mail delivew, access to a telephone, showers and personal hygiene supplies, laundry facilities, help finding food and shelter, and a supportive enviromnent. Case managers are available to assist people in obtaining appropriate job skills, housing, and medical and mental health assistance. The service center is located on the ground floor of a 4-story building that will also has 88 units of affordable transitional and permanent housing for singles, couples and families with children. The building design allows for different populations to coexist in the same area. The project is discussed more fully in the housing portion of this report. Employment Opportunities The homeless worker program continued during fiscal year 2006/07. Selected workers were provided with food vouchers, a voucher for clothing from the local Goodwill, and bus passes. Workers were helped with resumes and skills training. Fi-~’e persons participated in the program, and one of them continued their employment with the Opportunity Center. d. Homeless Services h total, the City pro~v-ided $281,374 in direct funding for the following services targeted to benefit persons who are very low-income or homeless: Urban Ministry - $88,250 in City General Funds and CDBG funds for a prepared meal program, a grocery- distribution program for low- income persons, drop-in center and emergency shelter. Emergency Housin~ Consortium - $7,760 in CDBG funds for emergency shelter and supportive services provided by the Surmyvale Armory, the Gilroy Armory, and the Reception Center. Palo Alto Housin~ Corporation - Downto’,~n SRO Hotel Counselin~ - $20,270 in CDBG funds for casewor "k/counseling sessions for the low-income tenants of the Single Room Occupancy Barker Hotel and Alma Place. Many of the tenants were previously homeless, and the counseling sessions help them maintain their housing stabilit37. Shelter Network - Transitional Housing for Families and Individuals - $16,375 in CDBG funds for transitional housing and supportive services (including childcare) for homeless families with children and single individuals. Clara-Mateo Alliance -Family/Singles Shelter and Transitional Housing- $37,047 in CDBG and General funds for emergency shelter and transitional housing for homeless individuals and families with children ,/May View Community Clinic - $17,000 in City’ General Funds were provided to the Clinic to pro~:ide health care for low-income, homeless, and uninsured residents. Alliance for Community Care - $24,000 in City General Funds for a homeless outreach program targeted to those with mental health issues. Support Services for Battered Women - $18,000 in City General Funds were used to provide shelter and supportive services for abused women and children. Community Technology Alliance - $12,300 in City General Funds were used to provide voice mail boxes for the homeless as well as to support a Countywide subsidized housing website. La Comida de California - $33,000 in City General Funds were used to provide meals for low-income seniors at various facilities Second Hata, est Food Bank $7,~7_ in City General Funds were used to provide groceries to low-income individuals As was mentioned in the previous section, the City of Palo Alto provided wither CDBG or HSRAP funding to several services for persons in the Palo Alto community who are vev low- income, homeless, or at-risk of becoming homeless. The goal of all of the services listed above is to prevent homelessness, help people move out ofhomelessness and to reduce to number of persons below the poverty line. a. Lead-Based Paint Hazard Reduction Lead poisoning can cause permanent damage to the brain and many other organs, and can result in reduced intelligence and behavioral problems in young children. More than 800,000 children younger than 6 years old living in the United States have lead in their blood that is above the level of concern set by the Centers for Disease Control and Prevention (CDC). A significant number of these children are in families of low income and are living in old homes with concentrations of lead-based paint. The most common sources of childhood exposure to lead are deteriorated lead-based paint and lead-contaminated dust and soil in the environment. The City housing and CDBG staff provide information and referral to property owners, developers and non-profits rehabilitating older housing about lead-based paint hazards. There is no information that indicates lower income households are more likely to be exposed to lead paint hazards in Palo Alto than are families in the general population. The City’s 2005-2010 Consolidated Plan has a more detailed discussion of lead based paint in the City. The City currently requires that any housing to be rehabilitated with City financial assistance to be inspected for the existence of lead paint and lead paint hazards. The City will provide financial assistance for the abatement of such hazards in units rehabilitated with Cits~ funding. b. Intergovernmental Cooperation The City of Palo Alto has worked closely with the cities of Gilroy, Mountain View and Surmyvale to distribute a joint Request for