HomeMy WebLinkAbout2004-04-06 City CouncilCity of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
ATTENTION:FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:
SUBJECT:
APRIL 6, 2004 CMR: 190:04
PROPOSED FISCAL YEAR 2004/05 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG)
FUNDING ALLOCATIONS AND DRAFT ACTION PLAN
REPORT IN BRIEF
This report transmits the recommendations of City staff and the Citizens Advisory
Committee (CAC) for the expenditure of $929,440 in FY 2004/05 Community
Development Block Grant (CDBG) funds. The draft Fiscal Year 2004/05 Action Plan
includes the funding recommendations, contingency recommendations, a commitment of
CDBG funds for an affordable housing project, and the second year of a two-year
funding cycle coordinated with the Human Services Resource Allocation Process
(HSRAP) beginning in fiscal year 2003/04. ,
RECOMMENDATION
Staff and the CDBG Citizen’s Advisory Comlnittee recommend that
Committee recommend to the City Council approval of the following:
the Finance
Allocate CDBG funding as recommended by staff and the Citizens Advisory
Committee (CAC) in the final 2004/05 Action Plan update to the Consolidated Plan
for the period 2000 to 2005.
o Commit CDBG funds to repay the General Fund for a portion of the CDBG-eligible
site acquisition costs in connection with a new affordable housing project if a site can
be identified and acquired in 2004/05.
CMR: 190:04 Page 1 of 10
Authorize staff to submit the 2004/05 Action Plan to the Department of Housing and
Urban Development (HUD) by the May 15, 2004 deadline.
Authorize the City Manager, on behalf of the City, to execute the 2004/05 application
and Action Plan for CDBG funds and any other necessary documents concerning the
application, and to otherwise bind the City with respect to the application and
commitment of funds.
BACKGROUND
Consolidated Plan
The 2000-2005 Consolidated Plan, adopted by Council on May 8, 2000, is a strategic
plan of action that addresses priority housing and community development needs, and
sets specific goals for attaining identified objectives. The Consolidated Plan and the
Annual Action Plan updates are a requirement in order for the City to receive federal
funding from programs such as the Community Development Block Grant (CDBG) or
HOME Investment Partnership Act. The Draft 2004/05 Annual Action Plan update has
been made available for public review and comment during the period March 22 to April
22, 2004 (Attachment B).
The primary need identified in the Consolidated Plan is for affordable housing for low-
income persons or persons with special needs. The goal for the five-year period is to
provide 125 units of permanent, affordable housing. Palo Alto’s CDBG program is
directed toward expanding and maintaining the affordable housing supply, promoting
housing opportunities and choices, maintaining and improving community facilities, and
providing supportive services for targeted low-income groups, including persons who are
homeless, persons with disabilities, the elderly, and other special needs groups. In 2002,
the City Council approved a two-year funding cycle for CDBG applications similar to the
HSRAP process. All of the proposed projects for CDBG funding for fiscal year 2003/04
and fiscal year 2004/05 address the priority housing and supportive service needs
identified in the adopted Consolidated Plan.
CDBG Regulations
The City of Pato Alto receives funds annually from HUD as an entitlement city under the
CDBG Program, authorized by Title I of the Housing and Community Development Act
of 1974 (the Act), as amended. The primary objective of the Act is ~the development of
viable urban communities by providing decent housing and a suitable living environment,
and expanding economic opportunities, principally for persons of low and moderate
income."
CMR: 190:04 Page 2 of 10
HUD regulations require that all activities must meet one of the three national objectives
of the CDBG Program:
Benefit low- and very low-income persons;
Aid in the prevention or elimination of slums or blight; or
Meet other community development needs having a particular urgency, or
posing a serious and immediate threat to the health or welfare of the
community.
Palo Alto has historically expended all of its CDBG funds on projects benefiting low- and
very-low-income persons.
There are three primary CDBG program activity areas:
Public Services: Social service activities that benefit low-income persons. The
maximum amount that can be expended under this category is 15 percent of the grant
allocation and 15 percent of the program income for the previous year.For fiscal
year 2004/05, the maximum available for public services is $129,000.
Public Service Cap Calculation:
2004/05 Entitlement Grant (Est.)
Program Income - HIP 2003/04’ (Est.)
Program Income - PAHC 2003/04" (Est.)
$816,000
$34,000
$10,000
$860,000 x 15%=$129,000
o Planning and Administration: This category may be used to reimburse for fair housing
activities, CDBG program management, oversight and coordination, environmental
r.eviews, and general planning activities. Federal regulations limit the amount that can
be spent in this category to 20 percent of the grant and 20 percent of the estimated
program income for the following year. For fiscal year 2004/05 funding is limited to
a maximum of $172,000.
Planning/Administration Cap Calculation:
2004/05 Entitlement Grant (Est.)
Program Income - HIP 2004/05’ (Est.)
Program Income - PAHC 2004/05’ (Est.)
$816,000
34,000
10,000
$860,000 x 20%=$172,000
*Federal regulations require the public service and planning/administration caps to be
calculated on program income for different years.
CMR: 190:04 Page 3 of 10
o Capital Projects: Capital improvement activities such as housing acquisition,
rehabilitation, accessibility, and public improvements are the primary focus of the
CDBG program. There are no funding limitations in this category.
CDBG Applications
Applications for 2003/05 funding were mailed to area housing and human service
providers on October 16, 2002 and posted to the City’s website. A notice announcing the
availability of applications for 2003/04 and 2004/05 CDBG funding was published in the
Palo Alto Weekly in October 2002. A proposal-writing workshop was conducted in
November 2002 to assist applicants with program regulations and project eligibility
questions. The City received 18 applications for funding totaling $1,298,365 for FY
2003/04 and 15 applications for funding totaling $1,102,153 for FY 2004/05.
Citizen Participation
The City follows a Citizen Participation Plan to encourage public participation in the
CDBG allocation and assessment process. The Citizen Participation Plan calls for a nine-
member Citizens Advisory Committee (CAC), eight of whom are selected by the Mayor.
One slot on the CAC is reserved for a member of the City’s Human Relations
Commission (HRC). Members of this year’s CAC are: Adam Atito, Jeff Blum (HRC
Liaison), Irvin Dawid, Chris Kelly, Steven Mullen, Elsbeth Newfield, Jeffrey Rensch,
Sylvia Smitham and Heather Trossman Kushlan. Heather Trossman Kushlan was
selected as the Committee’s spokesperson. The CAC met weekly during January and
February 2003, to discuss and evaluate the applications, interview the applicant agencies
and come to a consensus on funding levels for both the 2003/04 and 2004/05 funding. In
addition, the CAC toured local applicant sites on two separate days. The funding
recommendations made by the Committee and supported by Council in 2003 were
preliminary for fiscal year 2004/05; therefore, the CAC met only on three occasions in
January and March 2004 to review and finalize those funding recommendations.
DISCUSSION
In addition to the annual funding allocations for the three primary CDBG program
activity areas, several new circumstances are addressed in this report.
Two-Year Fundin~ Allocation Process
Pursuant to Council direction on May 16, 2002, staff has implemented a two-year
funding allocation process, coordinated with Palo Alto’s Human Services Division cycle
for the Human Resource Allocation Process (HSRAP). The two-year process provides the
opportunity for City and non-profit staff to undertake longer-term strategic planning and
maximize available funding resources. Fiscal year 2004/05 is the second year of the
two-year funding cycle.
CMR: 190:04 Page 4 of 10
Expenditure Rates
HUD regulations require that CDBG funds be expended in a timely manner. The
regulatory requirement is that no more than 1.5 times a jurisdiction’s annual entitlement
grant amount may remain in the letter of credit 60 days prior to the end of the program
year. In an effort to reduce the backlog of unspent CDBG funds, HUD informed all
jurisdictions of a new policy to employ monetary sanctions against jurisdictions that
exceed the regulatory standard. Failure to meet the expenditure standard by May 1, 2005
will cause HUD to reduce the City’s next grant by 100 percent of the amount in excess of
1.5 times the annual grant. For this reason, all funding applications were scrutinized by
staff and the CAC to insure the readiness of the program or project to move forward and
expend funds in a timely manner. To date, the City has been able to meet its expenditure
standard.
Commitment of CDBG Funds
On May 13, 2002, the City Council allocated $1,000,000 to the City’s Housing Fund to
help defray site acquisition costs for a new affordable rental housing project, committing
future years CDBG funds, i.e. FY02/03, 03/04 and 04/05. HUD rega~lations permit
allocations from future year’s funding if the request precedes the expenditure and the
action had been noticed and identified in the Consolidated Plan or Action Plan updates.
For example, if the site were acquired in FY02/03, CDBG funds could be loaned from the
General Fund and paid back from the balance in the CDBG Housing Development Fund
and from future CDBG allocations. The City Council allocated $118,500 of FY02/03
funds with the balance of $881,500 funds to be split among FY03/04 and 04/05. The
request was modified for fiscal year 2003/04 because a site had not yet been identified
and the CDBG Housing Development Fund was allocated $100,000.
Since a new housing site has not been identified and given HUD’s new mandate for
timely expenditure of funds, staff recommends an allocation of $439,312 for fiscal year
2004/05 for predevelopment and!or site acquisition costs if a site is identified in fiscal
year 2004/05. However, if a site is not identified in fiscal year 2004/05, staff and the
CAC recommend that the funds be used for another CDBG-eligible project. One
alternative is to provide funding if needed for the construction of the Opportunity
Center’s services facility for site clean up or another eligible activity related to the
Opportunity Center.
2004/05 Funds Available for Allocation
The total amount available for allocation this year is $929,440. The City’s 2004/05
CDBG grant is $816,000, a 3.1 percent increase over the prior year’s grant of $791,000.
$11,540 in funds remaining from previous projects is being reallocated to new projects.
Also included is $44,000 in program income (income generated directly from the use of
CDBG funds) expected to be received in 2004/05, plus $57,900 in program income
received in previous years in excess of the estimated amount.
CMR: 190:04 Page 5 of 10
In summary:
$816,000
11,540
34,000
10,000
57,9OO
$ 929,440
FY 2004/05 CDBG entitlement grant from HUD*
Reallocation of other previous funds
Estimated program income for 2004/05 from the City’s Housing
Improvement Program (HIP), a single-family residential
rehabilitation program that is no longer operational
Estimated program income for 2004/05 from the Palo Alto Housing
Corporation that is generated when rental income exceeds expenses
on specific properties acquired or rehabilitated with CDBG funds
Actual program income received in previous years in excess of the
estimated amounts that were allocated
*The amount of entitlement grant is not officially confirmed until the President has
signed a budget bill approved by the United States Congress.
Funding Recommendations - FY 04/05
The chart on the following page shows the applications that were received and the CAC
and staff funding recommendations. It should be noted that changes may be necessary in
the event that the City’s entitlement grant is increased or decreased when the President
signs the actual budget. Attachment A is a narrative explaining the funding requests and
funding recommendations in more detail.
Staff and the CAC recommend the same level of funding as in fiscal year 2003/04 for
public service projects, with the exception of Urban Ministry/InnVision based on its
performance to date. Urban Ministry/InnVision has significantly exceeded its goals in the
current fiscal year. It proposed serving a total of 850 unduplicated individuals during
fiscal year 2003/04 and had served over 4,000 people by December 31, 2003.
In the fair housing/administration category, staff and the CAC recommend funding at the
same level for fair housing services and a small increase for CDBG program
administration and support. The reason for the increase is that the City will need to
prepare an update to the Consolidated Plan (a five-year plan required by HUD) by May
2005 for the period of July 1, 2005 to June 30, 2010.
Five applications for capital projects were received in fiscal year 2004/05. Staff and the
CAC recommend funding for four of the five capital projects. Lytton Gardens applied
for a total of $109,695 to be divided over fiscal y~ars 2003/04 and 2004/05 for a kitchen
renovation project. Lytton Gardens was not awarded funding in fiscal year 2003/04
because it had proposed spreading the project over two years, which would have made
the project very difficult for the City to administer. Staff and the CAC recommend full
funding on the condition that the rehabilitation project is compressed into two months as
CMR: 190:04 Page 6 of 10
opposed to two years to reduce prevailing wage monitoring costs. Lytton Gardens staff
has indicated the project can be completed in a two-month timeline. Palo Alto Housing
Corporation applied for funding to renovate the Barker Hotel, a 26-unit single-room
occupancy (SRO) hotel in downtown Palo Alto in either of the two years of the funding
cycle. Staff and the CAC did not recommend funding for the Barker Hotel in fiscal year
2003/04 because the project was of a less urgent nature than some of the other projects.
