HomeMy WebLinkAbout2003-04-01 City Council (3)City of Alto
City a:ager’s Report
TO:HONORABLE CITY COUNCIL
ATTENTION: FINANCE COMMITTEE
FROM:CITY MANAGER DEPARTM]~NT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:APRIL 1, 2003 CMR:198:03
SUBJECT:PROPOSED FISCAL YEAR 2003/05 COMMUNITY
DEVELOP~ENT 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 $924,519 in FY 2003/04 and an estimated
$835,000 in FY 2004/05 in Community Development Block Grant (CDBG) funds. The
draft Fiscal Year 2003/04 Action Plan includes the funding recommendations,
contingency recommendations, a commitment of future year’s CDBG funds for an
affordable housing project, and the start of a two-year funding cycle coordinated with the
Human Services Resource Allocation Process (HSRAP) beginning in fiscal year 2003/04.
CMR:198:03 Page 1 of 9
RECOMMENDATION
Staff and the CDBG Citizen’s Advisory Committee recommend that
Committee recommend to the City Council approval of the following:
the Finance
1.Allocate CDBG funding as recommended by staff in the final 2003/04 Action Plan
update to the Consolidated Plan for the period 2000 to 2005.
Commit future 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 2003/04.
3.Authorize staff to submit the 2003/04 Action Plan to the Department of Housing and
Urban Development (HUD) by the May 15, 2003 deadline.
Authorize the City Manager, on behalf of the City, to execute the 2003/04 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.
5. AlIocate Fiscal Year 2004/05 funding as recommended.
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 2003/04 Annual Action Plan update is
available for public review and comment during the period March 25 to April 25, 2003
(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 progam 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 goups. 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.
CMR:198:03 Page 2 of 9
CDBG Re,~ulations
The City of Palo Alto receives funds annually from HUD as an entitlement city under the
CDBG Program, authorized by Title I of the Housing and Community Development Act
of 1974 (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."
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 2003/04, the maximum available for public services is $127,650.
Public Service Cap Calculation:
2003/04 Entitlement Grant
Program Income - HIP 2002/03" (Est)
Program Income - PAHC 2002/03" (Est)
$791,000
$5O,OOO
$10.000
$851,000 x15%= $127,650
*Federal regulations require the public service and planning/administration caps to be
calculated on program income for different years.
2.Planning and Administration: This category may be used to reimburse for fair housing
activities, CDBG program management, oversight and coordination, environmental
reviews, 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 2003/04 funding is limited to
a maximum of $167,000.
CMR:198:03 Page 3 of 9
Planning/Administration Cap Calculation:
2003/04 Entitlement Grant (Est)
Program Income - HIP 2003/04" (Est)
Program Income - PAHC 2003/04" (Est)
$791,000
34,000
10.000
$835,000 x 20% = $167,000
*Federal regulations require the public service and planning/administration caps to be
calculated on program income for different years.
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 on October 16, 2002. A proposal writing workshop was conducted on
November 6, 2002 to assist applicants with progam regulations and project eligibility
questions. The completed applications were due December 13, 2002. The City received
18 applications for funding totaling $1,298,365 for FY 2003/04 and 14 applications for
funding totaling $1,060,891 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,
Mark Sabin and Heather Trossman Kushlan. Elsbeth Newfield was selected as the
Committee’s spokesperson. The Committee 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. In addition, the Committee toured local applicant sites
on two separate days
DISCUSSION
In addition to the annual funding allocations for the three primary CDBG program
activity areas, several new circumstances are addressed in this report.
CMR: 198:03 Page 4 of 9
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.
Organizations seeking funding in the second year of the two-year cycle submitted
FY04/05 applications on December 13, 2002. These were evaluated by the CDBG CAC
and staff. The Council is asked to review and approve tentative allocations for 2004/05.
The City Council will be required to adopt a 2004/05 Action Plan next year. At that time
the Council may adjust the tentative allocations.
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 progam
year. In an effort to reduce the backlog of unspent CDBG funds, HUD informed all
jurisdictions of a new policy to employ monetary sanctions a~ainst jurisdictions that
exceed the regulatory standard. Failure to meet the expenditure standard by May 1, 2004
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 to
insure the readiness of the program or project to move forward and expend funds in a
timely manner.
Commitment of Future 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 by
committing future years CDBG funds, i.e. FY 02/03, 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 FY 02/03, 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 FY 02/03 CDBG funds, leaving the balance of $881,500 to be split between
FY 03/04 and 04/05.
At the time the Council approved the allocation last year, 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 funding, 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 Comprehensive Plan and to
CMR: 198:03 Page 5 of 9
secure control of an appropriate site. Eden Housing is investigating several potential
housing sites all of which are proving to be challenging given the area’s high land costs.
Since a new housing site has not been determined, and given HUD’s new mandate for
timely expenditure of funds, staff recommends a modification of the May 13, 2002
Council action to allocate future CDBG Housing Development funds: reduce funding to
$100,000 in FY03/04 for pre-development costs for a site yet to be confirmed and retain
$500,000 in FY04/05 for site acquisition. In 2004/05, this allocation will be reviewed
and could possibly be reallocated. Commitment of additional future CDBG funding in
order to secure the total $1,000,000 may be sought in later years, if and when a site is
selected.
2003/04 Funds Available for Allocation
The total amount available for a!location this !003/04 $924,519. The City’s 2003/04
CDBG grant is $791,000, a 2.1 percent decrease over the prior year’s grant of $808,000.
$22,984 in funds remaining from previous projects are being reallocated to new projects.
Also included are $44,000 in program income (income generated directly from the use of
CDBG funds) expected to be received in 2003/04, plus $66,535 in program income
received in previous years in excess of the estimated amount.
In summary:
$791,000
22,984
34,000
10,000
66,535
$ 924,519
FY 2003/04 CDBG entitlement grant from HUD*
Reallocation of other previous funds
Estimated program income for 2003/04 from the City’s Housing
Improvement Program (HIP), a single-family residential
rehabilitation program that is no longer operational
Estimated program income for 2003/04 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 confirmed until the President has signed a budget
bill approved by the United States Congress.
Funding Recommendations - FY 03/04
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 actua! budget. Attachment A is a narrative explaining the funding requests and
funding recommendations in more detail.