Proposals (R_FP) for fair housing services. A single fair housing provider was selected for all three cities in 2006-07 for a 2-year contract, resulting in more cost-effective services. City staffhas also participated in County sponsored Task Forces and other efforts to increase affordable housing on a regional basis. City staff participates in the following: The Housing Trust Fund of Santa Clara County Santa Clara County., Collaborative on Housing and Homeless Issues The CDBG and HOME Program coordinators of entitlement jurisdictions from throughout Santa Clara County that address multi-jurisdictional funding, regional approaches to fair housing and predatory lending and other issues of common interest. Countywide Fair Housing Task Force c. Actions to Ensure CDBG Proaram Compliance The Ciu~ follows the monitoring requirements for the use of federa.1 funds as directed by HUD. City staff attended HUD sponsored workshops on outcome performance measurements, environmental review and IDIS. The City’s Department of Planning and Community Environment monitors its housing production goals and all the activities carried out to further the goals of the Consolidated Plan. Subrecipients of CDBG funds are required to submit semi-annual and annua! performance reports outlining the extent to which program goals have been achieved, and the beneficiaries who have been served. Program performance is measured against the specific program objectives outlined in the contract scope of services. City staff monitors each subrecipient, as necessary; to insure compliance with regulations governing their administrative, financial and programmatic operations, and to make sure the subrecipients achieve their performance objectives within the prescribed schedule and budget. Changes ~o Annual Action Plan No changes were made to Palo Alto’s 2006/2007 Annual Action Plan, howe~,er, the 2005-2010 Consolidated Plan was amended to incorporate the performance measurement requirements. The minor amendment was adopted by the City Council on May 7, 2007. Co Assessment of Performance 1. Evaluation of Progress in Meetiag Annual Community" tl)evelopme~lt Goals The City has made progress in meeting its community development goals in the past year, especially in the area of services for lower income residents. The local safety net of services for lower income persons is being strengthened with the creation of more shelter and supportive services. These efforts contribute significantly to a local continuum of care. All of the public service agencies funded with CDBG funds address the identified needs of providing a variety of human services to low-income, at risk populations. City staff has provided information and referral assistance to residents searching for .affordable rental housing. Shelter beds and services for the homeless population have been increased as well as serxdces to very.- low-income seniors and persons with disabilities. The City’s seasonal worker program continues to provide training and employment to the unemployed. The City pursued all resources it indicated it would, provided requested certifications of consistency for HUD programs in a fair and impartial manner, and did not hinder Consolidated Plan implementation by action or willful inaction. The following goals are those that were identified in the 2005-2010 Consolidated Plan. The fiscal year 2006!07accomplishments for each goal are also listed. Goa~ #8: Provide Assistance and Supportive Services to Low and Very Alto Residents to Keep **t~em from ~ecomi~g Homeless 2006/07 Activities: Palo Alto Community Childcare - Childcare Subsidies 3990 Ventura Court Palo Alto, CA 2006 Accomplishment: 50 households Pr~ect Sentinel - Mediation Program 430 Sherman Avenue, Suite 308 Palo Alto, CA 94306 2006 Accomplistmaent: !50 households Second Harvest Food Bank 750 Curtner Avenue San Jose, CA 95125 2006 Accomplishment: 175 individuals Avenidas - Senior Home Repair and Senior Housing Counseling 450 Bryant Street Polo Alto, CA 94301 2006 Accomplishment: 1,600 individuals La Comida - Senior Nutrition Program 450 Bryant Street Palo Alto, CA 94301 2006 Accomplishment: 150 individuals Palo Alto Housing Corporation - Barker Hotel and Alma Place Counseling Program 725 Alma Street Palo Alto, CA 94301 2006 Accomplishment: 153 households May View Community Clinic - Health Care Services 270 Grant Avenue Palo Alto, CA 94306 2006 Accomplishment: 100 individuals Services with a Housing Component 2006/07 Activity: The City provided funding to InnVision for the Urban Ministry of Palo Alto program that operates a drop-in center at the Opportunity Center. InnVision - Urban Ministi37 of Palo Alto 974 Willow Street San Jose, CA 95125 2006 Accomplishment: 3,359 individuals Goal #!