Staff and the CAC recommend full funding for the Barker Hotel renovation project in
fiscal year 2004/05. In addition, staff and the CAC recommend funding for the
Stevenson House hot water pipes project and the CDBG housing development fund.
Economic and Social Opportunities (ESO) received funding in fiscal year 2003/04 to
assist 26 Palo Alto households and also applied for fiscal year 2004/05 funding. It has
assisted a total of 53 households, however 52 of these households were located at one
senior housing project. Outreach efforts to date have not resulted in a variety of
households accessing this program..Staff and the CAC do not recommend funding for
accessibility and energy efficiency upgrades; however funding may be supported in the
future if the outreach program is restructured.
CMR: 190:04 Page 7 of 10
FUNDING RECOMMENDATIONS*
APPLICANT AGENCY
2003/2004
FUNDING
1. Catholic Charities
Long-Term Care Ombudsman
2. Emergency Housing Consortium
Palo Alto HOMES Pro~am
3. Palo Alto Housing Corporation
SRO Resident Support Services
4. Shelter Network - Haven Family House
Transitional Housing for Homeless Families
5. Clara-Mateo Alliance
Family Shelter & Services/Elsa Segovia Center
6. Clara-Mateo Alliance
Single/Couple Shelter & Services
7. Urban Ministry
Homeless Drop-in Center
8.St. Vincent de Paul
Day Worker Center
PUBLIC SERVICES
5,550
7,650
22,300
19,000
20,900
25,000
17,750
9,500
2004/2005
FUNDING
REQUEST
8,940
10,500
70,002
20,000
22,000
28,750
60,000
15,000
Total Public Services (Cap $129,000) 127,650 235,192
FAIR HOUSING/ADMINISTRATION
9. Project Sentinel 26,800 26,800
10. City of Palo Alto 140,000 147,000
Pro~am Administration
Total Administration (Cap $172,000)166.800 173,800
CAPITAL PROJECTS
CAC/ STAFF
RECOMMEN-
DATIONS
5,550
7,650
22,300
19,000
20,900
25,000
19,100
9,500
129,000
26,800
145,200
172,000
11. Community Housing Inc.
Lytton Gardens Kitchen Renovation
12. Palo Alto Housing Corporation
Barker Hotel Improvement Plan
13. Economic and Social Opportunities
Housing and Energy Services Program
14. Stevenson House - Senior Housing
Safe Showers Pro~am
15.City of Palo Alto/Housing Development Fund
Pre-development of New Rental Housing
Project
Total Capital Projects (Cap $628,440)
-0-
60,000
45,200 for
Bathtub
upgrades
100,000
53,728.56
41,173
60,000
38,260
500,000
693,161.56
1,102,153.56
109,695
41,173
-0-
38,260
439,312
628,440
929,440
TOTAL
*Changes may be necessary if the amount of funding is i~acreased or decreased when the President
signs the budget.
CMR: 190:04 Page 8 of 10
POLICY IMPLICATIONS
All of the applications recommended for funding in fiscal year 2004/05 are consistent
with the priorities established in the City’s adopted Consolidated Plan for the period 2000
to 2005. They are also consistent with the housing pro~ams and policies in the adopted
Comprehensive Plan.
TIMELINE
Funding recommendations made by the Finance Committee will be forwarded to the City
Council for review and approval at a public hearing scheduled for May 3, 2004. The
funding allocations and Annual Action Plan update will be submitted to HUD by the May
15, 2004 deadline.
ENVIRONMENTAL REVIEW
For purposes of the National Environmental Policy Act (NEPA) and the California
Environmental Quality Act (CEQA), budgeting in itself is not a project. HUD
environmental regulations for the CDBG program is contained in 24 CFR 58
"Environmental Review Procedures for Title I Community Development Block Grant
Pro~ams". The regulations require that entitlement jurisdictions assume the
responsibility for environmental review and decision-making under NEPA. Prior to the
commitment or release of funds for each of the proposed projects, staff will carry out the
required environmental reviews or assessments, and certify that the review procedures
under CEQA, and HUD and NEPA regulations have been satisfied for each particular
project.
ATTACHMENTS
Attachment A:
Attachment B:
Staff and CAC recommendations for FY 2004/05 CDBG Funding
2004/05 Draft Annual Action Plan Update of the Consolidated Plan
for the period 2000 to 2005
PREPARED BY:
Elolza Munll~-Garcla, Associate Planner - CDBG
DEPARTMENT HEAD /S~P,I:I~N EMSLIE
Director of Planning and Community Environment
CITY MANAGER APPROVAL:
HARRISON
Assistant City Manager
CMR: 190:04 Page 9 of I0
CC:CDBG Citizens Advisory Committee Members
2004/05 CDBG Applicant Agencies
CMR: 190:04 Page 10 of 10
ATTACHMENT A
STAFF AND CITIZENS ADVISORY COMMITTEE (CAC)
RECOMMENDATIONS FOR FISCAL
YEAR 2004/05
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
PUBLIC SERVICE APPLICATIONS
1.Emergency Housing Consortium (EHC) - Palo Alto HOMES Program
150 Almaden Blvd., 5th Floor, San Jose, CA 95113
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$7,650 $10,500 $7,650
Proposal: Agency provides emergency shelter and comprehensive supportive services to
homeless men, women, families with children, and youth in various facilities in Santa Clara
County. EHC operates a youth shelter in San Jose, the winter shelters at the National Guard
Armories in Sunnyvale and Gilroy, the regional Reception Center in San Jose, the Sobrato
Family Living Center in Santa Clara, and various other transitional housing progams in the
County. Supportive services include prepared meals, counseling, child care, transportation,
case management, job counseling, and skills workshops to help secure housing and/or
employment.
Priority Need: Shelter and services for persons who are homeless
Discussion: Current contract objectives are being met. This agency provides the majority of
homeless shelter services in Santa Clara County, and is an important resource for persons
from the Palo Alto area. Agency anticipates providing 2,600 person/shelter nights to 50
unduplicated homeless persons from Palo Alto.
2.Palo Alto Housing Corporation (PAHC) - SRO Resident Support Services
439 Emerson St. and 753 Alma St., Palo Alto, CA 94301
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$22,300 $70,002 $22,300
Proposal: The Palo Alto Housing Corporation maintains two SRO properties: the Barker
Hotel and Alma Place. The 26-unit Barker Hotel serves a very low-income population of
residents with a history ofhomelessness and special needs. Alma Place is a 106-unit SRO
apartment building that serves very low-income residents. A counselor and service
coordinator provide support to individual tenants as needs or problems arise, and on an on-
going basis. These intensive case management and supportive services play a vital role in
helping the residents maintain their stability and housing.
Priority Need: Prevention of homelessness
Discussion: Current contract objectives are being met. The Barker Hotel and Alma cannot be
effectively operated for the benefit of this population without additional services. The
service progam has dramatically reduced turnover and eviction rates at both facilities.
3. Catholic Charities-Long-Term Care Ombudsman
2625 Zanker Road, San Jose, CA 95134
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$5,550 $8,940 $5,500
Proposal: Agency provides confidential advocacy and complaint investigation services to the
approximately 917 residents in Palo Alto’s licensed long-term care facilities. Pro~am
beneficiaries are the frail, chronically ill, primarily elderly residents in Palo Alto’s licensed
skilled nursing and residential care facilities. Agency staffandtrained community volunteer
ombudsmen visit residents on a regular basis and as special circumstances dictate (i.e., in
response to specific complaints). Agency staff and volunteers investigate complaints,
including allegations of abuse and neglect, seek fair resolution to problems, and promote
residents’ rights for quality care and quality of life in the long-term care setting.
Priority Need: Supportive services for lower-income persons.
2
Discussion: The Ombudsman Program services are not duplicated by any other agency, and
provide an important presence in long-term care facilities. The Ombudsman Program is
currently exceeding its program goals and objectives. Local volunteers are utilized to
provide the majority of site visits. Agency proposes contacting/interviewing 390 Palo Alto
residents and conducting 30 complaint investigations.
4. Shelter Network- Haven Family House
260 Van Buren Road, Menlo Park, CA 94025
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$19,000 $20,000 $19,000
Proposal: Haven Family House provides transitional housing and a comprehensive array of
supportive services to homeless families in a newly constructed facility in Menlo Park.
Families stay in one- and two-bedroom apartments for up to four months until they can re-
connect with permanent housing, jobs, and the skills and resources necessary to break the
cycle ofhomelessness. An on-site licensed childcare facility is also available.
PrioriW Need: Transitional housing and supportive services for homeless families with
children.
Discussion: Haven Family House is an important resource for homeless families with
children from northern Santa Clara County. The facility expects to serve 45 homeless
families representing more that 150 parents and children. It is expected that three to five of
the families will be from Palo Alto (representing approximately 11 to 20 parents and
children). In addition, Shelter Network anticipates providing 20-50 Palo Alto residents with
services at their other shelter facilities. Shelter Network estimates that 70 percent of families
completing the program will successfully return to permanent housing.
5.Clara-Mateo Alliance (CMA) - Family Shelter Wing
795 Willow Road, Bldg. 323-D, Menlo Park, CA 94025
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$22,000 $20,900 $20,900
Proposal: The Clara-Mateo Alliance has six individual bedrooms devoted to homeless
families. Annually, 30 families (a total of 90 parents and children) are provided with housing
and supportive services. A minimum of 3 homeless families with children will be from Palo
Alto. A transitional housing component has been added with the opening of the Elsa Segovia
Day Center for Homeless Women and Children. The Elsa Segovia Day Center is the only
center for women and children between San Jose and San Francisco. CDBG funds will be
used to provide additional supportive services to program beneficiaries.
Prioritw Need: Shelter, supportive services, and transitional housing for homeless families,
and a Day Center for homeless women and children.
Discussion: This project is an important resource for the growing number of homeless
families with children in northern Santa Clara County.
6. Clara-Mateo Alliance - Shelter and Supportive Services
795 Willow Road, Bldg. 323-D, Menlo Park, CA 94025
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$25,000 $28,750 $25,000
Proposal: Clara-Mateo Alliance (CMA) provides a 63-bed shelter for homeless individuals
and couples, and thirty transitional housing rooms for graduates of the shelter. They provide
supportive services aimed at increasing self-sufficiency and finding and maintaining stable
housing. The shelter targets the under-served populations such as homeless persons with
disabilities, mental illness, psychiatric disorders, and chronic substance abusers.
Priority Need: Shelter and services for persons who are homeless
Discussion: This program is an important link in the county’s homeless continuum of care. It
has been operating since 1997 and serves individuals and couples. It is a collaborative effort
with the Veterans Administration, other shelter and service providers and the counties of
Santa Clara and San Mateo. The facility serves the homeless sub-populations with some of
the greatest needs. It is anticipated that the total program will provide shelter to a minimum
of 50 Palo Alto individuals and couples.
7.Urban Ministry of Palo Alto/InnVision - Drop-In Center
400 Mitchell Lane, Palo Alto 94301
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$17,750 $60,000 $19,100
Proposal: Agency proposes to provide basic survival services to the local homeless
population. Services include a light breakfast, used clothing, toiletries, phone, mail,
messages, bus passes, and referrals to other agencies. Urban Ministry caseworkers are
available to assist clients find shelter, medical care, employment and to help with other
problems. The Drop-In Center operates from the back of the Red Cross building at 400
Mitchell Lane in Palo Alto and.serves an average of 150 persons each weekday morning. In
addition, the Hotel de Zink Emergency Shelter serves 15-17 persons each night.
Priori _ty Need: Shelter and services for persons who are homeless.