CMR: 198:03 Page 6 of 9
FUNDING RECOMMENDATIONS*
APPLICANT AGENCY
2002/2003
FUNDING
2003/2004
FUNDING
REQUEST
CAC/ STAFF
RECOMMEN-
DATIONS
1.Catholic Charities
Long-Term Care Ombudsman
2.Emergency Housing Consortium
Palo Alto HOMES Program
3. Palo Alto Housing Corporation
SRO Resident Support Services
4. Shelter Network - Haven Family House
Transitional Housing for Homeless Families
5. Ctara-Mateo Alliance
Family Shelter & ServicesYElsa Segovia Center
6. Clara-Mateo Alliance
Single/Couple Shelter & Services
7. Urban Ministry
Homeless Drop-in Center
8. St. Vincent de Paul
PUBLIC SERVICES
8,490
24,745
20,000
22,000
28,750
20,715
10,000
8,700
10,500
44,720
20,000
22,000
28,750
40,000
15,000
Day Worker Center
Total Public Services (Cap $127,650)134,700 189,670
FAIR HOUSING/ADMINISTRATION
10. Fair Housing Services 25,800 26,800
11. City of Palo Alto 140,000 140,000
Program Administration
Total Administration (Cap $167,000)165.800 166,800
CAPITAL PROJECTS
5,550
7,650
22,300
19,000
20,900
25,000
17,750
9,500
127,650
26,800
140,000
166,800
12. Community Housing Inc.
Lytton Gardens Kitchen Renovation
13. Clara-Mateo Alliance
Kitchen & Elsa Segovia Rehab
14. Adolescent Counseling Services
Caravan House Rehab
15. Palo Alto Housing Corp. - Barker Hotel
Improvement Plan
16. Palo Alto Housing Corp. - Oak Manor Apts.
Water System Repairs
17. Economic and Social Opportunities
Housing and Energy Services Program
18. Stevenson House - Senior Housing
Safe Showers Pro~am
17. City of Palo Alto/Housing Development Fund
Pre-development of New Rental Housing
Project
Total Capital Projects (Cap $530,069)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
118,500
55,967.25
200,00
111,197
41,173
278,358
60,000
95,200
100,000
941,895.25
1,298,365.25
0
200,000
111,197
0
113,672
60,000
45,200
100,000
630,069
924,519
TOTAL
*Changes may be necessary if the amount of funding is increased or decreased when the President
signs the budget.
CMR: 198:03 Page 7 of 9
Funding Recommendations - FY 04/05
The amount of the City’s CDBG Allocation in FY04/05 is uncertain because of federal
budget fluctuations and because HUD is developing a new allocation formula that may be
applied nationwide by that time. HUD is analyzing the impact of the 2000 Census on the
distribution of CDBG funds to entitlement communities and states. Based on its review,
revisions to the existing formula may be proposed so that funds are allocated to those
communities that have the most need. In FY 2003/04, President Bush’s administration
had proposed that the annual allocation to communities .that have a per capita income of
more than two times the national average, including Palo Alto, be reduced by half.
President Bush’s proposal was not approved and is not part of the FY 2003/04 budget.
Based on these two factors, however, the tentative funding recommendations by the CAC
and staff assume that the City’s allocation will not increase.
Funding requests for public services were similar to those submitted in FY 2003/04 with
one exception. Urban Ministry/InnVision sought additional funding to accommodate
longer hours of operation in the future Opportunity Center. With no change in allocation
and a cap of 15% on public services, CAC and staff did not wish to cut the funding of
other organizations in order to increase the allocation for Urban Ministry/InnVision.
CAC and staff recommend funding levels comparable to FY 2003/04. Funding of CDBG
Administration and Fair Housing is also recommended at the FY 2003/04 level.
In the category of capital projects, $500,000 for the CDBG Housing Development Fund
for acquisition of an affordable housing site is recommended, consistent with Council’s
May 13, 2002 action to allocate $440,000 in funding for a City affordable housing
project. $42,950 for kitchen rehabilitation in the Assisted Living Units at Lytton Gardens
Senior Housing is recommended; this amount may increase if additional funds are made
available through excess program income or reallocated funds.
POLICY IMPLICATIONS
All of the applications recommended for funding in fiscal years 2003/2004 and 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 progams 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 12, 2003. The
funding allocations and Annual Action Plan update will be submitted to HUD by the May
15, 2003 deadline.
ENVIRONMENTAL REVIEW
For purposes of the National Environmental Policy Act (NEPA)
Environmental Quality Act (CEQA), budgeting in itself is not
and the California
a project. HUD
CMR: 198:03 Page 8 of 9
environmental regulations for the CDBG program are contained in 24 CFR 58
"Environmental Review Procedures for Title I Community Development Block Grant
Programs". The regulations require that entitlement jurisdictions assume the
responsibility for environmental review and decision making under 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 2003/04 and 2004/05
CDBG Funding
2003/04 Draft Annual Action Plan Update of the Consolidated Plan
for the period 2000 to 2005
PREPARED BY:
DEPARTMENT HEAD: ~
Director
Eloiza Murillo/vGarcia, Associate Planner - CDBG
of Planning and Community Enviromnent
CITY MANAGER APPROVAL’-~~, J~!~O ~
EMILY HARRISON
Assistant City Manager
CDBG Citizens Advisory Committee Members
2003/05 CDBG Applicant Agencies
CMR: 198:03 Page 9 of 9
ATTACHMENT A
STAFF AND CITIZENS ADVISORY COMMITTEE (CAC)
RECOMMENDATIONS FOR FISCAL YEAR 2003/04 AND FISCAL
YEAR 2004/05
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDING
PUBLIC SERVICE APPLICATIONS
1.Emergency Housing Consortium (EHC) - Palo Alto HOMES Program
2011 Little Orchard Street, San Jose, CA 95125
FY 03/04
FY 04/05
Funding Request
$10,500
$10,500
2002/03 Funding
$8,490
Staff/CAC Recommendation
$7,65O
$7,35O
Proposal: Agency provides emergency shelter and comprehensive supportive ser~dces 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
Count),. Supportive services include prepared meals, counseling, child care, transportation,
case management, job counseling, and skills workshops to help secure housing and/or
employment.
Discussion: Current contract objectives are being met. This agency provides the majorit),
of homeless shelter services in Santa Clara Count)’, 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.
Priority Need: Shelter and services for persons who are homeless
2.Palo Alto Housing Corporation (PAHC) - SRO Resident Support Services
439 Emerson St. and 753 Alma St., Palo Alto, CA 94301
FY 03/04
FY 04/05
Funding Request
$44,720
$70,002
2002/03 Funding
$24,745
Staff/CAC Recommendation
$2_,_~00
$22,000
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 of homelessness and specia! needs. Alma Place is a 106-unit SRO
apartment building which 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 cannot be
effectively operated for the benefit of this population without additional services. The
service program has dramatically reduced the Barker’s turnover and eviction rates. PAHC
requests additional funding to extend the supportive services program to residents of the
Alma Place Single Room Occupancy Residency Hotel (SRO).