~): Continue to Support the Operating (and/or rehabiK, tatk~n) Costs of Sherbets and Transiti.ona~ Housing Programs that Serve the PMo Alto Area 2006/07 Activities: Clara-Mateo Alliance - Adult Program and Family Program 795 Wi!low Rd., Bldg 323-D Menlo Park, CA 94025 2006 Accomplishment: $37,047 in Operating Costs Haven House 260 Van Buren Menlo Park, CA 94025 2006 Accomplishment: $7,500 in Operating Costs Maple Street Shelter 1580-A Maple Street Redwood City, CA 94063 2006 Accomplishment: $8,875 in Operating Costs Emergency Housing Consortium 2665 North First Street, Suite 210 San Jose, CA 95134 2006 Accomplishment: $7,760 in Operating Costs Goa! #1!: Continue to Support N1e~ta! HeMth Outreach mad Other Supporti~,e Services for the Homeless 36 2006/07 Activity: The City continued to support mental health outreach and supportive services. Goal #t2: Continue to Cooperate on Coun;~vide Approaches to the ]issues of Home~.ess~.ess 2006/07 Activi~7: The City continued to cooperate on counts~vvide approaches to the issues of homeless. GoM #!3: Support the Activities of Area Non-Profit Organizafio~ts the Provide Tra~sifiona~ Hot~si~tg and Supportive Servi, ces to the ~q~ometess 2006/07 Activities: Clara-Mateo Alliance - Adult Transitional Housing 795 Willow Rd., Bldg 323-D Menlo Park, CA 94025 2006 Accomplishment: maintained 6 transitional housing units v.lara-_ !iateo Alliance - Family Transitional Housing 795 Willow Rd., Bldg 323-D Menlo Park, CA 94025 2006 Accomplishment: maintained 3 transitional housing units Shelter Network - biid Peninsula Housing Program 1450 Chapin Avenue, 2nd Floor Burlingame, CA 94010 Various locations in the Mid-Peninsula 2006 Accomplishment: maintained 54 transitional housing units Goa~_ #!4: Co=ti~ue to Support tke Shetter P~us Care Program in Pato A~to and increase the U~its Avai~aMe in t~e Program to ]~nciude Families with CMldre~ 2006/07 Activity: There were se-ven Shelter Plus Care units available at the Barker Hotel and 10 units were available at Alma Place. Goal #15: Assist Seniors ~n Long-Term Care Facilities 2006/07 Activity: Catholic Charities - Long-Term Care Ombudsman Program 2625 Zanker Road, Suite 200 San Jose, CA 95134-2107 2006 Accomplishment: 674 Individuals GoM #15: Provide Support to Accessibie Transportation Services 2006/07 Activity’: Continued to support accessible transportation services in the City, including the Palo Alto Shuttle. Goa~ #t7: Continue to Provide Servfices to lPrevent Home~essness (A~so see Goa~ #8) 2006/07 Activities: Clara-Mateo Altiance - Adult/Couples Program 795 Willow Rd., Bldg 323-D Menlo Park, CA 94025 2006 Accomplishment: 524 individuals Clara-Mateo Alliance - Family Housing Program 795 Willow- Rd., Bldg 323-D Menlo Park, CA 94025 2006 Accomplishment: 249 Households Shelter Network - Mid Peninsula Housing Program 1450 Chapin Avenue, 2"d Floor Burlingame, CA 94010 Various locations in the Mid-Peninsula 2006 Accomplishment: 627 Households IrmVision/Urban Ministry Palo Alto - Drop-In Center 400 Mitchell Lane Palo Alto, CA 94301 2006 Accomplisl~ment: 3,359 Individuals Emergeiacy Housing Consortium - Palo Alto Homes Program 2665 North First Street, Ste. 210 San Jose, CA 95134 2006 Accomplishment: 43 Individuals 2006/07 Activity: Second Harvest Food Bmfl( 750 Curtner Avenue San Jose, CA 95125 2006 Accomplishment: 175 individuals La Comida - Senior Nutrition Program 450 Bryant Street Palo Alto, CA 94301 2006 Accomplishment: 150 individuals ~.o House flhose Services 2006/07 Activity: Emergency Housing Consortimm - Our House Youth Project 480 E. William Street San Jose, CA 95113 2006 Accomplishment: 1 Facility is underway 2° Barriers to Fulfilling Strategies The continually increasing cost of land in the Bay Area has not only created a housing crisis, but a rental crisis for non-profit agencies that serve the vulnerable, at-risk populations. Many non- profits have experienced a decrease in funding and donations because of the economic downturn. Funding cuts have resulted in a decrease in staffing and services at many of the local non-profit agencies. Although there have been fluctuations in the economy, housing prices have continued to rise in the Bay Area. The housing that is available is out of reach to many low-income residents, primarily because many of the available jobs have low wages. According to the 2006 Our of Reac]~ report prepared by the National Low-Income Housing Coalition, a renter in Santa Clara County must earn at least $26.18 per hour in order to afford the fair market rent for a two- bedroom apartment. Many resident renters have been forced into homelessness or forced ~o leave the area as the result of dramatic increases in rental rates and unemployment over the past few years. People alread?~ in shelters or sub-standard housing find it increasingly difficult to improve their living situations, and tend to stay in the shelters or sub-standard housing longer. 3. Adjustments or ~mproveme~ts to Communi,~’ Deve~opme~ Strategies No adjustments to the community development s~ategies have been identified at this time. 4. Performance >!easnrement System Status The City- has updated the required performance measuremem system for the CDBG progam. The City- has updated their subrecipient reporting format in order to capture all of the necessary information for the new system and has included performance measures in their subrecipient contracts beginning in fiscal year 2006/07. 4O AFFIDAVIT OF PUBLICATION !N THE PALO ALTO 703 High St.