Discussion: Urban Ministry/InnVision has significantly exceeded their goals in the current
fiscal year. They had proposed serving a total of 850 unduplicated individuals and had served
over 4,000 by December 31, 2003. Staff and the CAC recommend that Urban Ministry’s
funding be increased based on their performance to date. In addition, Urban Ministry has a
strong presence in Palo Alto and serves a large number of people who might not otherwise
seek supportive services.
8.St. Vincent de Paul Society- St. Joseph the Worker Center
1880 California Avenue, Mountain View, CA 94043
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$9,500 $15,000 $9,500
Proposal: The St. Joseph the Worker Center was formed in Mountain View eight years ago
to connect day laborers with employers. The Center provides a safe alternative for laborers,
who often gather along E1 Camino Real in Mountain View, Los Altos and Palo Alto, to find
employment. The Center provides a setting in which both workers and employers can meet
and negotiate work projects, hours and conditions. St. Vincent de Paul staff also help with
job applications and job readiness training, including classes in English as a Second
Language. The Center relocated to its current site in May 2002 from its original location in
Los Altos.
Priority Need: Supportive services for lower-income persons.
Discussion: The Center serves approximately 3,000 unduplicated workers living in the north
Santa Clara County area. This is the only program of its kind that is especially geared to
meet employment and basic needs of an extremely-low-income, underserved population in
the Palo Alto area.
FAIR HOUSING/ADMINISTRATION
9. Project Sentinel - Fair Housing Services
2003/04 Funding Funding Request Staff/CAC
FY 04/05 Recommendation
$26,800 $26,800 $26,800
Proposal: The City of Palo Alto issued a joint Request for Proposals (RFP) to Provide Fair
Housing Services for North Santa Clara County with the Cities of Mountain View and
Sunnyvale beginning in fiscal year 2003/04 with an optional renewal in fiscal year 2004/05.
The Cities selected Project Sentinel as their fair housing service provider. Project Sentinel
will provide investigation, counseling and legal referrals for victims of housing
discrimination; community education and outreach regarding fair housing law and practices;
and research, analyses, and reporting for City staff and officials regarding fair housing
practices.
Priority Need: Fair Housing Services
Discussion: The collaboration between the 3 cities came as a result of the Countywide Fair
Housing Study, which was released in January 2003. The Department of Housing and Urban
Development (HUD) regulations require CDBG entitlement jurisdictions to affirmatively
further fair housing choice. Staff and the CAC recommend a contract renewal in fiscal year
2004/05 at the same level of funding they were allocated in fiscal year 2003/04.
10.City of Palo Alto - Department of Planning and Community Environment
250 Hamilton Avenue, Palo Alto, CA 94301
2003/04 Funding Funding Request StafffCAC
FY 04/05 Recommendation
$140,000 $147,00 $145,200
Proposal: Funding is requested to reimburse the City General Fund for costs related to the
overall management, coordination, monitoring and evaluation of the CDBG Progam,
including oversight of public service contracts, data gathering, studies, analysis, plan
preparation, and the identification of actions for implementation of plans.
Priority Need: CDBG Progam Administration and support
6
Discussion: The cost of administering the CDBG program is approximately $200,000 per
year. A reimbursement of $145,200 from grant funds is well within the 20% administrative
cap and helps alleviate General Fund budgeting constraints. Additional funding was
requested in fiscal year 2004/05 because the City will need to prepare an update to the
Consolidated Plan by May 2005 for the period of July 1, 2005 to June 30, 2010.
CAPITAL AND/OR HOUSING PROJECTS
11.Community Housing Inc. -Lytton Gardens Kitchen Renovation
649 University Avenue, Palo Alto, CA 94301
FY 03104
FY 04105
FundingRequest
$55,967.25
$53,728.56
2003/04 Funding
$0
Staff/CAC Recommend~ion
$0
$109,695
Proposal: Community Housing Inc. owns and operates Lytton Gardens I and II providing
318 units of affordable housing and multi-level care to low-income seniors2 This proposal is
to renovate 49 kitchens in their assisted living facility. A modem mini kitchen that will be
easier to use by frail elderly residents will replace the existing galley kitchens of 1974, which
do not comply with the Americans with Disabilities Act.
Priority_ Need: Rehabilitation of affordable rental housing
Discussion: Staff and CAC recommend funding of $109,695 on the condition that the
rehabilitation project is compressed into 2 months as opposed to 2 years to reduce prevailing
wage monitoring costs. Lytton Gardens staff has indicated the project can be completed in a
two-month timeline. This is the total amount of funding requested for both fiscal years.
12.Economic and Social Opportunities - Housing and Energ3’ Services Program
1445 Oakland Road, San Jose, CA 95112
FY 03/04
FY 04/05
Funding Request
$60,0OO
$6O,0O0
2003/04 Funding
$6O,000
Staff/CAC Recommend~ion
$6O,OOO
$0
Proposal: Agency proposes to assist a minimum of 26 low-income Palo Alto households
with home improvement services. These services are designed to identify and improve
hazardous conditions in homes, improve accessibility and use for seniors and individuals
with disabilities, improve energy efficiency and make necessary minor repairs in order to
avoid more expensive solutions in the future.
Priori _ty Need: Conservation of energy and improved accessibility for individuals with
physical disabilities
Discussion: This project received $60,000 in funding in FY 2003-04 to assist Palo Alto
households. As of December 31, 2003 they had assisted a total of 53 households, however
52 of these households were at one senior housing project. Outreach efforts to date have not
resulted in a variety of households accessing this program. Although ESO has assisted
several households, the need for this program does not appear to be as great as originally
anticipated. CAC and staff do not recommend additional funding to this organization in fiscal
year 2004/05, however funding may be supported in the future if the outreach program is
restructured and there is a demonstrated need for the continuation of the program.
13.Palo Alto Housing Corp. - Barker Hotel Improvement Plan
439 Emerson Street, Palo Alto, CA 94301
Funding Request 2003/04 Funding Staff/CAC Recommendation
FY 04/05 $41,173 $0 $41,173
Proposal: Palo Alto Housing Corporation seeks funding for improvements needed at the
Barker Hotel, a 26-unit single room occupancy (SRO) property located in downtown Palo
Alto. The improvement plan includes new carpeting, exterior paint, and installation of an
entry system and new sinks in the upstairs units.
Priori _ty Need: Rehabilitation of affordable rental housing
Discussion: Palo Alto Housing Corporation requested funding for this project in either year
of the two-year funding cycle. The Barker Hotel project was not funded in fiscal year
2003/04 because the project was not as urgent as some of the other projects that also applied
for funding in that fiscal year and it was not possible to fund every project. Staff and the
CAC recommend full funding for the Barker Hotel project.
14. Stevenson House- Hot Water Piping Project
455 E. Charleston Road, Palo Alto, CA 94306
FY 04/05
Funding Request
$38,260
2003/04 Funding
$45,200 for Bathtub
Up~ades
Staff/CAC Recommendation
" 9$.~8,_60
Proposal: Stevenson House provides 120 units of affordable rental housing to low-
income seniors. Since seniors are living longer, and there are almost no assisted living
facilities for low-income seniors, Stevenson House is attempting to provide supportive
services to their residents to help them maintain their independence as long as possible.
Their proposal is to refurbish the insulation and supports of the portion of the hot water
piping system installed on the roof.
Priorit-v Need:Rehabilitation of affordable rental housing
Discussion: Staff and the CAC recommend full funding for this project because it will
eliminate the need to make frequent repairs to the water pipe system. Stevenson House does
not have the necessary resources to cover the costs of major repairs because their affordable
rents do not cover more than normal operating costs. This project is intended to prevent
deterioration and failure of the hot water system, due to faulty insulation and inadequate pipe
supports. Without repair, the hot water system supplying water to resident apartments is in
danger of failure.
15. City of Palo Alto - CDBG Housing Development Fund
Planning Department, City Hall
FY 03/04
FY 04/05
Funding Request
$100,000
$500,000
2003/04 Funding
$100,000
Staff/CAC Recommend~ion
$100,000
$439,312
Proposal: On May 13, 2002, the City Council allocated $1,000,000 in CDBG funding to
the City’s Housing Fund to help defray site acquisition costs for a new affordable rental
housing project, committing future years CDBG funds, i.e. FY02/03, 03/04 and 04/05.
HUD regulations permit allocations from future year’s funding if the request precedes the
expenditure and the action had been noticed and identified in the Consolidated Plan or
Action Plan updates. For example, if the site were acquired in FY02/03, CDBG funds
could be loaned from the General Fund and paid back from the balance in the CDBG
Housing Development Fund and from future CDBG allocations. The City Council
allocated $118,500 of FY02/03 funds with the balance of $881,500 funds to be split
among FY03/04 and 04/05.
At the time the Council approved the allocation in FY 02/03, the site of the future project
was not yet identified but since an acre of land in Palo Alto typically costs $3 to $5
million an acre, it was anticipated that a commitment of all of the City’s Commercial and
Residential Housing funds together with $1,000,000 of CDBG would be needed to secure
a site. In July 2002, the City selected Eden Housing Inc. to evaluate the feasibility of sites
9
identified in the Housing Element of the Comprehensive Plan and to secure control of an
appropriate site. However, due to limited land availability and high land costs to date,
Eden Housing Inc. has not been successful in securing a site.
Priority Need: Affordable rental housing
Discussion: Since a new housing site has not been selected and HUD’s new mandate for
timely expenditure of funds, there was a modification of the May 13, 2002 action to
allocate future CDBG Housing Development funds. The FY03/04 funding allocation was
reduced to $100,000 in FY03/04 for pre-development costs for a site yet to be confirmed
and $500,000 was retained in FY04/05 for site acquisition. Staff and the CAC
recommend funding in the amount of $439,312 in order to fully fund Lytton Gardens, the
Barker Hotel and Stevenson House. In addition, if a site is not selected in FY 04/05 CAC
and staff recommend that the funds be used for another CDBG-eligible project. One
alternative is to provide funding, if needed, for the construction of the Opportunity
Center’s services facility for site clean up or another eligible activity related to the
Opportunity Center.
10
ATTACHMENT B
CITY OF PALO ALTO
Housing and Community Development
DRAFT
2004/2005 ACTION PLAN
Annual Update of the City’s Consolidated Plan for the Period
July 1, 2000 to June 30, 2005
Public Review Period March 22, 2004 - April 22, 2004
Prepared by Department of Planning & Community Environment
250 Hamilton Avenue
Palo Alto, California 94301
Steve Emslie, Director
For Information, Please Contact: Eloiza Murillo-Garcia, Associate Planner, CDBG
Planning Division, City of Palo Alto (650) 329-2428
Draft 2004-2005 Action Plan
CITY OF PALO ALTO
FISCAL YEAR 2004/2005 ACTION PLAN
ANNUAL UPDATE TO THE CITY’S CONSOLIDATED PLAN
FOR THE PERIOD JULY 1, 2000 TO JUNE 30, 2005
Background and Introduction
This Action Plan is the 2004/2005 annual update to the City’s Consolidated Plan for the Period
July 1, 2000 to June 30, 2005. It describes the eligible pro~ams, projects and activities the City
plans to undertake with funds that are expected to be available during the 2004/05 fiscal year.
The Consolidated Plan is a five-year planning document that describes local conditions and
resources, identifies priority housing, human service, and community development needs, and
outlines a strategy and plan to address the idemified needs. The Consolidated Plan and the
annual Action Plan updates are submitted to the U.S. Department of Housing and Urban
Development (HUD) to enable the City of Palo Alto to receive and administer federal funds
under the Community Development Block Grant (CDBG) program.
The Consolidated Plan is meant to serve as a guide to insure that federal funds are directed
toward the most urgent community needs, and that fimding decisions are consistent with locally
identified priorities and strategies. The Action Plan describes how the activities to be undertaken
with CDBG funds in 2004/2005 will meet the long-term goals and objectives outlined in the
Consolidated Plan. The Action Plan also identifies the actions the City will undertake to
affirmatively further fair housing choice.
Public Review and Public Hearings
HUD regulations require that the Draft Action Plan be available for a 30-day public review and
comment period. The review and comment period for the 2004/05 Action Plan was from March
22, 2004 to April 22, 2004. Interested citizens were invited to comment on the Draft Action Plan
at either of the public hearings on April 6, 2004 and May 3, 2004, or by submitting written
comments by April 22, 2004 to the City of Palo Alto, CDBG Coordinator in the Department of
Planning and Community Environment, at 250 Hamilton Avenue, Palo Alto, CA 94301.