3. Catholic Charities- Long-Term Care Ombudsman
2625 Zanker Road, San Jose, CA 95134
FY 03/04
FY 04/05
Funding Request
$8,700
$8,940
2002/03 Funding
$0
Staff/CAC Recommendation
$5,550
$5,250
Proposal: 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 trained community volunteer
ombudsmen visit residents on a regular basis and as special circumstances dictate (i.e., in
response to specific complaints). Agency staff and volunteers investigate complaints,
including allegations of abuse and neglect, seek fair resolution to problems, and promote
residents’ rights for quality care and quality of life in the long-term care setting.
Priority Need: Supportive services for lower-income persons.
Discussion: The Ombudsman Program services are not duplicated by an?, other agency, and
provide an important presence in long-term care facilities. Local volunteers are utilized to
provide the majority of site visits. Agency proposes contacting/interviewing 495 Palo Alto
residents and conducting 40 complaint investigations. The number of contract service units
may be reduced commensurate with the reduced funding.
4.Shelter Network- Haven Family House
260 Van Buren Road, Menlo Park, CA 94025
FY 03/04
FY 04/05
Funding Request
$20,000
$20,000
2002/03 Funding
$20,000
Staff/CAC Recommendation
$19,000
$18,700
Propogal: 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 of homelessness. An on-site licensed childcare facility is also available.
Priority 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). Shelter Network estimates that 70 percent of families completing the pro~am will
successfully return to permanent housing.
5.Clara-Mateo Alliance (CMA)- Family Shelter Wing
795 Willow Road, Bldg. 323-D, Menlo Park, CA 94025
FY 03/04
FY 04/05
Funding Request
$22,000
$22,00O
2002/03 Funding
$99 000
Staff/CAC Recommendation
$20,900
$20,600
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 from 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.
Priority 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. 3_~-D. Menlo Park, CA 94025
Funding Request
FY 03/04 $28,750
FY 04/05 $28,750
2002/03 Funding
$28,750
Staff/CAC Recommendation
$25,000
$24,700
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 2,250 nights of care
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
FY 03/04
FY 04/05
Funding Request
$4O,OOO
$60,000
200_/0~Funding
$20,715
Staff/CAC Recommendation
$17,750
$17,450
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.
Priority Need: Shelter and services for persons who are homeless.
Discussion: Urban Ministry of Palo Alto has merged with InnVision, a larger social service
agency based in San Jose. The merger brings increased administrative stability to Urban
Ministry through InnVision’s established expertise in federal funding and administrative
oversight. This collaborative effort will also provide increased progammatic opportunities
to help the program’s clientele.
8.St. Vincent de Paul Society- St. Joseph the Worker Center
1880 California Avenue, Mountain View, CA 94043
FY 03/04
FY 04/05
Funding Request
$15,000
$15,000
2002/03 Funding
$10,000
Staff/CAC Recommendation
$9,5O0
$9,200
Proposal: The St. Joseph the Worker Center was formed in Mountain View seven 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 progam 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. Fair Housing Services - Determined through RFP
FY 03/04
FY 04/05 ’
Funding Request
$26,800
$26,800
2002/03 Funding
$25,800
Staff/CAC Recommendation
$26,800
$26,800
Proposal: The City of Palo Alto has 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. The Cities seek 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 Count?,~ide Fair
Housing Study, which was released in January _00~. The Department of Housing and Urban
Development (HUD) regulations require CDBG entitlement jurisdictions to affirmatively
further fair housing choice.
10.City of Palo Alto - Department of Planning and Community Environment
250 Hamilton Avenue, Palo Alto, CA 94301
Funding Request
FY 03/04 $140,000
FY 04/05 $147,000
2002/03 Funding
$140,000
Staff/CAC Recommendation
$!40,000
$140,000
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
Discussion: The cost of administering the CDBG progam is approximately $200,000 per
year. A reimbursement of $140,000 from ~ant funds is well within the 20% administrative
cap and helps alleviate General Fund budgeting constraints.
6
CAPITAL AND/OR HOUSING PRO~CTS
11.Community Housing Inc. - Lytton Gardens Kitchen Renovation
649 University Avenue, Palo Alto, CA 94301
Funding Request 2002/03 Funding Staff/CAC Recommendation
FY 03/04 $55,967.25 N/A $0
FY 04/05 $53,728.56 $42,950*
*This amount may increase if additional funds are made available through excess program income or real!ocated units.
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 seniors. 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 $42,950 in fiscal year 2004/05 for a
portion of the kitchens on the condition that the rehabilitation project is compressed into 2
months as opposed to 2 years. This amount may increase if additional funding becomes
available in 2004.
12.Clara-Mateo Alliance - Kitchen & Elsa Segovia Rehab
795 Willow Road, Bldg. 323-D, Menlo Park, CA
FY 03/04
FY 04/05
Funding Request
$200,000
$0
2002/03 Funding
N/A
Staff/CAt Recommendation
$200,000
N/A
Proposal: Funding is requested for the rehabilitation of the Elsa Segovia Day Center and the
conversion of the food storage areas into a commercial kitchen. The modifications will
upgade essential security measures and will decrease existing food costs because dinners can
be made on-site as opposed to contracting out for meal services.
PrioriW Need: Shelter and services for persons who are homeless
7
Discussion: Staff and the CAC recommend $200,000 in funding for this project to increase
the safety and security of the shelter residents and to defray existing meal costs by
approximately 40%.
13.Adolescent Counseling Services - Caravan House Rehab
2361 High Street, Palo Alto, CA 94301
FY 03/04
FY 04/05
Funding Request
$111,197
$0
2002/03 Funding
N/A
Staff/CAC Recommendation
$111,197
N/A
Proposal: Adolescent Counseling Services operates Caravan House, a group home for 6
teenage girls ages 12-18 who have been removed from their families because of child abuse
and neglect. It is the only group home of its kind that is located in Palo Alto. The agency
is requesting funding for rehabilitating the home, which includes: installation of a new
bathroom, roof replacement, termite work, and exterior painting.
Priority Need: Group home preservation
Discussion: Staff and CAC recommend $111,197 in funding for this project. Assisting in
the preservation of group homes in consistent with the policies in the City of Palo Alto’s
Housing Element of the Comprehensive Plan, 1999-2006.
14.Palo Alto Housing Corp. - Barker Hotel Improvement Plan
439 Emerson Street, Palo Alto, CA 94301
2002/03 Funding
N/A
Funding Request
FY 03/04 $41,173
FY 04/05 $41,173
Staff/CAC Recommendation
$0
$0
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, installation of an entry
system and new sinks in the upstairs units.
Priority Need: Rehabilitation of affordable rental housing
Discussion: Staff and CAC do not recommend funding for this project because, altho-agh the
preservation of affordable rental housing is an important issue, several of the other proposed
projects have a more urgent need. The request may be considered in 2004/05 if additional
funding is available through excess progam income or reallocated funds.