~ Paid Alto, California 94301 (650) 326-82i0 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUN-rY OF SANTA C~,-RA STA]-E OF ’NTY OF SANTA SS i, the undersigned, state that i am, and at el! times herein mentioned ’was, a cnizen of the Unhed States of America, over the age of eighteen years, and not a pa~y to or interested in ~he above entitled tootler, that I was at and during all said ~,imes and mill am the principal clerk of the publisher of ~he Paid Alto Weekly~ a newspaper of general circulation published weekly in the cib, of Paid A!to in said County of Santa Clara, State of California; that said is and was at all times herein mentioned a newspaper of general circulation as that term is defined by Section 6008 oi the Government Code of lhe State of California; that said was adjudged as such by Superior Cou~ of ~he Coumy of Santa Clara, S~ate of California, under date of November 2, 1982, Case Number P41989; that the notice of which the annexed is a true pnnted copy= was set in type not smaller than nonpareil and was preceded with words printed in black-race ~ype not smaller man nonpareil, describing and expressing in general terms, the purpor~ and character of the no~ice intended lo be given; that said notice was published and printed in said newspaper on the [oIiowing dates, to wit: Date of first publicaJon in the Pato Alto Weekly Nolice is hereby given thai the Ciiy oi Pato Alto has completed a draft pedormance report 1or 1he Community Deveiopmen~ Block Grani (CDBG) Program :for fiscai yeaC- 2006/07 ]:he."Drall~Cbnsolidat~d~: " Annual Performance and Evaluation Reporl (CAPER) is available for . public review and comment prior to its.submittal to the U.S Depaqmeni of Housing and Urban Development The CAPER provides a summar~y of the programmatic accomplishments in affordable housing and .community development c~orin9 the 2006- 2007 fiscal ygar. tt describes the status oi actions takea duri.o.g the ’!ea[ 1° implement thfi~ s~91egi~s ;a~!66j~t ’~es ,d:escdbed Consolidated:Plan fb~ il~e oerio8 July 1. 2005’i0.~Jun~30, 20i ~ an~ .the progress ]made-in addE~k~ip~g 0on} fie~:briority ~eeds and ob)~,t ve~. Public I~eview and Corn.rn~nt Perioch The draft CAPER wil! be a~,ailal~i@fdr~p~bti~,~dview and.~ommeHi fora-175-aay period beginning on Wednesday, September 5. 2007 and concluding at 5:00 p-m. on Thursday. September g0 2007. Wril~en commems may be submitted during .the review period and should be sent to 1he Cib, of Paid Alto~ DepaGmeotof Planning and Co~[’nunity-Environment, Atlenlion: Eloiza Murillo-Garcia, 250 Hamilton Avenue, 5th Floor, Paid Alto, CA 94301 ; 6501329-2428; e-mail eioiza.muritlogarcia@cityofpaloalto.org 7e Obtai~ s Copy ~ the OAPER: Copies are available at 1he Department of Planning and Communit7 Environment, City Hail, 5th Floor, 250 Hamilton Avenue, during regular business hours or by calling 650/329-2603. Persons with disabilities who reaGre auxilia~, aids or services in using City facilities, serv)ces or program~, or who would like information on the Ciiy’s " compliance with the Americans with Disabilities Act .ADA) of 1990¯ may contact ADA Coordinator, City of Paid Alto, 650-329-2550 ada@ci~,ofpatoalto.or9 declare under,oenalty of p,~jurT~, that the foregoing is true and correct. at Paid Alto, California. NOTICE OF PUBLIC P~VIEW AND COMMENT PERIOD FOR PALO ALTO’S CONSOLIDATED AR_.rNUAL PERFORMANCE AND EVALUATION REPORT FOR THE PERIOD JULY 1, 2006 TO JUNE 30, 2007 Notice is hereby given that the City of Palo Alto has completed a draft performance report for the Community Development Block Grant (CDBG) Program for fiscal year 2006/07. The Draft Consolidated Annual Performance and Evaluation Report (CAPER) is available for public review and comment prior to its submittal to the U.S. Department of Housing and Urban Development. The CA_PER provides a summary of the programmatic accomplishments in affordable housing and community development during the 2006-2007 fiscal year. it describes the status of actions taken during the year to implement the strategies and objectives described in the City’s Consolidated Plan for the period July 1, 2005 to June 30, 2010, and the progress made in addressing identified priority needs and objectives. Public Review and Comment Period: The draft CAPER will be available for public review and comment for a 15-day period, beginning on Wednesday, September 5, 2007 and concluding at 5:00 p.m. on Thursday, September 20, 2007. Written comments may be submitted during the review period and should be sent to the City of Palo Alto, Department of Plannin~ and Community,, Environment, Attention: Eloiza Murillo-Garcia, 250 Hami!ton Avenue, 5t~ Floor, Palo AltO. CA 94~01 6~0/_~;9-24~8; e-mail eloiza.murillo garcia@cityo fpaloalto, org. To Obtain a Copy of the Ch,&PER: Copies are a-v-ailable at the Department of Planning and Community En-,,ironment, City Hall, 5th Floor, 250 Hamilton Avenue, during regular business hours or by calling 650/_329-2603. Persons with disabilities who require auxiliary aids or services in using Ciw facilities, services or programs, or who would like information on the City’s compliance with the Americans with Disabilities Act (ADA) of 1990, may contact: ADA Coordinator, Cib, of Palo Alto, 650-329-2550 [Woice) ada@cityofpaloalto.org SUMlv~2ARY OF CDBG FLFNDI-NG P~ORiTIES FISCAL YEAR _00o/2007 AFFORDABLE HOUSING (Goa!: 73.4% of Budget) ACTIVITIES IN SL,~PORT OF NEW CONSTRUCTION. CONVERSION & ADDITION O!