Citizen Participation
The City of Palo Alto has an adopted Citizen Participation Plan that provides for a nine-member
CDBG Citizens Advisory Committee (CAC). The CAC process encourages public participation
in the CDBG allocation and evaluation review process. Fiscal year 2004-2005 is the second year
of a two-year funding cycle, therefore the CAC met only on January 15 and 29, 2004 to make
final funding recommendations. During 2003, the CAC met on nine separate occasions to
review and evaluate the applications, interview the applicant agencies, review the Consolidated
Plan priorities, and make funding recommendations on the applications submitted for 2003/04
CDBG funding and preliminary recommendations for applications submitted for 2004/05 CDBG
funding. In addition, the CAC met for two special meetings in January 2003 to tour many of the
Draft 2004-2005 Action Plan
agencies that submitted funding applications, including those that submitted applications for
fiscal year 2004/05.
Draft 2004-2005 Action Plan
EXECUTIVE SUMMARY OF THE CONSOLIDATED PLAN
The City of Palo Alto is a suburban California City situated on the northern border of Santa
Clara County in the heart of Silicon Valley. The City is known for its association with the world
famous educational and research institution of Stanford University, a major center for medical
care and research. Palo Alto is also a center of international culture, art, shopping and food.
Palo Alto has a resident population of approximately 58,600 people. According to 2000 census
data, the Citywide breakdown by race is as follows: White 76%, Asian 17%, Black 2%, Other or
Two or More Races 5%. Palo Alto is, overall, a very affluent community. In 2000, only 4.8% of
the population was below the poverty level. The 2004 median income for a family of four in
Santa Clara County is $105,500, one of the highest in the nation.
There is a greater demand for housing in Palo Alto than can be met. This is because Palo Alto is
a desirable place to live, there is an intense demand for available units, and there is very little
land available for new housing development. Developers of affordable housing projects must,
therefore, compete with developers of market rate housing for the limited land available. The
ratio of jobs to housing is another factor. Although there has been a downturn in the economy,
the City still contains about 9.1% of all the County’s jobs and only 3.5% of its population,
according to the City of Palo Alto Housing Element Technical Document 1999-2006.
The City of Palo Alto’s Consolidated Plan and Housing Element both emphasize the great need
for affordable housing for low and very low-income households in Palo Alto. While all types of
housing are needed in the City, the Consolidated Plan focuses on the creation and preservation of
rental housing with an emphasis on housing for very low- and low-income persons especially
those who are homeless, at-risk of becoming homeless, those with special needs, and families
with children.
The main housing goal for the five-year Consolidated Plan is to increase the supply of affordable
rental housing by 125 units. It is a high priority to increase the number of units suitable for
families with children. CDBG funds will be targeted to very low- and low-income renters,
especially families with children, homeless individuals and those "at-risk" of becoming
homeless, persons with special needs, and elderly persons. The need to preserve the existing
affordable rental housing stock is an important ongoing objective. A high priority is also placed
on providing housing with supportive services for persons with special needs such as the frail
elderly, and those with developmental, physical and mental disabilities.
The Santa Clara County Collaborative on Housing and Homelessness has adopted a countywide
Continuum of Care strategy and approach to the problems ofhomelessness. By identifying gaps
in services on a regional basis, the needs of persons who are homeless or are at-risk of becoming
homeless can be more effectively addressed. The City-of Palo Alto participates in the
Collaborative and has identified as a high priority need, the provision of additional resources in
northern Santa Clara County for homeless services and supportive housing. Specifically, a
facility is needed for the provision of services such as showers, laundry, counseling, information
and referral, respite, and case-management. Additionally, more units of transitional and
permanent housing are needed for this population.
4
Draft 2004-2005 Action Plan
Priorities for non-housing community development needs are to:
1.Expand, modernize, rehabilitate and make seismic and other safety related
improvements to facilities that serve low-income and special needs populations
2.Support the accessibility of all services and facilities for persons with disabilities
3.Support the creation of an indoor Day Center facility for the provision of supportive
services for homeless persons (together with a housing component)
4. Support organizations that provide a variety of human services to low-income, at-risk
populations
5.Provide assistance and supportive services to low- and very-low income Palo Alto
residents to keep them from becoming homeless
Draft 2004-2005 Action Plan
RESOURCES AVAILABLE
The City of Palo Alto encourages local non-profit housing and public service agencies to pursue
all available public and private funding sources in order to achieve the goals of the Consolidated
Plan. Most projects and activities secure funding from a variety of sources including private
donations, charitable foundations, and church and community fundraising to leverage federal,
state and local funding.
Federal Resources
Community Development Block Grant (CDBG) Funds
The City receives CDBG funds as an entitlement grant through the U.S. Department of Housing
and Urban Development (HUD). In fiscal year 2004/05, the City will allocate $929,440 in
CDBG funds to eligible activities that address the needs identified in the Consolidated Plan. The
amount of the City’s 2004/05 CDBG entitlement grant from HUD is estimated to be $816,000,
estimated program income is $44,000 and reallocated funds total $11,540. Program income is
income directly generated from the use of CDBG funds that is returned to the CDBG program
and reallocated to new activities.
Estimated FY 2004/05 CDBG Entitlement Grant $816,000
Pro~am Income:
Estimated Program Income 2004/05 (HIP)
Estimated Program Income 2004/05 (PAHC)
Excess Prior Year Program Income
34,000
10,000
57,900
Reallocated Funds:
Miscellaneous Reallocations 11.540
TOTAL ALLOCATION $929,440
Loan repayments from the City’s former Housing Improvement Program (HIP) single-family
rehabilitation loan program are estimated to be $34,000 for next year. Income from the Palo
Alto Housing Corporation (PAHC) is also estimated to be $10,000 for next year. PAHC funds
are collected when rental income exceeds expenses on properties acquired or rehabilitated with
CDBG funds. Prior year program income funds are funds received in prior years that were in
excess of the estimated program income amounts, and were not previously allocated to projects.
HOME Program
The City of Palo Alto is not an entitlement grantee under the federal HOME program and thus
does not receive a direct grant of HOME Program funds from HUD. The only way.to access
HOME funds for housing projects located within the City of Palo Alto is for the City, or eligible
nonprofit organizations to apply to the State of California for the funds in an annual competition.
Due to excessive demand for the State’s HOME allocation, and rating criteria that does not favor
areas like Palo Alto, it is difficult to secure an award. In the past, the State has limited the
Draft 2004-2005 Action Plan
maximum HOME award per project to one million dollars. When a Notice of Funding
Availability (NOFA) is published, the City evaluates all potentially suitable projects to determine
whether or not to apply for a HOME grant.
Low Income Housing Tax Credit Progr. am
The Palo Alto Housing Corporation applied for and received an award of $4.5 million in State
Multifamily Housing Program (MHP) funds in the first round of 2003 funding. They combined
the MHP funds with an award of the 4% tax housing credits (providing $5.6 million in equity)
and tax-exempt bond financing for construction and permanent debt (a $2.3 million, 30-year
loan) through the California Housing Finance Agency (Cal HFA). Construction begun in
September 2003 and completion is scheduled for Spring 2005.
State, Local and Other Resources
City Affordable Housing Fund (formerl,~ the Housing Reserve)
The Affordable Housing Fund is a local housing trust fund established by the City Council to
provide financial assistance for the development, acquisition and rehabilitation of housing
affordable to extremely low, very low, low and moderate-income households. The Affordable
Housing Fund is the umbrella name for five distinct sub-funds for affordable housing. The two
primary local housing trust funds were formerly "known as the Housing Reserve Fund, but on
October 27, 2003, the City Council approved new guidelines for all of the City’s affordable
housing funds including the ones composed of federal housing monies; the funds were renamed
as part of those changes. The Affordable Housing Fund is now composed of:
Commercial Housing Fund -this fund is used primarily to increase the number of new
affordable housing units for Palo Alto’s work force. It is funded with mitigation fees
required from developers of commercial and industrial projects. As of December 31, 2003,
the Commercial Fund had an available balance of approximately $1,100,000.
Residential Housing Fund - this fund can be used for acquisition, rehabilitation, new
construction and predevelopment of low-income housing. It is funded with mitigation fees
provided under Palo Alto’s Below Market Rate (BMR) housing program from residential
developers, and money from other miscellaneous sources, such as proceeds from the sale or
lease of City property. It is also used to pay for administration and consultant contracts
necessary to carry out the BMR program. As of December 31, 2003, the Residential Fund
had an available balance of approximately $1,200,000.
CDBG Housing Fund - The purpose of the CDBG Housing Fund is to have funds available
on an ongoing basis to utilize when necessary to facilitate the development, rehabilitation and
preservation of low- income housing. Housing development opportunities, especially
opportunities to acquire land for new housing construction, may come up at any time
throughout the year and, due to the nature of the real estate market, a quick response is
frequently necessary. CDBG Housing Funds may be used to pay for costs associated with
the investigation of the feasibility of sites or properties for potential acquisition by the City,
or nonprofit organizations, for affordable housing. These costs usually need to be paid prior
Draft 2004-2005 Action Plan
to a project being officially created in the budget. Typically these costs are for appraisals,
environmental studies and soil testing, title reports and conceptual design studies.
HOME Program Income Fund - the City has only one HOME funded project, the Barker
Hotel Single Room Occupancy. This project was funded in part with a $1 million 1992
HOME grant from the State. The City’s funding is in the form a long-term, deferred loan
and there has not been any program income from that loan.
Below Market Rate (BMR) Emergency Fund - This fund was authorized by Council in
September 2002 in order to provide funding on an ongoing basis for loans to BMR owners
for special assessment loans and for rehabilitation and preservation of the City’s stock of
BMR ownership units.
The actual process for initiating an application for City Affordable Housing Funds will vary
depending on the particular circumstances. Usually, a nonprofit sponsor will apply to the
Department of Planning and Community Environment for housing subsidy funds when they are
in negotiation for a particular site. At other times, the City may issue a Request for Proposal
once it has secured or identified a potential housing site.
The Planning Department will present recommendations for each project together with a
proposed funding package to the City Council for approval. In almost all cases, funds will be
provided as a loan secured by the property. The repayment terms and interest rate have to be
tailored to the particular project since affordable housing typically is financed from multiple
sources with specific requirements.
Housin~ Trust of Santa Clara County (HTSCC)
The HTSCC is a public/private initiative, dedicated to creating more affordable housing in Santa
Clara County, using a revolving loan fund and grant-making program to complement and
leverage other housing resources. The City of Palo Alto contributed $500,000 toward the initial
$20 million investment capitalization. The Palo Alto Housing Corporation received a $400,000
award of funds for the Oak Court family rental project. In addition, the Opportunity Center
received $500,000 from the HTSCC. The Housing Trust received a $2 M award in February
2003 from the State, in the same competition as the City, under the State’s Proposition 46
Housing Trust Fund Grant Program.
Multifamilv Housing Pro~am (MHP)
The Multifamily Housing Progam (MHP) is a relatively new source of funding for affordable
housing as a result of the passage of Proposition 46 in November 2002. The purpose of this
program is to provide low-interest loans to developers of affordable housing. The MHP General
funds may be used for multifamily rental and transitional housing projects involving new
construction, rehabilitation, or conversion of nonresidential structures. MHP Supportive
Housing fi.mds may be used for multifamily rental housing projects involving new construction,
rehabilitation, acquisition and rehabilitation, or conversion of nonresidential structures for
permanent rental housing only. Palo Alto Housing Corporation and applied for and received
MHP funds in the amount of $4,555,064 in the first round of funding. In addition, Community
Draft 2004-2005 Action Plan
Working Group/Housing Authority of Santa Clara County (Opportunity Center) applied for and
received funds in the amount of $7.5 million in February 2004.
Multifamilv Housin.~ Pro~am (MHP) Local Housing Trust Funds
Another component of Proposition 46, the housing bond approved by voters in November 2002,
is funding for new and existing local housing trust funds. A local housing mast fund is a public
or private partnership created to receive on-going revenues for affordable housing production.