15.Palo Alto Housing Corp. - Oak Manor Townhouses Water System Replacement
630 Los Robles Avenue, Palo Alto, CA 94306
IFY 03/04
FY 04/05
Funding Request 2002/03 Funding
$278,358 N/A
$0
Staff/CAC Recommendation
$11.~.67_
N/A
Proposal: Palo Alto Housing Corporation acquired the 33-unit Oak Manor Townhouses in
1991. The complex consists of both ~;o and three-bedroom units, occupied by very-low, low
and moderate income families. 22 of the units are assisted under the Section 8 Moderate
Rehabilitation Progam through the Santa Clara County Housing Authority. The four
building complex was built in 1966 and has major capital plumbing needs. The PAHC
proposal is to replace the domestic water supply system because of corroded galvanized pipes
that cause low water pressure and abrupt water temperature changes.
Priority Need: Rehabilitation of affordable rental housing
Discussion: Staff and the CAC recommend funding in the amount of $113,672.
Additional funding for the project will come from PAHC’s reserve funds as well as funds
that will be received through refinancing. Maintaining the existing stock of affordable rental
housing in good condition is a goal of both the City and the Palo Alto Housing Corporation.
The cost of replacing the domestic water supply system is beyond the scope of normal
operating reserves. Annual piecemeal repair costs range from $8,000 to $12,000.
16.Economic and Social Opportunities - Housing and Energy Services Program
!445 Oakland Road, San Jose, CA 95112
Funding Request 2002/03 Funding Staff/CAC Recommendation
FY 03/04 $60,000 N/A $60,000
FY 04/05 $60,000 $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 disabilties, improve energy efficiency and make necessary minor repairs in order to
avoid more expensive solutions in the future.
Priority Need: Conservation of energy and improved accessibility for individuals with
physical disabilities
Discussion: Staff and the CAC recommend that this project receive $60,000 in funding in
FY 03/04 and may receive additional funding in 2004 if additional funding available in
2004. Energy efficiency and the modification of units for those who are physically disabled
are identified as priorities in the City’s Housing Element Update, 1999-2006. Economic and
Social Opportunities addresses these needs by providing services designed to improve safety
and use, enhance affordability and preserve affordable housing.
17. Stevenson House - Safe Showers Program
455 E. Charleston Road, Palo Alto, CA 94306
FY 03/04
FY 04/05
Funding Request
$95,2OO
$0
002/0~ Funding
$50,000 for Emergency
Call System Upgrade
Staff/CAC Recommendation
$45,200
N/A
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 cut-down 112 non-accessible bathtubs to provide safe showers for elderly
residents.
Priority Need:Rehabilitation of affordable rental housing
Discussion: Staff and the CAC recommend $45,200 in funding for this project for
approximately 50% of the showers. The existing shower/tub combinations were originally
designed to give residents the choice of a shower or a bath. A more accessible shower would
increase the safety of the units, allow residents more flexibility in bathing, and reduce the
hazard of tripping and falling. Approximately 51% of Stevenson House’s residents are aged
80 or older.
18. Stevenson House- Hot Water Piping Project
455 E. Charleston Road, Palo Alto, CA 94306
Funding Request
FY 03/04 $0
FY 04/05 $38,260
2002/03 Funding
$50,000 for Emergency
Call System Upgrade
Staff!CAC Recommendation
N/A
$0
10
Proposal: Stevenson House provides !20 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.
Priority Need:Rehabilitation of affordable rental housing
Discussion: Staff and the CAC do not recommend funding for this project because of the
lack of funding available in FY 04/05. However, staff does recommend partial funding for
Stevenson House’s Safe Shower’s Project in FY 03/04. Staff and the CAC will consider
this project for funding in FY 04/05 if more funds become available.
19. City of Palo Alto - CDBG Housing Development Fund
Planning Department, City Hall
FY 03/04
FY 04/05
Funding Request
$100,000
$5OO,O0O
2002/03 Funding
$118,500
Staff/CAC Recommendation
$!00,000
$5OO,OO0
Proposal: On May 13, 2002, the City Council allocated $1,000,000 from the funding tot
he City’s Housing Fund to help defray site acquisition costs for a new affordable rental
housing project. Commiting 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 last year, 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
identified in the Housing Element of the Comprehensive Plan and to secure control of an
11
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, staff recommends a modification of the May 13, 2002 action
to allocate future CDBG Housing Development funds: reduce funding to $100,000 in
FY03/04 for pre-development costs for a site yet to be confirmed and retain $500,000 in
FY04/05 for site acquisition. In 2004/05, this allocation will be reviewed and could
possibly be reallocated. Commitment of additional future CDBG funding in order to
secure the total $1,000,000 may be sought in later years if and when a site is selected.
12
ATTACHMENT B
CITY OF PALO ALTO
Housing and Community Development
DRAFT
2003/201)4 ACTION PLAN
Annual Update of the City’s Consolidated Plan for the Period
July 1, 2000 to June 30, 2005
Public Review Period March 25, 2003 - April 25, 2003
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 - 2003/2004 Action Plan
CITY OF PALO ALTO
FISCAL YEAR 2003/2004 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 2003/2004 annual update to the City’s Consolidated Plan for the Period
July 1, 2000 to June 30, 2005. It describes the eligible programs, projects and activities the City
plans to undertake with funds that are expected to be available during the 2003/04 fiscal year.
The Consolidated Plan is a five-year planning document that describes loca! conditions and
resources, identifies priority housing, human service, and community development needs, and
outlines a~ strategy and plan to address the identified needs. The Consolidated Plan and the
annual 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 funding decisions are consistent with locally
identified priorities and strategies. The Action Plan describes how the activities to be undertaken
with CDBG funds in 2003/2004 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 Hearing~
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 2003/04 Action Plan was from March
25, _00.~ to April 25. _00.~. Interested citizens were invited to comment on the Draft Action Plan
at ~ither of the public hearings on April 1, 2003 and May 12, 2003, or by submitting written
comments by April 25, 2003 to the City of Palo Alto, CDBG Coordinator in the Department of
Planning and Community Environment, at 250 Hamilton Avenue, Palo Alto, CA 94301.
Public Comments
Citizen Participation
The City of Palo Alto has an adopted Citizen Participation Plan that provides for a nine-member
CDBG Citizens Adviso~’ Committee (CAC). The CAC process encourages public participation
in the CDBG allocation and evaluation review process. The CAC met on January 7, 14, 23,28;
February 4,11,18, 25; and March 6, 2003 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. In addition, the CAC met for two
Draft - 2003/2004 Action Plan
special meetings on January 22 and 29 to tour many of the agencies that submitted funding
applications.