~ NEW L~ITS 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 ofhomelessness. B.PRESERVATION OF EXISTING. LO . ,ER LNCOME 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. _ (t_~x,,O ~!~._ , (Goal: 0%PUBLIC FACFLiTiES A~N.wD lb~’~ VF ~NTS ~ of Budget) 1.Rehabilitation of existing facilities for use as shelters for tl~e homeless or other special needs groups ii!. V PLrBLiC SERVICES (Goal: 11.4% of Budget) Services directly related to the housing needs of low-income persons. Homeless shelter operating costs and the provision of auxiliary or related services. Services which address other needs of low income, elderly or special needs persons. AD~INISTRATiON (Goal: 15.2% of Budget) Fair housing education, infomaation, referral, advocacy, and counseling and complaint resolution. CDBG program administration and planning costs. Planning studies Dep~men~ of Houeing & U~b~n Deve~opmen~ Office of Co~nm~nity P~nnin~ COVER PAGE Grantee Performance Report Community Development Block Grant Program OMB Approval No. 2502-0006 (exp. 3/31/93) NAME & ADDRESS OF GRANTEE City of Palo Alto 250 Hamilton Avenue Palo Alto, CA 94301 Program Year End 2. Grant Number 6/30/07 B06MC060020 NAME & ADDRESS OF C.D. DIRECTOR Stephen A. Emslie Dept. of Planning & Community Environment 250 Hamilton Avenue Palo Alto, CA 94301 NAME & TELEPHONE NUMBER OF PERSON MOST FAMILIAR WITH INFORMATION IN THIS REPORT Ms. Eloiza Murillo-Garcia (650) 329-2428 NAME & TELEPHONE NUMBER OF PERSON TO CONTACT ABOUT DISCLOSURES REQUIRED BY THE HUD REFORM ACT OF 1989 Ms. Eloiza Murillo-Garcia (650) 329-2428 Have these Community Development Block Grant (CDBG) funds been used: a. to meet the community development program objectives in the final statement for this program year? If no, explain, in narrative attachment, how: (1) the uses did not relate to program objectives; and (2) future activities or program objectives might change as a result of this year’s experiences. Yes exclusively to either benefit low-and-moderate (Iow/mod) income persons, aid in the prevention or elimination of slums or blight, or meet community development needs having a particular urgency? If no,-explain in a narrative attachment. Yes such that the grantee has complied with, or will comply with, its certification to expend not less than 70% of its CDBG funds, during the specified period, on activities which benefit Iow/mod income persons? If no, explain in a narrative attachment. Yes Were citizen comments about this report and/or the CDBG program received? If yes, attach a summary. Yes This form may be reproduced on office Copiers. Previous editions are obsolete. Retain this record for 3 years. Form HUD-4949.1 (11/20/92) Ref Handbook 6510.2 S :\PLANLPLADIVL~.dvance PJanning\cdbgkFy 2006-07\gpcoverpage_2007.doc Page 1 of 2 Department of Housin!# & Urban Development Office oi: Commtmity P~annin~ COVER PAGE Grantee Performance Report Community Development Block Grant Program OMB Approval No. 2502-0006 (exp. 3/31/93) Indicate how the Grantee Performance Report was made available to the public: a. BY PRINTED NOTICE: Advertisement in Palo Alto Weekly September 5, 2007. b. BY PUBLIC HEARING: A Public Hearing was held on April 17, 2007 to discuss allocation recommendations. A Public Hearing was held on May 7, 2007 to determine final funding allocations. c.OTHER: A notice regarding the public review period for the draft CAPER was mailed to a list of interested individuals and posted on the City’s website. 10.The following forms must be completed and attached: a. Activity Summary, form HUD 4949.2 b. Financial Summary, form HUD 4949.3 c. 1-4-1 Replacement, form HUD 4949.4 d. Rehabilitation, form HUD 4949.5 e. Displacement, form HUD 4949.6 I hereby certify that: This report contains all required items identified above; Federal assistance made available under the Community Development Block Grant Program (CDBG) has not been utilized to reduce substantially the amount of local financial support for community development activities below the level of such support prior to the start of the most recently completed CDBG program year; all the information stated herein, as well as any information provided in the accompaniment herewith,~is true and accurate. Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties (18 U.S.C. 1001, 1010, 1012, U.S.C. 3729, 3802) Typed Name & Title of Authorized Official Representative FRANK BENEST City Manager Signature This form may be reproduced on office Copiers. Previous editions are obsolete. Retain this record for 3 years. Date Form HUD-4949.1 (11/20/92) Ref Handbook 6510.2 Page 2 of 2 S:\PLAN\PLADIV\Advance Planning\cdbg\FY 2006-07\gpcoverpage_2007.doc FORM PY 2006-2007 ~ev±seG 9/26/07 Financia! Summary Grantee Performance Report Come, unity Development Block Program U.S. Department of Housing and Urban Development Office of ComLmunity Planning & Deve!opment CMB Approval No. 2506-0006 (Exp. 3/31/93) Name o{ Grantee City of Palo Alto Part i: Summary of CDBG Resources 2 Gran~ B06MCO60020 3. Reporting Period From 07/01/06 To 06/30/07 I.Unexpended CDBG funds at end of previous period P.Entitlement Grant from form HUD-7082 ~Surm!us Urban Renewal Funds 4.Section 108 Guaranteed Loan Funds (Principa! !