Local revenues supporting the fund can include commercial impact fees, ongoing fundraising, or
local taxes such as Transient Occupancy Tax, as well as local government’s general funds. The
City of Palo Alto applied for a grant from the State in November 2003. The State announced in
February 2004 that Palo Alto was receiving an award of $1,000,000. The City’s $1million award
will be used to help subsidize a furore rental housing project, either new construction or
acquisition and rehabilitation, to be determined in the next two years by the City Council.
Santa Clara County Affordable Housing Fund (AHF)
The Santa Clara County Board of Supervisors created the Office of Affordable Housing in July
2002 and established a set-aside of $18.6 million for projects. One of the objectives for this fund
is to leverage funding to affordable housing projects. The Community Working Group
(OppormnityCenter) received one of five awards from the available allocation of $7.7 million in
the first round of funding. They received a $2 million dollar award in September 2003.
Draft 2004-2005 Action Plan
STATE, LOCAL, PUBLIC AND PRIVATE RESOURCES FOR AFFORDABLE
HOUSING
Activity Acquisition
STATE, LOCAL, and PUBLIC
Commercial Housing
Fund
Residential Housing X
Fund
State MHP X
City Owned Land
MCC Program
Housing Bond Trust X
Housing Trust of X
Santa Clara County
Santa Clara County X
Housing Authority -
Section 8
County Department of
Social Services
Santa Clara County X
Affordable Housing
Fund
PRIVATE RESOURCES
BMR Rental & Owner
Pro~am
Private Lenders: AH]?X
i Nonprofit Developers X
Private Foundations
and Churches
Rehab New
Construction
Home
Buyer
Assistance
Rental
Assistance
X
X
X
X
X
Homeless
Assistance
Homeless
Prevention
X
X
X
X
X
X
X
X
X X
X
X
X
X
X
X
X
X
X
X X
X
X
X
X
X
X
X
X
X
X
X
Leveraging and Matching Requirements
The City of Palo Alto will leverage federal and private housing funds to the greatest extent
feasible consistent with the goals identified. The City will encourage housing project sponsors to
seek private financing and private grants, and to fully utilize other state and federal housing
development subsidies such as the low-income housing tax credit program. The City will also
utilize its local Affordable Housing Fund, as appropriaie, to leverage federal and private housing
funds and to provide any required matching funds. Where eligible, CDBG Housing Funds could
be used as a portion of the matching requirement for federal housing programs.
10
Draft 2004-2005 Action Plan
Geographic Distribution
The Map attached to this report shows the location of all the proposed activities for fiscal year
2004/05. The City considers the provision of all types of housing assistance on a citywide basis
consistent with the policies of the Comprehensive Plan. The City does not have specific target
areas for housing activities, but attempts to provide housing affordable to lower-income persons
throughout the City.
Census tract 5107 in the Olive-West Meadow/Ventura area is an area of considerably greater
population and housing diversity than that which is found in most parts of Palo Alto. Although
there are no areas within the City that are considered areas of minority concentration, the 2000
census identified this tract as having the highest minority concentration of any non-split City
tract. More than half the housing units are in multiple-unit (3+) structures, and nearly two-thirds
are renter-occupied. Block Group 2 has a large proportion of modest rental housing, a relatively
high proportion of minority and ethnic groups, and 48.6% of the households are below the
CDBG income eligibility limits. The entire tract is above HUD’s first quartile threshold of 27.08
percent for area benefit activities.
Specific efforts have been coordinated in the City’s Community Service and Police Departments
to focus on activities and services in the Ventura neighborhood. A number of City-sponsored
programs and activities serving low- and very low-income persons have either been undertaken
or proposed. A police substation was opened in the area with the goal of improving contact with
the community.
Changes to Strategy
HUD has informed the City of Palo Alto of a change of policy relating to the timely expenditure
of CDBG funds. The federal regulatory standard is that no more than 1.5 times a jurisdiction’s
annual entitlement grant amount may remain in its letter of credit 60 days prior to the end of the
program year. HUD now intends to employ monetary sanctions against jurisdictions that exceed
the regulatory standard. Failure to meet the expenditure standard by May 1, 2005 will cause
HUD to reduce the City’s next grant by 100% of the amount in excess of 1.5 times the annual
grant.
For this reason, all funding allocations for 2004/05 were scrutinized to insure the readiness of the
program or project to move forward and expend funds in a timely manner.
This stricter enforcement of the expenditure standard will increase the difficulty in providing
funds for affordable housing since housing projects involving new construction or acquisition of
apartments typically take more time and planning and are subject to more delays than other
capital projects. It may create situations where lower l~riority activities will be undertaken
instead of higher priority activities simply because they are easier to accomplish and ready to
proceed.
The City Council approved the change to a two-year CDBG funding cycle beginning with the
2003/04 fiscal year and this is reflected in the amendment of the Citizen Participation Plan
11
Draft 2004-2005 Action Plan
adopted by the City Council in December 2002. Many cities in the Bay Area have adopted
extended CDBG funding cycles and find them to be an effective tool to streamline "process" and
provide administrative relief to both city and non-profit staff. Palo Alto’s Human Services
Division adopted a two-year funding cycle for the Human Resource Allocation Process
(HSRAP) in fiscal years 2001/02 and 2002/03. Their experience was positive and they
continued the two-year funding cycle for the period 2003/04 through 2004/05.
Coordination of the CDBG and HSRAP funding processes is essential to the effective delivery of
local human service funding. Collaboration between the non-profit agencies and the City’s
funding sources avoids confusion, duplication of effort, and ensures that the highest identified
community needs are met. The two-year process provides the opportunity for City and non-
profit staffto undertake longer-term strategic planning and to maximize available funding
resources.
2004/2005 PROJECTS AND ACTIVITIES TO BE UNDERTAKEN
All of the projects and activities to be undertaken with the 2004/2005 CDBG cycle funding
allocation address the priority housing and community development needs identified in the
Consolidated Plan. The attached Part III "Proposed Projects" describes on the required HUD
forms each project or service activity, the 2004/05 funds allocated, the expected project
beneficiaries, and the HUD national objective.
Housing Activities
City of Palo Alto Housing Strategy
The Consolidated Plan proposes a five-year strategy to develop 125 newly constructed rental
units over the 2000-2005 planning period. The 125 units would be affordable to households in
the very low- or low-income categories and would meet a portion of the housing production
goals mandated by the Association of Bay Area Governments (ABAG). For this fiscal year, the
Palo Alto City Council adopted the creation of new affordable rental housing as one of their top
five priorities.
The City has made significant progress on the first housing project that is part of the 2000-2005
Consolidated Plan strategy. The Community Working Group (CWG) is the sponsor and joint
developer (with the Housing Authority of Santa Clara County) of the Opportunity Center for
homeless individuals and families. The Opportunity Center will provide emergency and day
services for the homeless and at-risk population including showers, laundry, lockers, clothing
closet, food, information and referral, social services and case management. Above the ground
floor services center, 89 units of transitional and permg.nent housing for singles and families will
be constructed. The Housing Authority of the County of Santa Clara will act as the developer of
the housing and InnVision (an experienced shelter and service provider) will be the operator of
the service center. This mixed-use facility will house existing homeless and emergency services
that are now being provided in inadequate and scattered locations in Palo Alto and the
surrounding area.
12
Draft 2004-2005 Action Plan
In order to resolve the site control issues and provide the developer capacity to implement this
high priority, but extremely complex project in a timely manner, CWG agreed that the Housing
Authority would take the lead role as developer. CWG has assigned the Palo Alto CDBG funds
to the Housing Authority and the Housing Authority has agreed to utilize its eminent domain
authority, if necessary, to remove the title issues and secure ownership of the entire site. The
Housing Authority will be the applicant and administrator for the complex mix of loans, ~ants
and tax credit financing that must be assembled to construct this $23 million dollar facility.
In fiscal year 2001/02, $480,000 in CDBG funding was allocated to this project. An additional
$800,000 in CDBG funds was allocated in 2002/03 for predevelopment, relocation and
acquisition costs. The total City CDBG funding for the Opportunity Center was $1,280,000. In
addition, $750,000 was allocated from the City Housing Development fund in fiscal year
2003/04 for construction costs. CWG and the Housing Authority have secured a number of new
funding sources in fiscal year 2003/04, including Multifamily Housing Pro~am funds, Santa
Clara County Office of Affordable Housing funds, and Low Income Housing Tax Credits.
Construction is scheduled to begin in late spring 2004, and the construction period will last 18
months. The ~and opening for the Center is projected for December of 2005.
CDBG Housin.~ Development Fund - $480,485
On May 13, 2002, the City Council allocated $1,000,000 from the CDBG Housing Development
Fund for a portion of the site acquisition costs for a new affordable rental housing project. This
was accomplished by the commitment of furore years CDBG funds, i.e. FY02/03, 03/04 and
04/05. HUD regulations permit allocations from future year’s funding if the request precedes the
expenditure and the action has been noticed and identified in the Consolidated Plan or Action
Plan updates. For example, if the site were acquired in FY02/03, CDBG funds could be loaned
from the General Fund and paid back from the balance in the CDBG Housing Development
Fund and from future CDBG allocations. The City Council allocated $118,500 of FY02/03
funds with the balance of $881,500 funds to be split between FY03/04 and 04/05.
The site of the future project was not yet identified but since an acre of land in Palo Alto
typically costs $3 to $5 million an acre, it was anticipated that a commitment of all of the.City’s
Commercial and Residential Housing funds together with $1,000,000 of CDBG funds would be
needed to secure a site. In July 2002, the City selected Eden Housing Inc. to evaluate the
feasibility of sites identified in the Housing Element of the Consolidated Plan and to secure
control of an appropriate site.
Due to the len~hy process of site analysis and negotiation for purchase, and HUD’s new
requirements for timely expenditure of funds, staff recommended a modification of the May
2002 action to allocate future CDBG Housing Development funds: $100,000 in FY03/04 for pre-
development costs for a site yet to be confirmed and $480,485 in FY04/05 for site acquisition. If
a site has not been identified in FY 04/05, the funds will be reallocated to another project. One
alternative is to provide funding if needed for the construction of the Opportunity Center’s
services facility for site clean-up or another eligible activity related to the Opportunity Center.
13
Draft 2004-2005 Action Plan
Palo Alto Senior Housinm Inc. (Stevenson House) - $38,260
Stevenson House is a 120-unit residential facility for low-income seniors located at 455 E.
Charleston Road in Palo Alto. The facility presently serves 134 very-low income elderly
residents with an average age of 79 years old. The facility is 35 years old and in need of
continuing maintenance and upgrades to maintain its viability as senior housing. Stevenson
House is unable to recover the costs of major repairs through rental increases if they are to keep
the rents affordable. This proposal is to repair and upgrade the hot water piping system that is
located on the roof of the facility. The pipes are deteriorated and cause Stevenson House to
make frequent temporary repairs to the system. The rehabilitation of existing lower-income
rental housing is a high priority in the Consolidated Plan.
Community Housing Inc.. (Lytton Gardens) - $109,695
Community Housing Inc. owns and operates Lytton Gardens I and II, which provide 318 units of
affordable housing and multi-level care to low-income seniors. This proposal is to renovate 49
-kitchens in their assisted facility. A modem mini kitchen that will be easier to use by frail and
elderly residents will replace the existing galley kitchens of 1974 that do not comply with the
Americans with Disabilities Act.