Draft - 2003/2004 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 internationa! 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 fol!ows: White 77%, Asian t7%, Black 2%, Other or
Two or More Races 5%. Palo Alto is, overall, a very affluent community. In 1990, only 4.6% of
the population were below the poverty level. The 2003 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 are more jobs than housing units, 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 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 wi!l 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 count?~vide
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.
Draft - 2003/2004 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 - 2003/2004 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 ~ant through the U.S. Department of Housing
and Urban Development (HUD). In fiscal year 2003/04, the City will allocate $924,519 in
CDBG funds to eligible activities that address the needs identified in the Consolidated Plan. The
amount of the City’s 2003/04 CDBG entitlement ~ant from HUD is $791,000, estimated
program income is $44,000 and reallocated funds total $22,984. Pro~am income is income
directly generated from the use of CDBG funds that is returned to the CDBG program and
reallocated to new- activities.
FY 2003/04 CDBG Entitlement Grant $791,000
Program Income:
Estimated Program Income 2003/04 (HIP)
Estimated Program Income 2002/03 (PAHC)
Excess Prior Year Progam Income
34,000
10,000
66,535
Reallocated Funds:
Miscellaneous Reallocations 22.984
TOTAL ALLOCATION $924,519
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 armual 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 - 2003/2004 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 ~ant.
Low Income Housing Tax Credit Pro.aram
The Palo Alto Housi~ag Corporation applied for the Low Income Housing Tax Credits (LIHTC)
for the 53-unit Oak Court family rental housing project being created on the vacated site of the
old Palo Alto Medical Foundation in the downtown area in the first and second rounds of
competition in 2002. PAHC’s application was not funded even though it received the highest
score possible for its housing type category. This situation is due to the caps placed by the State
on the amount of tax credits available to the twelve largest counties in the State. The volume of
applications from other projects located in Santa Clara County exceeded the tax credits available
in both rounds of competition and certain types of housing receive preference points that are not
available to PAHC’s project. PAHC has applied for State Multifamily Housing Pro~am (MHP)
funds in the first round that was due in March 2003. If they are successful in acquiring MHP
funds, they will apply for 4% tax credits in the summer of 2003.
State, Local and Other Resources
City Housin,o_. Reserve Fund
The primary-local housing resource available in the City of Palo Alto is the City’s Housing
Reselwe. The Housing Reserve is a local housing trust fund that has two components
Commercial Housing In-Lieu 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 a balance of approximately $600,000.
Residential Housing In-Lieu 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. As of December 31, 2003, the Residential Fund had an unrestricted
balance of $1,600,000.
Housing Development Fund
The purpose of the Housing Development Fund is to have funds available on an ongoing basis to
utilize when necessary to facilitate the development, rehabilitation and preservation of low-
income housing. Housing development opportunities come up throughout the year and, due to
the nature of the real estate market, a quick response is frequently necessary. The Housing
Development Fund includes money from several sources: the CDBG Housing Fund, the City
Housing Reserve (with the Commercial and Residential components), and HOME trust funds (if
available). Each funding source is accounted for separately.
Draft - 2003/2004 Action Plan
Housing Development 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 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.
The actual process for initiating a project 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 City may provide funding from a variety of sources depending on the nature of the project.
The Planning Department will present recommendations for each project together with a
proposed funding package to the City Council for approval. In 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.
The CDBG Citizen’s Advisory Committee has recommended that $750,000 in Housing Reserve
funds be allocated to the Community Working Group/Housing Authority of Santa Clara County
for the Opportunity Center project. The funding recommendation was approved by the City
Council on March 3, 2003.
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 Pato 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. The Opportunity Center has applied for
$500,000 from the HTSCC, of which $150,000 was committed for predevelopment costs and
$350,000 is pending.
Multifamilv Housing Program (MHP)
The Multifamily Housing Program (MHP) is a 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 funds may
be used for multifamily rental housing proj ects involving new- construction, rehabilitation,
acquisition and rehabilitation, or conversion of nonresidential structures for permanent rental
housing only. Palo Alto Housing Corporation and Community Working Group/Housing
Authority of Santa Clara County (Opportunity Center) will be applying for MHP funds in the
first round of funding which is due in mid-March 2003.
Draft - 2003/2004 Action Plan
STATE, LOCAL, PUBLIC AND PRIVATE RESOURCES FOR AFFORDABLE
HOUSING
Activity Acquisition Rehab New Home Rental Homeless
Construction Buyer Assistance Assistance
Assistance
Homeless
Prevention
STATE, LOCAL, and PUBLIC
Commercial
Housing In-Lieu
Fund
Residential Housing X
In-Lieu Fund
MHP X
City Owned Land
MCC Progam
Housing Bond Trust X
Santa Clara County X
Housing Trust Fund
Santa Clara County X
Housing
Authority/Section 8
County Department
of Social Services
PRIVATE RESOURCES
BMR Rental &
Owner Progam
Private Lenders:X
Nonprofit X
Developers
Private Foundations
and Churches
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 wants, and to fully utilize other state and federal housing
deve!opment subsidies such as the low-income housing tax credit progam. The City will also
utilize its local Housing Reserve, as appropriate, to leverage federal and private housing funds
and to provide any required matching funds. Where eligible, CDBG funds could be used as a
portion of the matching requirement for federal housing programs.
Draft - 2003/2004 Action Plan
Geographic Distribution
The Map attached to this report shows the location of all the proposed activities for fiscal year
2003/04. 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 ~eater
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 federa! 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, 2004 will cause
HUD to reduce the City’s next grant by 100% of the amount in excess of 1.5 times the annua!
grant.
For this reason, all funding allocations for 2003/04 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 priority activities will be undertaken
instead of higher priority activities simply because they are easier to accomplish and ready to
proceed.
10
Draft- 2003/2004 Action Plan
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
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 year 2001/02 that will conclude in 2002/03. Their experience has been
positive and they are continuing 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 staff to undertake longer-term strategic planning and to maximize available funding
resources.
2003/2004 PROJECTS AND ACTIVITIES TO BE UNDERTAKEN
All of the projects and activities to be undertaken with the 2003/2004 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 2003/04 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 tow- 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
deve!oper (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, 95 units of transitional and permanent 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 hmVision (an experienced shelter and service provider) will be the operator of
11
Draft - 2003/2004 Action Plan
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.
In fiscal year 2001/02, $480,000 in CDBG funding was allocated to this project. CWG acquired
title to the property at 33 Encina and 39 Encina with foundation grants that it had received for the
project. Title to 39 Encina is still encumbered with a claim of a right to purchase by the former
commercial tenant. CWG was unsuccessful at negotiations to settle that claim. CWG also
attempted to purchase the property at 45 Encina without success.