~mount) 7~,680 Program income received by:Grantee Column A) a. ~zvo_, v±n~ Fd~ds b. Other (identify below) Loan R~w=,~.~=nu~/~=~a! income!Interes~ mr.~aT: ~ ~ ~ _nro.zram~ _~o~,~<~ -= (sum o~_ columns a and b) Prior Period Adjustmenqs (if negative, enclose in brackets) Total CDBG Funds available {m~ use d~r~nc th~ remorr meriod Subrecipient (Column B) 107,882 8.Total expenditures reported on Activity Sums~ary 9.Total expended for Planning & A6ministration (c~bg/p~o]ec[sen[inel) !0./~moun£ subject to Low/Hod Benefit Calculation !I.CDBG funds used for Section 108 principa! & interest payments 12.Total expenditures (line 8 plus line I!) !3.Unexpended balance (line 7 minus line 12) !5!,336 415,496 566,833 0.00 566,833 671,916 Part ±±i:bow/Mod credit This Reoorting Period 14.Tota! Low,/Mod credit for multi-unit housing expenditures i5.Total from a!l other activities qualifying as low/’mod 16.Total (line 14 plus line 15) 17.Percen~ benefit ro iow!mod persons (!ine i6 divided by line !0 this reporting period Part iV: Low/Hod Benefit for Multi-Year Certifications (Complete on!y if certification period includes prior years) Program years (PY) covered in certification PY 2004,2005,2006 18. Cumulative net expenditures subject to program benefit calculation 19.Cumulative expenditures benefiting iow/mod persons 20.Percent benefit to !owimod persons (!ine 19 divided by line 18) 253,000 162,496 415,49~ 100% This form may be reproduced on local office copiers Previous editions are obsolete Retain this record for 3 years form HUD-4949.3(ii!24!92) ref Handbook 6510.2 09/26/07 1 Financial ~r=..~--me=e Performance Report Com_munity Development Block Program U.S. Department of Housing and Urban Development Office of Community Planning & Development 0HB Approval No. 2o~,6-0006(Exp. 3,/31/93) Part V: For Public Service (PS) ActivA%ies On!y: Public S~_v±c~ ~AP Calculation 22. 23. 24. 25. 26. 27. 28. 29. Total PS expenditures from column h, form HUD 4949.2a Total PS un!iquidated obligations from column r, from HUD 4949.2a Sum of line 21 and line 22 Tota! PS uniiquidated obligations reported at the end of the previous reporting period. Net obligations for public services (line 23 minus line 2%) P_mount of Program income received in the preceding program year Entitlement Grant 9~ount (from !ine 2) Sum of lines 26 and 27 Percent funds obligated for Public Service Activities (line 25 divided by line 28) ~3,502 -0- ~3,502 77,~7 7~,680 789,297 Part Vi: Planning and~DwoGr=m~__. Administration Cap Calculation 30. 31. 32. .~mount subject to planning and a~minstrative cap 830,045 (grant amount from line 2 plus line 5) 9~mount expended for Planning & Administration (from line 9 above) Percent funds expended (line 31 divided by line 30)~8o~3°/o ~E 5a: PROGP~’~_H INCOME NARP.Z:T!VE Low interest Loan Repayments (Housing improvement Program) Paio Alto Housing Corp. Rental property income 10,483 ~07 882 I ~ ~ 8,3~ All interest earned on the Housing improvement Program Loan Payments was returned to :he U.S Treasury. Other P<oo~=m income Activity No.Description Grantee Subrecipient 0.00 0.00 Tot~0.00 0.00 09/26/07 2 This form may be reproduced on local office copiers Previous edi%ions are obsolete Retain this record for 3 years. Financial Sumumary Grantee Performance Report Com~munity Development Block Program form HUD-49~9 ~(i!/24/9P ref Handbook 6510.2 U.S. Department of Housing and Urban Development Office of Community Planning & Development OMB Approval No. 2506-0006(Exp. 3/31 93) GPR HANDBOOK APPENDIX 3: ITEM E CALCULATION OF BALANCE OF U:~PROGRA.k,fMED FU%,TDS D RBCONC~LIATIONOFLINE(S) OF CREDIT (LOC) AND CASH BALANCES TO b.~. ~EXPENDED BALANCE OF CDBG FUNDS SHO\VN ON GPR Complete the following worksheet and submit with the attachment: UNEXPENDED BALANCE SHOWN ON GPR (line 13 of HTJD 4949.3) ADD: LOC balance(s) as of GPR Date Cash on Hand: Grantee Program Account Subrecipients Program Accounts 67!,916 Revolving Fund Cash Balances Section 108 Accounts (in contract) -0- SUIBTBACT: Grantee CDBG Program Liabilities [include any reimbursements due to the Grantee from program funds) -0- Subrecipient CDBG Program Liabilities (same instructions as above) -0- TOTAL RECONCILING BALANCE: UNRECONCILED DIFFERENCE:0 When grantees or subrecipients operate their programs on a reimbursement basis, any amounts due to the grantees or subrecipients should be included in the Program Liabilities. 67! 