CDBG
Proposed Public Service Activities
public service funds will be targeted to the following programs in fiscal year 2004/05:
¢" $ 7,650 to Emergency Housing Consortium - Emergency Shelter
¢" $22,300 to Palo Alto Housing Corporation - SRO Tenant Counseling Program
" $20,900 to Clara-Mateo Alliance - Elsa Segovia Center for Homeless Families
¢" $25,000 to Clara-Mateo Alliance - Shelter/Transitional Housing for Individuals
,/" $19,000 to Shelter Network - Haven Family House Family Transitional Housing
,," $19,100 to Urban Ministry - Homeless Day Center and Services
¯ / $ 9,500 to St. Vincent de Paul - St. Joseph the Worker Program
¢" $ 5,550 to Catholic Charities - Long-Term Care Ombudsman Program
Human Services
In addition to the CDBG public service funds, the City will provide $1,278,853 from the General
Fund in support of human services through its Human Service Resource Allocation Process
(HSRAP). The HSRAP funds, in conjunction with the CDBG public service funds, are
distributed to local non-profit agencies whose programs serve the needs of seniors, children,
youth and families, persons with disabilities, and those who are homeless, or at risk of
homelessness. A variety of supported programs provide mental and physical health care
services, tenant/landlord mediation, subsidized child care, support for victims of domestic
14
Draft 2004-2005 Action Plan
violence and rape, senior services, adolescent counseling, emergency food, nutritional services,
and recreational activities.
Services and Resources Targeted to Homeless Persons
The following services for persons in the Palo Alto community who are very low-income,
homeless, or at-risk of becoming homeless, are provided with supplemental funding from the
City of Palo Alto either with CDBG or HSRAP funding. The goal of all the services listed is to
prevent homelessness, help move people out of homelessness and to reduce the number of
persons below the poverty line.
Alliance for Community Care: Mental health outreach and service linkage for Palo Alto’s adult
homeless population. A casework counselor works in the Palo Alto area to help low-income,
disabled adults access existing mental health and other community resources.
Ci_ty of Palo Alto Seasonal Jobs Pro,.~am: Designates several temporary, seasonal employment
oppommities in various City of Palo Alto Departments, for persons who are homeless and
unemployed. The pro~am is targeted to individuals who are motivated to improve their
situations and re-enter the work force.
Clara-Mateo Alliance Shelter: Shelter and transitional housing with casework counseling and
supportive services for homeless individuals, couples and families who are actively working
toward achieving their goals and overcoming homelessness.
Communi _ty Technolo~ov Alliance: Shelter hotline and voicemail services for homeless
individuals and families. The voicemail service helps case-managed clients attain individual
goals such as securing health care, housing or employment. A countywide housing information
and referral website was developed and is maintained to assist service providers and housing
seekers.
Elsa Se~oovia Day Center for Homeless Women and Children: Day centdr and supportive
services including child care, health care, employment counseling, clothing and respite for
homeless families with children.
Emer~oencv Housin~ Consortium: Shelter and supportive services to homeless persons at the
National Guard Armory in Sunnyvale, the San Jose Reception Center, and other transitional
housing pro~ams in Santa Clara County operated by the agency. Supportive services include
meals, childcare, health care, information and referral, and job and life-skills training.
Shelter Network - Haven Family House: Transitional housing with supportive services in Menlo
Park for previously homeless families with children. The newly renovated facility includes
individual apartments and an on-site licensed childcare center.
15
Draft 2004-2005 Action Plan
La Comida de California: Provision of affordable, nutritious meals to Palo Alto’s elderly
population at various locations throughout the City, including: Avenidas Senior Center,
Stevenson House and Cubberley Community Center.
Masrfield Community Clinic: Basic primary health care services and health education and
referral services to uninsured low-income and homeless individuals from the Palo Alto area.
Palo Alto Housing Corporation- SRO Hotel Tenant Counseling: Counseling and case-
management services for the low-income residents and prospective residents of single room
occupancy hotels in Palo Alto including the Barker Hotel at 439 Emerson Street. Many SRO
hotel residents have a history of homelessness and special needs. The program plays a vital role
in helping the residents maintain their stability and housing.
Second Harvest Food Bank: Distributes supplemental groceries and food services to very low-
income seniors and people with disabilities through the Operation Brown Bag Program.
Groceries are distributed weekly at the Ventura School site to income eligible participants.
Social Advocates for Youth: Crisis intervention, counseling and short-term shelter and crisis
resolution treatment services for at-risk youth who are beyond parental control, or have run
away, or who are homeless. The youth shelter is located in Mountain View.
Support Network for Battered Women: Emergency shelter and supportive services for victims of
domestic violence, primarily battered women and their children. Supportive services include
food, transportation, counseling, and legal services. Victims often must deal with issues of
homelessness in the context of a violent domestic situation.
Urban Ministry ofPalo Alto/InnVision: Services for very-low income or homeless persons
including bagged groceries, hot meals, emergency shelter, information and referral, case-
management and money management (payee) programs. The Urban Ministry staffs the outdoor
morning drop-in center located behind the Red Cross building at 400 Mitchell Lane. Bagged
groceries are distributed daily at the Downtown Food Closet located at 425 Hamilton Avenue in
Palo Alto. The Urban Mini.stry has merged with InnVision, a very experienced provider of
services, emergency shelter and transitional housing.
St. Joseph the Worker Pro~am: The day worker program based in Mountain View helps low-
income job seekers connect with employers in a dignified professional atmosphere. Support
services and classes are also offered to help workers increase and improve their language and job
skills.
Catholic Charities Lon~ Term- Care Ombudsman Pro~am: Agency provides confidential
advocacy and complaint investigation services to the approximately 917 residents in Palo Alto’s
licensed long-term care facilities. Program beneficiaries are the frail, chronically ill, primarily
elderly residents in Palo Alto’s licensed skilled nursing and residential care facilities. Agency
staff and volunteers investigate complaints, including allegations of abuse and neglect, seek fair
resolution to problems, and promote residents’ rights for quality care and quality of life in the
long-term care setting.
16
Draft 2004-2005 Action Plan
Transition from Homelessness to Permanent Housing
Shelter Plus Care (S + C): The S + C program is administered through the Office of the Santa
Clara County Homeless Coordinator. It is a federal grant program that provides Section 8 rental
assistance to participating landlords on behalf of eligible tenants for a period of up to five years.
Extensive support services are a necessary and required component of the program that targets
people who are homeless and disabled. There are 10 housing units available for S + C clients in
Palo Alto.
The Barker Hotel: The Barker is owned and operated by the Palo Alto Housing Corporation
(PAHC), and has 25 units of permanent Single Room Occupancy (SRO) housing at rents
affordable to persons with incomes between 30% and 50% of the median income. Rents range
from $325 to $433 per month based on size and whether they have their own bathrooms. Five of
the Barker’s units are fully accessible by wheelchair users. Priority for occupancy is for persons
who are homeless (either unsheltered or sheltered), persons with disabilities, and persons with
extremely low-incomes. Three of the units are available with tenant based Section 8 subsidies
through the Shelter Plus Care program.
Alma Place: Alma Place is located at 753 Alma Street in Palo Alto, and is also owned and
operated by the Palo Alto Housing Corporation. The project, a 106-unit single room occupancy
resident hotel, is affordable to low- and very low-income persons due to the layering of subsidies
from City Housing Reserve funds, a private bank loan, an Affordable Housing Program (AHP)
Grant, and an award of low-income housing tax credits. The studio apartments rent for $375 to
$535 per month and are available to persons earning below 40% of the median income. Seven of
the units are available with tenant based Section 8 rental subsidies through the Shelter Plus Care
program.
Haven Family House: Shelter Network of San Mateo County owns and operates this transitional
housing facility for families with children located at 260 Van Buren Road in Menlo Park.
Families reside in one and two bedroom apartments for two to four months depending on their
individual case plans and situations. Comprehensive case management, support services, and
on-site licensed childcare, plus one year of follow-up counseling are available to help families
break the cycle ofhomelessness.
Analysis of Impediments to Fair Housing Choice
The City of Palo Alto completed an Analysis of Impediments to Fair Housing Choice on
February 6, 1996. That report identified a lack of housing options affordable to persons of low
and moderate income as the major impediment to housing choice. Housing discrimination was
also identified as an impediment, with cases based on familial status the most often reported.
However, the number of cases of discrimination against persons with physical and mental
disabilities has also been increasing.
17
Draf~ 2004-2005 Action Plan
The City of Palo Alto joined with other Santa Clara County entitlement jurisdictions to undertake
a countywide fair housing study that includes 2000 census data. The report .fell behind schedule
but was completed in January 2003. The study includes a demographic analysis, a lending
analysis, a review of government programs and policies, a survey of Santa Clara residents and
service organizations, an assessment of the delivery of fair housing services, and
recommendations for new strategies. The information from the study was incorporated in the
revisions to the Analysis of Impediments to Fair Housing Choice adopted by the City Council in
May 2003.
Palo Alto plans to undertake the following actions to foster and maintain affordable housing and
to address housing discrimination during the 2004/05 fiscal year:
Provide tenant/landlord counseling and mediation services for Palo Alto residents through
the Palo Alto Mediation Program (Project Sentinel).
Support the Countywide website that lists subsidized housing opportunities, wait lists and
vacancies.
Provide CDBG funding to the Housing Development Fund for the potential development of a
new affordable housing site in Palo Alto.
Continue to support the Human Relations Commission in their documentation and
investigation of hate crimes, and in their support of diversity, disability, and affordable
housing issues.
Continue to monitor the provision of fair housing services to ensure that adequate services
are being provided, and that services are provided cost effectively.
Work with the Santa Clara County CDBG entitlement cities in their effort to implement any
recommended improvements to the delivery of services on a regional basis.
Provide funding to Project Sentinel, funded by and selected jointly by the cities of Palo Alto,
Mountain View, and Sunnyvale to reduce discrimination in housing by:
a. Investigating cases of housing discrimination
b. Conducting consultations with persons who believe they have been discriminated
against
c. Maintaining a pool of trained testers for investigations and conducting training’s
d. Maintaining a panel of attorneys for referral and coordinating meetings for
participating attorneys
e.Running ads in the Palo Alto Weekly, San Jose Mercury News, and other media
outlets
f. Distributing fair housing brochures
g. Running public service announcements for local radio/TV broadcasts
h. Making educational presentations to the community
i.Monitoring and reporting on rental sites
j.Showing educational videos on housing discrimination on local cable TV
k.Organizing an event for National Fair Housing Month
18
Draft 2004-2005 Action Plan
Amendments to Plan
Prior to the submission of any substantial change in the proposed use of funds, citizens will be
provided reasonable notice of, and the opportunity to comment on, any proposed Action Plan
amendment(s).
Urgent Need Activities
In the event of a local, state or federal disaster declaration for areas within the boundaries of the
City of Palo Alto, the City reserves the right to use CDBG or other available federal fimds to
abate immediate and necessary hazards. Such funds may be used for staff efforts, loans, or
outright grants to affected parties, as approved by City Council and allowable under the pertinent
Federal Guidelines.
Monitoring of Activities
The City of Palo Alto follows the monitoring requirements for the use of Federal funds as
directed by HUD. 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. For activities funded by CDBG and HOME programs, an annual performance report is
completed based on HUD regulations and in accordance with HUD standards. The Consolidated
Annual Performance and Evaluation Report (CAPER) is available to the Citizens Advisory
Committee and the general public for comments during a 15-day review period. This report
identifies the actual dollars expended, the beneficiaries served, and the program goals achieved.
The City requires subrecipients of CDBG funds to submit semi-annual and annual performance
reports outlining the extent to which program goals have been achieved, and the number of
beneficiaries who have been served. Program performance is measured against the specific
program objectives outlined in the contract scope of services. Additionally, City staff will
monitor each subrecipient, as necessary, to insure compliance with all regulations governing
their administrative, financial, and programmatic operations, and to make sure the subrecipients
achieve their performance objectives within the prescribed schedule and budget.
Coordination
The CDBG entitlement cities (Palo Alto, Sunnyvale, Mountain View, Santa Clara, Cupertino,
Gilroy, Milpitas, San Jose), and the Urban County of Santa Clara continue to meet on a re~o~lar
schedule to discuss issues of mutual concern and to share information and strategies for
addressing affordable housing, homelessness, fair housing, and other issues of common concern. ’
The meetings have helped the participants better understand the County and nonprofit social
service structure within the County, and provide input into the development of the new Santa
Clara County Office of Affordable Housing and its operations.
The City of Palo Alto continues to collaborate with neighboring jurisdictions in both Santa Clara
and San Mateo County on issues relating to homelessness in northern Santa Clara County and
19
Draft 2004-2005 Action Plan
southern San Mateo County. The City actively participates in the Santa Clara County Housing
and Homeless Collaborative.