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 !oans, grants
and tax credit financing that must be assembled to construct this $21 million dollar facility.
An additional $800,000 in CDBG funds were allocated in 2002/03 for predevelopment,
relocation and acquisition costs. The total City CDBG funding for the Opportunity Center Was
$1,280,000.
CDBG Housing Development Fund - $100,000
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 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 F¥02/03
funds with the balance of $829,000 funds to be split among 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 lengthy process of site analysis and negotiation for purchase, and HUD’s new
requirements for timely expenditure of funds, staff recommends 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 $500,000 in FY04/05 for site acquisition.
Palo Alto Senior Housino~. Inc. (Stevenson House) - S45,200
12
Draft - 2003/2004 Action Plan
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 34 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 maj or repairs through rental increases if they are to keep
the rents affordable. This proposal is to upgade the showers for the safety of the frail residents.
The rehabilitation of existing lower-income rental housing is a high priority in the Consolidated
Plan.
Palo Alto Housing Corporation - Oak Manor Townhomes Water System Repairs - $113,672
The non-profit Palo Alto Housing Corporation owns and operates the 33-unit Oak Manor
Townhomes at 630 Los Robles in Palo Alto. The building was constructed in 1966 and was
purchased by PAHC in 1991. It has a combination of two and three bedroom units suitable for
families. The existing galvanized water pipes have deteriorated and need to be replaced.
Adolescent Counseling Services- Caravan House Rehabilitation - $111,197
Adolescent Counseling Services operates Caravan House, a group home for 6 teenage girls ages
12-18 who have been removed from their families because of child abuse and neglect. It is the
only group home of its kind that is located in Palo Alto. The agency is requesting funding for
rehabilitating the home, which includes installation of a new- bathroom, roof replacement, termite
work, and exterior painting.
Economic and Social Opportunities - Housing and Energy Services Program - $60,00!)
Economic and Social Opportunities (ESO) was established in 1970 and provides a variety of
services to the County’s low- income and needy community. ESO 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.
Non-Housing Community Development Activities
The following capital projects address the Consolidated Plan’s priority to "expand, modernize,
rehabilitate and make seismic and other safety related improvements to facilities that serve low-
income and special needs populations."
Clara-Mateo Alliance - Kitchen and Elsa Segovia Rehabilitation - $201),000
The Clara-Mateo Alliance has six individual bedrooms devoted to homeless families and
operates a 63-bed shelter for homeless individuals and couples. 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. 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
ct~ronic substance abusers. Funding is requested for the rehabilitation of the Elsa Segovia Day
13
Draft - 2003/2004 Action Plan
Center and the conversion of the food storage areas into a commercial kitchen. The
modifications will allow for upgrading essential security measures and will decrease existing
food costs because dinners can be made on-site as opposed to contracting out for meal services.
Proposed Public Sel~rice Activities
CDBG public service funds will be targeted to the following programs in fiscal year 2003/04:
" $ 7,650
" $22,300
,/ $20,900
,/ $25,000 to
¢" $19,000 to
,,/ $17,750 to
,/ $ 9,500 to
,/ $ 5,550 to
to Emergency Housing Consortium - Emergency Shelter
to Palo Alto Housing Corporation - SRO Tenant Counseling Program
to Clara-Mateo Alliance - Elsa Segovia Center for Homeless Families
Clara-Mateo Alliance - Shelter/Transitional Housing for Individuals
Shelter Network - Haven Family House Family Transitional Housing
Urban Ministry - Homeless Day Center and Services
St. Vincent de Paul - St. Joseph the Worker Pro~am
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 progams 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
violenc~ and rape, senior services, adolescent counseling, emergency food, nutritional services,
and recreationa! activities.
Sel~dces 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.
City of Palo Alto Seasonal Jobs Program: Designates several temporary, seasonal employment
opportunities in various City of Palo Alto Departments, for persons who are homeless and
14
Draft - 2003/2004 Action Plan
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.
Community Technology Alliance: Shelter hottine 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 count?~wide housing information
and referral website was developed and is maintained to assist service providers and housing
seekers.
Elsa Segovia Day Center for Homeless Women and Children: Day center and supportive
services including child care, health care, employment counseling, clothing and respite for
homeless families with children.
Emergency Housing Consortium: Shelter and supportive services to homeless persons at the
National Guard Armory in Sunnyvale, the San Jose Reception Center, and other transitional
housing programs 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.
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.
Mavfield 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.
15
Draft - 2003/2004 Action Plan
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 of Paio Alto/InnVision: Services for very-low income or homeless persons
including bagged ~oceries, hot meals, emergency shelter, information and referral, case-
management and money management (payee) pro~ams. 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 Ministry 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 Long 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 Atto’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.
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 17 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. Seven of the units are available with tenant based Section 8 subsidies
through the Shelter Plus Care program.
16
Draft - 2003/2004 Action Plan
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 Hohsing 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 $355 to
$515 per month and are available to persons earning below 40% of the median income. Ten 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 of homelessness.
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.
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 submitted to 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 2003/04 fiscal year:
-/Provide tenantJlandlord counseling and mediation services for Palo Alto residents through
the Palo Alto Mediation Program (Project Sentine!).
¯ / Support the Count)~ide 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.
17
Draft - 2003/2004 Action Plan
,/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 a fair housing agency, funded by and selected jointly by the cities of Palo
Alto, Mountain View, and Surmyvale to reduce discrimination in housing by:
a.Investigating cases of housing discrimination
b.Conducting consultations with persons who believe the?, 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
o 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
Amendments to Plan
Prior to the submission of an?, 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 funds to
abate immediate and necessary hazards. Such funds may be used for staff efforts, !oans, 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
18
Draft - 2003/2004 Action Plan
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 pro~am goals have been achieved, and the number of
beneficiaries who have been served. Progam 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, Gilroy,
Milpitas, San Jose), and the Urban County of Santa Clara continue to meet on a regular 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 deve!opment 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
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 seeking fair housing services from a single provider to serve the three
cities.
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, program participants, programs 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
19
Draft - 2003/2004 Action Plan
collaboration within Palo Alto. The CDBG and housing staff attend and participate in the semi-
annual Human Service Provider Network meetings coordinated by the Human Services Division
to promote understanding and collaboration among the local public service agencies.