671,916 This form may be reproduced form HUD-4949.3 (11/24/92) on localo_~_c~{Gi = comiers_ref Handbook 6510.2 Previous editions are obsolete Retain this record for 3 years. U.S. Department of Housing & Urban Development Office of Co--unity Planning and Development 09/26/07 3 REHABILITAT!ON ACTIVITIES Grantee Performance Report CoMmunity Development Block Grant Program 0HB Approval No. 2506-0006(exp. 3/31/93) Name of Grantee City of Palo Alto Grant Number B06MCO60020 Program Year From 07/01/06 To 06/30/07 All grantees must submit this form, whether or not they have CDBG funded rehabilitation programs. Single-unit Activities (i Unit I.Check box only if grantee has no CDBG rehabilitation activities: Multi-unit Activities (2+ Units) X 2.Staffing: number of Staff-Years (FTE staff years to tenths) 3. Current Program Year Expenditures: Activity delivery costs from CDBG funds a.Staff costs: P~mount expended in 2 above b.Other direct costs (not included in 4) Current Program Year Expenditures: For al! projects (a+b+c below) a.CDBG funds expended b.Other public (Federa!,State,!oca!) funds exp’d. c.Private funds expended 5. Project!Units Rehabilitated!Cow,mitred a. Number of projects com~mitted (multi-unit only) Proj ec< s Number of units co.~umitted Units Units Obligations: ~ount obligated for projects/units committed in 5aand 5b a.CDBG funds obligated b.Other public(Fed.,State,loca!) funds obligated c.Private funds obligated 7. Projects/Units Rehabi!itated!Completed a. Number of projects completed(multi-unit only) Projects Number of units completed Units Units 8.Cumulative Expenditures: a.CDBG funds expended b.Other public(Federa!,State, !oca!) funds exp’d. c.Private funds expended 09/26/07 4 The PR26 report shows the incorrect amount of program income received during fiscal year 2006-2007. Line 05 shows a total amount of $121,670.55 received, however, the actual total amount of program income received in fiscal year 2006-2007, was $1 !8,365.31 as demonstrated in both the PR01 report. Because of this, there is a difference between some of the amounts on the PR26 report and the financial summary prepared by the City of Pato Alto. Line PR 26 Report Amount Correct Amount 05-$121,670.55 i $118,365.31 08 $1,242,054.55 $1,238,749.31 16 $675,221.64 i $671,916.40 43 $121,670.55 $118,365.31 45 $8zz,zz0._ z i SSz0~04z.zl 46 118.16%18.23% In addition, line 33 shows a total amoun’~ of program income received in the previous program ?,ear as $8,_,zz6.3z. However, the actual amount received was $77.617.33. L~ne PR 26 Report Amount i Correct Amount 133 $82,356.53 1577,617.33 !35 $794,0_~6.>~I $789,-97.~ 36 14.29°./o i14-38°/; X O z Z z ~e oo i o o o oo o ~~00000~000 ~00000 000 ~O0000~c~O00 z 0 z o oooo~oo~ ooooo oo o Z o~gggo~gggg;gg°ggg°o ~o 0 ~0 ~ggggggggg g goooogoooggggggggggooooooooo oooooooooo oooooooooo ~~000000000000000000 0~000000000000000000 © © © © z Z o x z z o z oo Z 00o00~ Z ~ooooo z-,oooxZ~ ~ 0 0 z © © x Z ~ n ~o ~ z z..~ ~~ N X z z Z ~ z ~-~ C~ Z o Z t~ © 0 o ~ o ~ o~ o ~ o 0 ~: Z 0 z © (,4 z Z g z z © < Z 0 ~ z o o 0000 O00X 0 t~ 0 0 0:~ 0 g o o~ < o m o o o -a 0~ o z 0 Z Z x z z z [=3 0 cz o o ~ o © X z 0 0 0 0 O00X 0 0 (D o ~ 0 0000000000~ Ot~9 Z [~ > © x Z z 0000 < o o 0 Z z o z z ~ z~n ~ 0 0 ~-00 < (’3© ~ Z z Z o Z cz 0000000000~.~,00 0 0 0 0 0 0 0 0 0 0 (~ z 0 ~ ~ © © z Priority _.,Need Category Catholic Charities - Long Term Care Ombudsman Clara-Mateo Alliance - Shelter /Transitional Housing (Families) Clara-Mateo Alliance - Shelter /Transitional Housing (Adults) Emergency Housing Consortium - Homeless Shelter Services InnVision - Urban Ministries Drop-In Center Palo Alto Housing Corporation -[~p ortive Services Shelter Networ~ - Midpeninsula Housing Program Mid-Peninsula Alano Club Expended $5.800 $18,725 $18,322 $7,760 $21,250 $20,270 $16,375 $5,000 Number of Beneficizries Served Proposed 320 160 I 55O 50 55O !3] 50O 35 Accomplished 674 249 43 3,359 153 627 4t Project Sentine! (fair housing services) Ci.t), of Palo Alto Admin Sub-total $26,800 $124,536 $151,336 26 N/A 26 Community Housing Alliance - Ahna Garden Apartment Acquisition Economic and Social Opportunities - Housing and Energy Services Stevenson House - Fire Alarm Project i Sub-total $250,000 $1s 281 $3,000 $268,281 10[ 26 t20 156 27!NiA 27 10 Underway 23 Underway Sub-total S33,713 1 Grand Total $566.832 2.479 Joseph L. 280 Waverley Street Pa]o Alto, California 94301 (4-~) 323-3496 September t4, 2007 Ms. E!oiza Muri!io-Garcia Dept. of Planning & Communihl Environment City of Pato Alto 250 Hamilton Avenue Pa!o Alto CA 94301 Dear Ms. Muri!lio-Garcia, Thank you for sending me the draft CAPER due to HUD 9-28-07. ! have <+"4~-’4 .. carefully and submit the ~ " °,o!lowm9 citizen comments: Page I9 of the IDIS states ...,,~,~, persons have had Bccess to decent affordable housing. The meanin9 of this assertion is hard to fathom; please consider delet,,.g it. k4ost of Pa!o Alto~s 60,000÷ residents "have had access to decent affordable hous,ng. Per page ! 8 of the IDiS, 3,359 appears to be the totai number of persons served by the lnnVision/Urban MiniSt,’-y Dropqn Center (whose "Location" is shown incorrec:tly as 974 Wi!low Road, San Jose CA}. As shown on page 9 of the CAPER text, !nnVision’s homeless service center is at 33 Encina Way, Palo Alto, part of the Opportuni~/Center Project. Page 9 goes on to state that as of ~ z/z//06 le<s than half (42 of 88) of the Center’s housing un~=’~ were occupied by’ p~’~o:~’---,.