As a result of the Countywide Fair Housing Study, the cities of Palo Alto, Mountain View, and
Sunnyvale are jointly selected fair housing services from a single provider to serve the three
cities. In addition a CounWwide Fair Housing Taskforce has been formed and includes
representatives from entitlement jurisdictions, fair housing agencies, and other non-profit
organizations. A staff person from the City of Palo Alto is the representative for the North
County cities (MountainView, Palo Alto and Sunnyvale).
The Quality Housing and Work Responsibility Act of 1998 requires public housing authorities
(PHA’s) to develop and implement five-year plans that describe their long range goals and a
strategy for achieving the identified goals. These plans provide details about the PHA’s
operations, pro~am participants, pro~ams and services. The PHA is required to ensure that
their plan is consistent with any applicable Consolidated Plans for jurisdictions in which the
PHA is located. This new requirement allows for some collaborative discussions on the role of
the Santa Clara County Housing Authority in meeting the housing needs of low-income persons
in Palo Alto.
To ensure a coordinated approach to the City’s human service funding efforts, CDBG and
Human Services staff meet to review and discuss applications received through both the CDBG
and HSRAP processes. Additionally, a member of the Human Relations Commission serves on
the CDBG Citizens Advisory Committee to avoid duplication of effort and to assure
collaboration within Palo Alto.
20
APPENDIX A
Application For Federal Assistance
Forms 424
Application for
Federal Assistance
U.S. Department of Housing
and Urban Development
OMB Approval No.2501-0017 (exp. 03/31/2005)
1. Type of Submission
D Application
Not Applicable
r~ Preapplication
7. Applicant’s Legal Name
City of Palo Alto
9. Address (give city, county, State, and zip code)
A. Address:250 Hamilton Avenue
B. City:Palo Alto
C. County:Santa Clara County
D. State:CA
E. Zip Code:94301
11. Employer Identification Number (EIN) or SSN
94600038
13. Type of Application
"’] NewD Continuation D Renewal Revision
If Revision, enter appropriate letters in box(es) U U
A. Increase Amount B. Decrease Amount C. Increase Duration
D. Decrease Duration E. Other (Specify)
15. Catalog of Federal Domestic Assistance (CFDA) Number
114---
Title:Community Development Block Grant
Component Title:
17. Areas affected by Program (boroughs, cities, counties, States,
Indian Reservation, etc.)The City of Pato Alto, County of
Santa Clara, State of California
18a. Proposed Program start date
07/01/2004
2. Date Submitted
05/15/2004
3. Date and Time Received by HUD
18b. Proposed Program end date
06/30/2005
4. HUD Application Number
5. Existing Grant Number
B-03-MC-0.60020
6. Applicant Identification Number
8. Organizational Unit
Department of Planning and Community Environment
10. Name,title,telephone number,fax number, and e-mail of the person to be
contacted on matters involving this application (including area codes)
A. Name:Julie Caporgno
B. Title:Advance Planning Manager
C. Phone:(650) 329-2679
D. Fax:(650) 329-2154
E. E-mail:julie.caporgno@cityofpaloalto.org
12. Type of Applicant (enter appropriate letter in box) IC
A. State I. University or College
B. County J. Indian Tribe
C. Municipal
D. Township
E. Interstate
F. Intermunicipal
G. Special District
H. Independent School District
14. Name of Federal Agency
U.S. Department of Housing and Urban Development
16. Descriptive Title of Applicant’s Program
218
K. Tribally Designated Housing Entity (TDHE)
L. Individual
M. Profit Organization
N. Non-profit
O. Public Housing Authority
P. Other (Specify)
The City of Palo AIto’s Community Development Block Grant (CDBG) Program
for Fiscal Year 2004/2005.
19a. Congressional Districts of Applicant 19b. Congressional Districts of
14th Congressional District Program 14th
20. Estimated Funding: Applicant must complete the Funding Matrix on Page 2.
21. Is Application subject to review by State Executive Order 12372 Process?
A. Yes This preapplication/application was made available to the State Executive Order 12372 Process for review on: Date
B. No Program is not covered by E.O. 12372
Program has not been selected by State for review.
22. Is the Applicant delinquent on any Federal debt?IXI No
D "Yes," explain or attach an explanation.Yes If below
form HUD424 (01/2003)
Previous versions of HUD-424 and 424-M are obsolete Page 1 of 2 ref. OMB Circular A-102
Funding Matrix
The applicant must provide the funding matrix shown below, listing each program for which HUD funding is being
requested, and complete the certifications.
Grant Program*HUD
Share
CDBG 816,000
Grand Totals 816,000
Applicant
Match
Other HUD
Funds
Other Fedora
Share
State
Share
Local/Tribal
Share
o o
o o
Other
11,540"*
Program
Income
101,900
101,900
For FHIPs, show both initiative and component
**Reprogrammed Prior Year’s Funds
Total
929,440
929,440
Certifications
I certify, to the best of my knowledge and belief, that no Federal appropriated funds have been paid, or will be paid, by or on behalf
of the applicant, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of
Congress, an officer or employee of Congress, or an employee of a Member of Congress, in connection with the awarding
of this Federal grant or its extension, renewal, amendment or modification. If funds other than Fe~ieral appropriated funds have
or will be paid for influencing or attempting to influence the persons listed above, I shall complete and submit Standard Form-LLL,
Disclosure Form to Report Lobbying. 1 certify that I shall require all sub awards at all tiers (including sub-grants and contracts) to
similarly certify and disclose accordingly.
Federally recognized Indian Tribes and tribally designated housing entities (TDHEs) established by Federally-recognized Indian tribes
as a result of the exercise of the tribe’s sovereign power are excluded from coverage of the Byrd Amendment, but State-recognized Indian
tribes and TDHEs established under State law are not excluded from the statute’s coverage.
This application incorporates the Assurances and Certifications (HUD-424B) attached to this application or renews and incorporates for
the funding you are seeking the Assurances and Certifications currently on file with HUD. To the best of my knowledge and belief, all
information in this application is true and correct and constitutes material representation of fact upon which HUD may rely in awarding
the agreement.
23. Signature of Authorized Official Na~e (printed)
Frank Benest
Title Date (mm/dd/yyyy)
City Manager 05/14/2004
form HUD-424 (01/2003)
Previous versions of H U D-424 and 424-M are obsolete.Page 2 of 2 ref. OM B Circular A-102
Funding Sources
Entitlement Grant (includes reallocated funds)
CDBG
ESG
HOME
HOPWA
Total
$816,000
S0
S0
$0
$816,000
Prior Years’ Program Income NOT previously programmed or reported
CDBG $57,900
ESG $0
HOME $0
HOPWA $0
Total $57,900
Reprogrammed Prior Years’ Funds
CDBG
ESG
HOME
HOPWA
Total
$11,540
S0
S0
S0
$11,540
Total Estimated Program Income
Housing Improvement Program
Palo Alto Housing Corp.
Total
$34,000
$10,000
$44,000
Section 108 Loan Guarantee Fund $0
TOTAL FUNDING SOURCES $929,440
Other Funds $0
Submitted Proposed Projects Totals $929,440
Un-Submitted Proposed Projects Totals $0
APPENDIX B
Certifications
LOCAL GOVERNMENT CERTIFICATIONS
In accordance with the applicable statutes and the regulations governing the consolidated
plan regulations, the jurisdiction certifies that:
Affirmatively Further Fair Housing -- The jurisdiction will affirmatively further fair housing,
which means it will conduct an analysis of impediments to fair housing choice within the
jurisdiction, take appropriate actions to overcome the effects of any impediments
identified through that analysis, and maintain records reflecting that analysis and actions
in this regard.
Anti-displacement and Relocation Plan -- It will comply with the acquisition and relocation
requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970, as amended, and implementing regulations at 49 CFR 24; and it has in effect
and is following a residential antidisplacement and relocation assistance plan required
under section 104(d) of the Housing and Community Development Act of 1974, as
amended, in connection with any activity assisted with funding under the CDBG or HOME
programs.
Drug Free Workplace -- It will or will continue to provide a drug-free workplace by:
Publishing a statement notifying employees that the unlawful manufacture,
distribution, dispensing, possession, or use of a controlled substance is prohibited
in the grantee’s workplace and specifying the actions that will be taken against
employees for violation of such prohibition;
2. Establishing an ongoing drug-free awareness program to inform employees about
o
(a)
(b)
(c)
(d)
The dangers of drug abuse in the workplace;
The grantee’s policy of maintaining a drug-free workplace;
Any available drug counseling, rehabilitation, and employee assistance
programs; and
The penalties that may be imposed upon employees for drug abuse
violations occurring in the workplace;
Making it a requirement that each employee to be engaged in the performance of
the grant be given a copy of the statement required by paragraph 1 ;
Notifying the employee in the statement required by paragraph 1 that, as a
condition of employment under the grant, the employee will -
(a)Abide by the terms of the statement; and
(b)Notify the employer in writing of his or her conviction for a violation of a
criminal drug statute occurring in the workplace no later than five calendar
days after such conviction;
LOCALCERTS 10/00
o Notifying the agency in writing, within ten calendar days after receiving
notice under subparagraph 4(b) from an employee or otherwise receiving
actual notice of such conviction. Employers of convicted employees must
provide notice, including position title, to every grant officer or other
designee on whose grant activity the convicted employee was working,
unless the Federal agency has designated a central point for the receipt of
such notices. Notice shall include the identification number(s) of each
affected grant;
Taking one of the following actions, within 30 calendar days of receiving
notice under subparagraph 4(b), with respect to any employee who is so
convicted -
(a)Taking appropriate personnel action against such an employee, up to and
including termination, consistent with the requirements of the Rehabilitation
Act of 1973, as amended; or
(b)Requiring such employee to participate satisfactorily in a drug abuse
assistance or rehabilitation program approved for such purposes by a
Federal, State, or local health, law enforcement, or other appropriate
agency;
Making a good faith effort to continue to maintain a drug-free workplace through
implementation of paragraphs 1,2, 3, 4, 5 and 6.
Anti-Lobbying -- To the best of the jurisdiction’s knowledge and belief:
No Federal appropriated funds have been paid or will be paid, by or on behalf of it,
to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with the awarding of any
Federal contract, the making of any Federal grant, the making of any Federal loan,
the entering into of any cooperative agreement, and the extension, continuation,
renewal, amendment, or modification of any Federal contract, grant, loan, or
cooperative agreement;
If any funds other than Federal appropriated funds have been paid or will be paid
to any person for influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with this Federal contract, grant,
loan, or cooperative agreement, it will com.plete and submit Standard Form-LLL,
"Disclosure Form to Report Lobbying," in accordance with its instructions; and
o It will require that the language of paragraph 1 and 2 of this anti-lobbying
certification be included in the award documents for all subawards at all tiers
(including subcontracts, subgrants, and contracts under grants, loans, and
cooperative agreements) and that all subrecipients shall certify and disclose
LOCALCERTS 10/00
accordingly.
Authority of Jurisdiction -- The consolidated plan is authorized under State and local law
(as applicable) and the jurisdiction possesses the legal authority to carry out the programs
for which it is seeking funding, in accordance with applicable HUD regulations.
Consistency with plan -- The housing activities to be undertaken with CDBG, HOME,
ESG, and HOPWA funds are consistent with the strategic plan.
Section 3 -- It will comply with section 3 of the Housing and Urban Development Act of
1968, and implementing regulations at 24 CFR Part 135.
Signature/Authorized Official Date
City Manager
Title
LOCALCERTS 10/00
Specific CDBG Certifications
The Entitlement Community certifies that:
Citizen Participation -- It is in full compliance and following a detailed citizen participation
plan that satisfies the requirements of 24 CFR 91.105.
Community Development Plan -- Its consolidated housing and community development
plan identifies community development and housing needs and specifies both short-term
and long-term community development objectives that provide decent housing, expand
economic opportunities primarily for persons of low and moderate income. (See CFR 24
570.2 and CFR 24 part 570)
Following a Plan -- It is following a current consolidated plan (or Comprehensive Housing
Affordability Strategy) that has been approved by HUD.