2O
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
El Application
Not Applicable
[~ Preapplication
2, Date Submitted
05/15/2003
3. Date and Time Received by HUD
7. Applicant’s Legal Name
City of Palo Alto
51 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
" New Continuation F’] Renewal ~ Revision
If Revision, enter appropriate letters in box(es)El ~
A. Increase Amount B. Decrease Amount C. Increase Duration
D. Decrease Duration E. Other (Specify)
15. Catalog of Federal Domestic Assistance (CFDA) Number
I~ 4---
Title:Community Development Block Grant
Component Title:
17. Areas affected by Program (boroughs, cities, counties, States,
Indian Reservation, etc.)The City of Palo Alto, County of
Santa Clara, State of California
4. HUD Application Number
5. Existing Grant Number
B-02-MC-060020
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) ~
A. State 1. University or College
B. County J. Indian Tribe
C. Municipal
D. Township
E. Interstate
F. Intermunicipal
G. Special Distdct
H. Independent School District
i4. Name of Federal Agency
U,S. Department of Housing and Urban Development
16. Descriptive Title of Applicant’s Program
t< Tdbally Designated Housing Entity (TDHE)
L. Individual
M. Profit Organization
N. Non-profit
O. Public Housing Authority
P, Other (Specify)
The City of Palo Alto’s Community Development Block Grant (CDBG) Pr(~gram
for Fiscal Year 2003/2004.
19b. Congressional Districts of
Program 12th
218’!
18a. Proposed Program start date 18b, Proposed Program end date 19a. Congressional Districts of Applicant
07/01/2003 06/30/2004 12th Congressional Distdct
20, Estimated Funding: Applicant must complete the Funding Matrix on Page 2,
21. Is Application subject to review by State Executive Order 12372 Process?
This preapplication/application was made available to the State Executive Order 12372 Process for review on: DateA.Yes
B. No X I 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? U No
[-] Yes If ’~Yes," explain below or attach an explanation.
form HUD-424 (0112003)
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 matdx shown below, listing each program for which HUD funding is being
requested, and complete the certifications.
Grant Program*
CDBG
Grand Totals
HUD
Share
791,000
o00791,
Applicant
Match
For FHIPs, show both initiative and component
Other HUD
Funds
Other Federa
Share
State
Share
Local/Tribal
Share
0 o
o 0
Other
22,984~
22,984
~Reprogrammed Prior Year’s Funds
Program
Income
110,535
110,535
Total
924,519
924,519
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 Federal 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,
3isclosure Form to Report Lobbying. I 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 tdbally 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
tdbes 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 IName (printed)
Frank Benest
Title Date (mm/dd!yyyy)
City Manager 05/14/2003
form HUD424 (01/2003)
Previous versions of HUD-424 and 424-M are obsolete.Page 2 of 2 ref. OMB Circular A-102
Funding Sources
Entitlement Grant (includes reallocated funds)
CDBG
ESG
HOME
HOPWA
Total
$791,000
$0
$0
$0
Prior Years’ Program Income NOT previously programmed or reported
CDBG $66,535
ESG $0
HOME $0
HOPWA $0
Total
Reprogrammed Prior Years’ Funds
CDBG
ESG
HOME
HOPWA
Total
$22,984
$0
$0
$0
$791,000
$66,535
$22,984
Total Estimated Program Income
Housing Improvement Program
Paio Alto Housing Corp.
Total
Section 108 Loan Guarantee Fund
$34,000
$10,000 $ ,4,o00
$0
TOTAL FUNDING SOURCES $924,5t9
OtherFunds $0
Submitted Proposed Projects Totals $0
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)
(b)
Abide by the terms of the statement; and
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 10100
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;
o 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 complete 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
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) (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 incomel 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 improvements (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.
SignaturelAuthorized Official Date
Title
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APPENDIX TO CERTIFICATIONS
INSTRUCTIONS CONCERNING LOBBYING AND DRUG-FREE WORKPLACE
REQUIREMENTS:
Lobbyin,q 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.
Bo Dru.q-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.
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 grantee’s drug-free workplace
requirements.
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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)
Check if there are workplaces on file that are not identified here; The
certificati----~n with regard to the drug-free workplace required by 24 CFR part 24,
subpart F.
8.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;
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"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).
LOCALCERTSlO/O0
APPENDIX C
Proposed Pro.iects
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APPENDIX D
Map
FY 2003 - 2004
CDBG Projects
Location Map
APPENDIX E
Letter from HUD
U.S. Department of Housing and Urban Development
Pacific/Hawaii
California State Office
450 Golden Gate Avenue
San Francisco, California 94102-3448
March 6, 2003
Honorable Dena Mossar
Mayor of Palo Alto
P.O. Box 10250
Palo Alto, CA 94303
Dear Mayor Mossar:
Subject: Annual Community Assessment for the 2001 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 2001 Annual Action Plan objectives, based on the
City’s Five-year Consolidated Plan. The period covered by this assessment is July 1,
2001 - June 30, 2002. As a result of this assessment, we have determined that the City
has the continuing capacity to implement and administer the Community Development
Block Grant Program (CDBG) and is in compliance with the statutes and regulations
governing the program. This determination is based upon the information available to
this office through City’s Consolidated Annual Performance and Evaluation Report, as
well as our on-site programmatic monitoring of the City’s CDBG Program during the
month of April, 2002.
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 successful collaboration with
non-profit organizations and other local government entities during FY 2001, in order to
finance and develop new affordable housing benefiting low and moderate income
persons, homeless and special needs populations.
Two principal affordable housing projects comprising 143 units and supported by
the City, continued to make progress while in their advanced pre-development phases.
These and several smaller projects, when eventually completed will help the City exceed
its 125-unit, five-year Consolidated Plan goal. The City’s Joint Architectural/Historic
Review Board completed its satisfactory review of the Oak Court Apartments, which will
benefit 53 low and very low income families. Although Palo Alto Housing Corporation,
the non-profit developer was not successful in securing a Low Income Housing Tax
Credit allocation, it is applying for State Multifamily Housing Program and 4% tax credit
funding. The Opportunity Center Project, an $18.6 million dollar development, which
combines 90 units of transitional and permanent housing for homeless families and
individuals, as well as a 9,000 square foot comprehensive supportive services center,
received a total allocation of $1,280,000 in CDBG funds. These funds will cover housing
site acquisition costs, as well as a portion of the pre-development and construction costs
of the center. During the reporting year, acquisition action began on the third of three
contiguous parcels, which was instrumental in increasing the project’s total residential
units from 55 to 90.
The Opportunity Center represents a major collaborative effort between the City,
Counties of Santa Clara and San Mateo, HUD (Supportive Housing Program) and private
foundations as public-private lenders/supporters, Community Working Group as owner-
sponsor, Santa Clara County Housing Authority as developer and InnVision as manager
of the complex. The project’s development team anticipates raising most of the $13
million dollars in needed financing from Low Income Housing Tax Credits and the State
Multifamily Housing Program.