~ previously homeless. Many citizens in Pa!o Alto worked for more than 10 years to make the $23 miiiion Opportunity C"-~’+~’-~, ,,~ a ", eahty. A .primary goal was to eliminate homelessness in one of America’s most affluent cities. More than a few are disappointed that goal has not been achieved. it is sad -~o read on page 7 that Section 8 Housing Choice _ouche, use decreased 27% t~me., that many Paio Altoyear-to-year to only 209 in fiscal 2006/07 white over four" < households (879) remain on the waiting list for such vouchers. Finally, the 77 total pages of the draft are a disturbing reminder of the high cost of bureaucracy. ~t is regrettable that we take money from taxpayers in all 50 states, funnel it through the Washington administrative shrinker, then dole out what’s left in block grants to communities which start by taking 15% (allocated per your page 23) to 27% (actua! spent on administration per page I of the Financial Summary of the Grantee Performance Report: $15I ,336 of $566,833 total expenditures) off the top to administer the dwindling remainder and report back to Washington. Please remember to revise the cover page which asks "Were citizen comments about this report received...?; your current draft says "No". Yours truly, cc:Stephen A. Ems~ie Frank Behest Yoriko Kishimoto ....:t’._~. "j ._ Z_._-L_ ~ .....~ ......~.._-~-_.1.~__ Septe.mber 25,2007 Piarmin$ ~TransRor ration Mr. Joseph L. Baldwin 280 Waverley Street Palo Alto, CA 94301 Dear Mr. Baldwin: Thank you for ).’our comments on, the fiscal year 2006/2007 draft CAPER. Staff responses to your comments appear below. Your comments and staff responses will also be attached to the final ~ersion of the CAPER, which will be submitted to HUD on September 28~ "Page 19 of the IDIS states "3,359 persons have had access to decem affordable housing." The meanin~ of this assertion is hard to fathoml please consider deletin~ it. Most ofPalo Alto;s 60,000+ residents "have had access to decent affordable housing." InnI~sion ’2 Urban ~/inisrr>,program. C~2~ grantees are r~qufred to repoT"~ szaristics based on HUD’s pe~formonce measurements of which one is access to ~aoula hm, e read ,359decent ~brd~bZe housing The IDI5’ descmption persons ha~e had impro~,ed access to decent a~:ordab[e housing. " This has been reprised ~n the report Comment #2.. "Per page 18 of the IDIS, 3,359 appears to be the total number of persons sera, ed by the InnVision/Urban Ministry Drop-In Center (whose "Location" is shown incorrectly as 974 Willow Road, San Jose, CA). As show- on page 9 of the CAPER text, hm\Zision’s homeless service center is at 33 Encina Way, Pa]o Alto, part of the Opportunity Center Project." Page 1 of 4 250 Piami!tor~ Avenue E0 Box 10250 Palo Alto, CA 94303 650.329.2404 650.329.2i54 fax Respoase #2: 3~ 35~O persons is indeed the totaZ number o]~ersons served by the Inn~SsioniUrban Minisr~3~ Drop-ln Center and ir is ~ocated at 33 ~ncina Way in Pnlo Alto. 974 WilZow 2ood~ San ~;ose~ CA is [he address for InnP~sion ~s administrarive offices, Comment #3: "Page 9 goes on to skate that as of 12/27/06 less than half (42 of 88) of the Center’s housing units were occupied by persons previously homeless £{any citizens in Palo Alto worked for more than. 10 years to make the $23 million Opportunity Center a reality. A priraary goal was io eliminate homelessness in one of America’s most affluen~ cities. More than a few are disappointed that goal has not been achieved." Response #3: According to interest list form for the OpportuniW Center, applicants must meet homeless or at risk qfbecoming homeless criteri~ in. order to be considered for housing. At-risk of horneZessness is defined by the State qf CaZ~<orn~a _~4ulri- ~ami~y ,~z~sing 2rogram (.~f~) as " (2) ,households with inco~es ar or below the greater of 2O pertenr of Sra~e _~%dian Z~come (~ZM~) or Area _Median Znco~e d~_MI) w~th no renra~ subsidy avai~abie ro the household; or (2) households with ~ncomes above 20percent bur nor exceeding A3(Iwho. (a) face ~mmed~are eviction and have been unable ro idenr¢~ subsequent residence; or ~) face imminent re~ease from an institution hospital or fos~er care ~vstem) where other h.ousingy~acemenr resources are nor ava~iab~e~ or (c)reside in an overcrowded setting (more than ~o persons per iivingis~eep~ng are@ in whzch the household does nor ho!d a iease; or (a) reside in substandard housing subject to a current @iciai vacation notice; or (e) pay more than 50percent of income ~n housing costs. Comment #4: "It is sad to read on page 7 that Section 8 Housing Choice voucher has decreased 27% year-to-year to only 209 in fiscal 2006/07 while over four times that many Palo Alto households (879) remain on the waiting list for such vouchers." Page 2 of 4 Please remember to revise the cover page which asks "Where citizen comments about this report recei~.’ed... ?;)’our cut-rent draft sa)~s Please contact me should ),on have an); questions about the CAPER or the CDBG program in general, I can be. reached at (630) 329-2428. Sincerely; ( ]Eloiza Muril]o-Oarcia CDB G Planner Sie~’e Emslie, Direcior of Planning and Comrr~uniiF E~n~dronmeni Frank Behest, City Manager ~oriko Kishfmoto, Cathy Sie~e!... Advance Plannin~ _K~fana~e.r Pa.~e 4 of 4