Use of Funds -- It has complied with the following criteria:
Maximum Feasible Priority. With respect to activities expected to be assisted with
CDBG funds, it certifies that it has developed its Action Plan so as to give
maximum feasible priority to activities which benefit low and moderate income
families or aid in the prevention or elimination of slums or blight. The Action Plan
may also include activities which the grantee certifies are designed to meet other
community development needs having a particular urgency because existing
conditions pose a serious and immediate threat to the health or welfare of the
community, and other financial resources are not available);
Overall Benefit. The aggregate use of CDBG funds including section 108
guaranteed loans during program year(s) 2004-2005 , , (a
period specified by the grantee consisting of one, two, or three specific
consecutive program years), shall principally benefit persons of low and moderate
income in a manner that ensures that at least 70 percent of the amount is
expended for activities that benefit such persons during the designated period;
Special Assessments. It will not attempt to recover any capital costs of public
improvements assisted with CDBG funds including Section 108 loan guaranteed
funds by assessing any amount against properties owned and occupied by
persons of low and moderate income, including any fee charged or assessment
made as a condition of obtaining access to such public improvements.
However, if CDBG funds are used to pay the proportion of a fee or assessment
that relates to the capital costs of public iml:Jrovements (assisted in part with CDBG
funds) financed from other revenue sources, an assessment or charge may be
made against the property with respect to the public improvements financed by a
source other than CDBG funds.
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The jurisdiction will not attempt to recover any capital costs of public improvements
assisted with CDBG funds, including Section 108, unless CDBG funds are used to
pay the proportion of fee or assessment attributable to the capital costs of public
improvements financed from other revenue sources. In this case, an assessment
or charge may be made against the property with respect to the public
improvements financed by a source other than CDBG funds. Also, in the case of
properties owned and occupied by moderate-income (not low-income) families, an
assessment or charge may be made against the property for public improvements
financed by a source other than CDBG funds if the jurisdiction certifies that it lacks
CDBG funds to cover the assessment.
Excessive Force -- It has adopted and is enforcing:
A policy prohibiting the use of excessive force by law enforcement agencies within
its jurisdiction against any individuals engaged in non-violent civil rights
demonstrations; and
A policy of enforcing applicable State and local laws against physically barring
entrance to or exit from a facility or location which is the subject of such non-violent
civil rights demonstrations within its jurisdiction;
Compliance With Anti-discrimination laws -- The grant will be conducted and administered
in conformity with title Vl of the Civil Rights Act of 1964 (42 USC 2000d), the Fair Housing
Act (42 USC 3601-3619), and implementing regulations.
Lead-Based Paint -- Its activities concerning lead-based paint will comply with the
requirements of part 35, subparts A, B, J, K and R, of title 24;
Compliance with Laws -- It will comply with applicable laws.
Signature/Authorized Official Date
Title
City Manager
LOCALCERTS 10/00
OPTIONAL CERTIFICATION
CDBG
Submit the following certification only when one or more of the activities in the action
plan are designed to meet other community development needs having a particular
urgency as specified in 24 CFR 570.208(c):
The grantee hereby certifies that the Annual Plan includes one or more
specifically identified CDBG-assisted activities which are designed to meet other
community development needs having a particular urgency because existing
conditions pose a serious and immediate threat to the health or welfare of the
community and other financial resources are not available to meet such needs.
Signature/Authorized Official Date
Title
City Mana,qer
LOCALCERTS 10/00
APPENDIX TO CERTIFICATIONS
INSTRUCTIONS CONCERNING LOBBYING AND DRUG-FREE WORKPLACE
REQUIREMENTS:
Lobbying Certification
This certification is a material representation of fact upon which reliance
was placed when this transaction was made or entered into. Submission
of this certification is a prerequisite for making or entering into this
transaction imposed by section 1352, title 31, U.S. Code. Any person who
fails to file the required certification shall be subject to a civil penalty of not
less than $10,000 and not more than $100,000 for each such failure.
Druq-Free Workplace Certification
By signing and/or submitting this application or grant
agreement, the grantee is providing the certification.
The certification is a material representation of fact upon which
reliance is placed when the agency awards the grant. If it is later
determined that the grantee knowingly rendered a false
certification, or otherwise violates the requirements of the Drug-
Free Workplace Act, HUD, in addition to any other remedies
available to the Federal Government, may take action authorized
under the Drug-Free Workplace Act.
o For grantees other than individuals, Alternate I applies:
24 CFR 24.600(a)(1 ) A grantee, other than an individual
shall certify to the agency that it will provide a drug-free
workplace. (This is the information to which jurisdictions
certify).
°Workplaces under grants, for grantees other than
individuals, need not be identified on the certification. If
known, they may be identified in the grant application. If the
grantee does not identify the workplaces at the time of
application, or upon award, if there is no application, the
grantee must keep the identity of the workplace(s) on file in
its office and make the information available for Federal
inspection. Failure to identify all known workplaces
constitutes a violation of the granteg’s drug-free workplace
requirements.
LOCALCERTS 10/00
o
Place
Workplace identifications must include the actual address of
buildings (or parts of buildings) or other sites where work
under the grant takes place. Categorical descriptions may
be used (e.g., all vehicles of a mass transit authority or State
highway department while in operation, State employees in
each local unemployment office, performers in concert halls
or radio stations).
If the workplace identified to the agency changes during the
performance of the grant, the grantee shall inform the
agency of the change(s), if it previously identified the
workplaces in question (see paragraph five).
The grantee may insert in the space provided below the site(s) for the
performance of work done in connection with the specific grant:
of Performance (Street address, city, county, state, zip code)
City of Palo Alto
250 Hamilton Ave.
Palo Alto, Santa Clara County, CA 94301
Check __ if there are workplaces on file that are not identified here; The
certification with regard to the drug-free workplace required by 24 CFR part 24,
subpart F.
Definitions of terms in the Nonprocurement Suspension and
Debarment common rule and Drug-Free Workplace
common rule apply to this certification. Grantees’ attention
is called, in particular, to the following definitions from these
rules:
"Controlled substance" means a controlled substance in
Schedules I through V of the Controlled Substances Act (21
U.S.C.812) and as further defined by regulation (21 CFR
1308.11 through 1308.15);
"Conviction" means a finding of guilt (including a plea of nolo
contendere) or imposition of sentence, or both, by any
judicial body charged with the responsibility to determine
violations of the Federal or State criminal drug statutes;
"Criminal drug statute" means a Federal or non-Federal
criminal statute involving the manufacture, distribution,
dispensing, use, or possession of any controlled substance;
LOCALCERTS 10/00
"Employee" means the employee of a grantee directly
engaged in the performance of work under a grant,
including: (i) All "direct charge" employees; (ii) all "indirect
charge" employees unless their impact or involvement is
insignificant to the performance of the grant; and (iii)
temporary personnel and consultants who are directly
engaged in the performance of work under the grant and
who are on the grantee’s payroll. This definition does not
include workers not on the payroll of the grantee (e.g.,
volunteers, even if used to meet a matching requirement;
consultants or independent contractors not on the grantee’s
payroll; or employees of subrecipients or subcontractors in
covered workplaces).
LOCALCERTS 10/00
APPENDIX C
Proposed Projects
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APPEND IX D
Map
FY 2004 - 2005
CDBG Projects
Location Map!i
APPENDIX E
Letter from HUD
Honorable Bern Beecham
Mayor of the City of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
U.S. Department of Housing and Urban Development
Pacific/Hawaii
California State Office
450 Golden Gate Avenue
San Francisco, California 94102-3448
Dear Mayor Beecham:
Subject: Final Annual Community Assessment for the 2002 Fiscal Year
City of Palo Alto, California
We have completed our Annual Community Assessment (ACA) of the City of Palo
Alto’s performance in implementing.its FY 2002 Annual Action Plan objectives, based on
the City’s Five-year Consolidated Plan. The period covered by this.assessment is July 1,
2002 - June 30, 2003. As a result of this assessment, we have determined that the City
has the continuing capacity to implement and administer the Community Development
BlockGrant (CDBG) Program-and is in compliance with the statutes and regulations
governing the program.: This determination is based upon the information available.to
this office through the City’s Consolidated Annual Performance and Evaluation Report
and program performance data contained in HUD’s Integrated Distribution and
Information System (IDIS).
The lack of affordable housing is the number one priority need identified in the
City of Palo Alto’s five-year Consolidated Plan. The City has one of the most expensive
housing markets in the country, due in large part to the lack of land suitable for new
housing. We wish to commend the City of Palo Alto for its strong financial and political
support of affordable housing, as well as its successful collaboration with non-profit
organizations and other local government entities during FY 2002, which will generate
new affordable housing benefiting individuals and families who are low and moderate
income or homeless.
During this third year of its five-year Consolidated Plan, the City and its non-profit
partners continued to make progress in implementing two principal affordable housing
projects comprising143 units, namely The Oak Court Apartments and Opportunity
Center. The City’s efforts in overcoming major financing obstacles and moving these
projects forward, exemplify-its strong commitment to affordable housing. The City
anticipates .that it will exceed its 125-unit Consolidated Plan affordable housing goal-with
the.successful completion of both projects. ....
The Oak Court Apartments, a 53-unit family rental project secured a low income
housing tax credit allocation .in tandem with State Multifamily Housing Program’ (MHP)
financing, two highly competitive programs. Together with local tax-exempt bonds and a
$3 million contribution from the City’s Commercial Housing In-Lieu Fund, the project
reached the construction phase in September 2003, and is expected to be completed in
January 2005.
Opportunity Center will serve as a multi-service center for homeless adults and
families, combinedwith 89 units of permanent and transitional housing. According to the
City, approximately $12.8 million of the $18.6 million total development cost has already
been raised from the Counties of Santa Clara and San Mateo, including $7.5 million in
State MHP funds, $1.3 million in City CDBG funding (from multiple-years for site
acquisition and the center construction), as well as a $500,000 grant under HUD’s 2001
McKinney-Vento homeless assistance competition and private foundation capital funds.
Applications for low income housing tax credits and a tax-exempt bond allocation are
expected to be submitted in the next round, in order to secure the balance of
development financing.
Other notable actions in support of affordable housing included:
¯Rehabilitation of several emergency systems at the Stevenson House and Lytton
Gardens senior housing complexes, utilizing $115,000 in CDBG funds.
Establishment of an emergency loan fund funded from the Residential Housing In-
Lieu Fund to assist Below Market Rate (BMR) Program owners with special
assessments for capital repairs;
Adoption of an updated Housing Element in December 2002, and effective
through June 2006, describing strategies for meeting the City’s fair share of the
region’s housing needs for a variety of income groups;
Adoption of an updated Analysis of Impediments to Fair Housing Choice in May
2003, based on the findings of a Countywide fair housing study completed last
January; and
Additionally, in response to the housing study recommendation for increased
intergovernmental collaboration on fair housing issues, the Cities of Palo Alto, Mountain
View and Sunnyvale issued a joint Request for Proposals. As a result, a single fair
housing service provider was selected, in order to enhance cost effectiveness, as well as
the scope and quality of services in north Santa Clara County.
During FY 2002, the City continued to provide significant local support, i.e.,
$1,350,927 in addition to $134,700 in CDBG fundsl to support non-profit organizations to
deliver a variety of essential housing-related and community development public services
to approximately 9,700 lower income persons and .288 households. Beneficiaries
included persons with special needs, as well as homeless adults and families living in
shelters or transitional housing. All CDBG Program statutory requirements were met, in
terms of benefit to low and moderate-income persons, timeliness of expenditure of funds
and the 15% public service and 20% planning & administration caps.
We would be glad to work with City staff and also utilize our contracted technical
assistance providers to assist you regarding the City’s technical assistance needs. We
look forward to continuing to work in partnership with the City of Palo Alto, in order to
help the City continue to achieve its immediate and long-range affordable housing and
community development goals and objectives.
Sincerely,
Steven B. Sachs
Director, Community Planning
and Development Division
cc:Frank Benest
City Manager
Steve Emslie
Director, Department of Planning
and Community Environment
Julie Caporgno
Advance Planning Manager, Planning Division/DPCE
Eloiza Murillo-Garcia
CDBG Coordinator, PD/DPCE
Cathy Siegel
Housing Coordinator, PD/DPCE