The proposed project to rehabilitate the Waverly Street House, owned by Alliance
for Community Care (ACC) to provide 13 transitional or permanent housing units was
terminated, given ACC’s decision to sell the property to a private investor. Committed
CDBG rehabilitation funds totaling $112,000 were reprogrammed and a small CDBG
project feasibility loan was repaid to the City as program income. However, $69,300 in
CDBG funds was provided for the rehabilitation of the Emerson North Apartments, a 6-
unit apartment building occupied by low and moderate income households. Another
$65,000 was provided to make emergency repairs to the 270-unit Lytton Gardens senior
housing complex. Rehabilitation work at the Emerson North Apartments was nearly
completed and the Lytton Gardens rehabilitation contract was awarded in FY 2001.
During FY 2001, although no new Below Market Rate (BMR) affordable units were
constructed, the City effectively maintained 152 BMR homeownership units, 101BMR
rental units in five complexes, plus 63 employer-based rental units which became 100%
occupied, as part of the 628-unit Stanford West Apartments project located on Stanford
University-owned land. Priority for BMR units was given to households with annual
incomes at or below 80% of the HUD median area income. In response to a growing
need, in September of 2002, the City Council established a BMR Emergency Fund
comprised of $150,000 in Residential Housing in-lieu funds. The purpose of this ongoing
permanent program is to provide emergency loans for BMR unit owners for substantial
mandatory assessments for capital repairs and prevent the loss of BMR units.
As a means of addressing the exorbitant cost of developing affordable housing
within Santa Clara County, over the past several years the City of Palo Alto participated
in efforts of the Santa Clara County Collaborative on Housing and Homeless Issues, the
Silicon Valley Manufacturing Group and Santa Clara County to establish a countywide
Housing Trust Fund (HTF). The City previously contributed $500,000 from the local
Residential Housing In-Lieu Fund. During FY 2001, the HTF became operational and
financed a variety of housing projects throughout the County, namely, five
transitional/permanent housing projects (217 units) for homeless persons, four
multifamily rental projects (513 units), including the Oak Court Apartments located in
Palo Alto, as well as 48 first-time home purchases, which also benefited a number of
Palo Alto residents.
Additionally, the City’s Planning Commission recommended approval of a revision
of the State-approved housing element, initially adopted in 1998, as a component of its
1998-2010 Comprehensive (Master) Plan. The City Council adopted the "Housing
Element: 1999-2006" on December 2, 2002. This local document places an emphasis
on creating new housing opportunities by use of such tools as density bonuses,
particularly near transit and services, mixed-use projects and strengthening other zoning
incentives. The City’s fair share of the region’s housing need, as defined by the
Association of Bay Area Governments is a total of 1,397 new housing units (including
381 units affordable to households with annual incomes at or below 80% of the area
median income) to be generated during the period of January 1, 1999 through June 30,
2006. A total of 781 new units were constructed through FY 2001. Projects such as the
Oak Court Apartments and Opportunity Center, once completed, will help the City meet
the 27% low and very low income targeting housing goal. The housing element also
continues protections for existing rental units, such as those generated in prior years via
the City’s Below Market Rate (BMR) programs.
The City continued to participate in a Santa Clara County-wide fair housing study.
The final study was submitted to the County and Cities by the contractor in September
2002, and released in January 2003. It focused on fair housing needs, impediments and
services throughout Santa Clara County and for specific communities. We noted that the
City and several other communities were instrumental in reviewing the draft study and
providing significant input regarding the implementation of fair housing strategies. The
final study reflects 2000 Census information and will be used to update the City’s
Analysis of Impediments to Fair Housing in the Spring of 2003.
The City utilized $1,346,250 in local general funds and $121,650 in CDBG funds
to support non-profit organizations to deliver a variety of essential housing-related and
community development public services to approximately 5,600 lower income persons
and households, individuals with special needs and the homeless population. This
included supportive services assistance to four shelter/transitional housing facilities
serving homeless individuals and families. According to data provided by the City, this
represents an increase of over 62% in persons served from the previous fiscal year.
Additionally, $65,000 in CDBG funds was utilized toward the total rehabilitation
cost of a section of the former veteran’s hospital facility in Menlo Park and the site of the
Clara-Mateo Alliance/Elsa Segovia Women’s Center. The Center was completed and
began providing emergency shelter and six transitional housing units to homeless
women with children. CDBG planning & administration funds in the amount of $24,800,
also supported fair housing activities.
During FY 2001, the City continued to support the homeless worker program with
$60,000 in City funding, which provided short-term employment opportunities to eight
homeless workers for two, 12-week periods. Jobs were created in City Departments
such as Public Works, Facilities Maintenance and Community Services. Selected
participants were provided with food and Goodwill clothing vouchers,, bicycle
transportation and were helped with resumes and skill training. Seven of the participants
in the program continued on to higher paying employment.
All CDBG Program statutory requirements were met. Overall, 100% of CDBG
funds were expended on activities that benefited low and moderate income persons and
households. Public services and planning/program administrative percentages were
12.35% and 16.54%, respectively, and below the maximum 15% and 20% caps.
As of April 30, 2002, i.e., 60-days prior to the end of the City’s 2001 fiscal year, its
balance of unexpended CDBG funds was at 2.00 of its annual entitlement grant, which
exceeded HUD’s required 1.5 threshold. As of the date of this letter, the City has made
commendable progress in reducing its expenditure rate to 1.40, considering that this rate
reflects the additional FY 2002 CDBG grant amount of $808,000. The City is now in
compliance with the FY2002 timeliness requirement. However, it’s critical that the City
continue to plan for the timely expenditure of CDBG program income and entitlement
grant funds, in order to meet the timeliness requirement test by April 30th of each fiscal
year, and avoid a future partial grant reduction.
There has been a renewed emphasis by the Department regarding the
accountability of HUD funded housing and community development programs. Program
monitoring is one approach HUD utilizes to ensure that all federal program requirements
are being successfully achieved. During FY 2001, our office conducted a monitoring of
the City’s CDBG Program during the month of April 2002. Our review examined the
processes, procedures and record-keeping used by the City in connection with CDBG
funded affordable housing and community development projects/activities. We reported
no findings or concerns and determined that the administration and operation of the
CDBG Program was highly efficient and accomplishments were consistent with
respective annual action plans, the Consolidated Plan and reporting submissions to the
Department.
Finally, should there be any issues or initiatives for which the City would like to
request technical assistance, we would be glad to work with City staff and also utilize our
contracted technical assistance providers to assist you.
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,
Original Signed By
Steven Bo Sachs
Director, Community Planning
and Development Division
Frank Benest
City Manager
Steve Emslie
Director, Department of Planning
and Community Environment
Julie Caporgno
Advanced Planning Manager
Jennifer Coile
CDBG Coordinator
Cathy Siegel
Housing Coordinator
Eloiza Murillo-Garcia
Assistant Planner