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Date
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November 19, 2007
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Agenda
Item No. 49 Roll
Call No. 07- Communication No. 07-694
Submitted by:
Richard A. Clark, City Manager |
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AGENDA
HEADING:
Public Hearing
and Approval of the Proposed Fourth Year (2008) Action Plan of the 2005-2009
U.S. Department of Housing and Urban Development (HUD) Consolidated Plan.
SYNOPSIS:
Recommend
approval of the Fourth Year (2008) Action Plan of the 2005-2009 HUD
Consolidated Plan as recommended by the City Manager. The Action Plan allocates Community
Development Block Grant (CDBG), HOME Investment Partnership Program (HOME), and
Emergency Shelter Grant (ESG) funding for the period of January 1 to December
31, 2008.
FISCAL
IMPACT:
Amount:
$6,195,000
Currently, the
Program Year (PY) 2008 HUD block grant entitlement funds available in the three
programs included in the Consolidated Plan are estimated to be:
- Community Development Block Grant
(CDBG) - $4,750,000
- Home Investment Partnership (HOME)
Program - $1,175,000; this amount includes $25,000 of projected American
Dream Downpayment Initiative (ADDI) funding.
- Emergency Shelter Grant (ESG) - $195,000
- Reprogrammed funds, 2006 CDBG
Funding for Central Iowa Employment Training Consortium (CIETC) - $75,000
(see roll call attachment)
Funding levels
are contingent on final
A decision based
on the recommendations of the Neighborhood Revitalization Board (NRB) and City
Council approval will be made regarding 2009 program year funding within 120
days after completion of the 2008 program year.
Funding
Source:
- HUD CDBG (CDBG2008009); FY 2007-08
Operating Budget, Community Development, Page 106, SP020 CDD049900
- HOME (HOME2008009); FY 2007-08
Operating Budget, Community Development, Page 107, SP036 CDD049900
- ESG (HESG2008009); FY 2007-08
Operating Budget, Community Development, Page 107, SP039 CDD049900.
ADDITIONAL
INFORMATION:
The Housing and
Community Development Act of 1974, as amended, requires the City to submit a
Consolidated Plan for HUD Community Planning and Development Entitlement Grants,
including CDBG, HOME and ESG programs.
Statutes for the
grant programs set forth three basic goals that must primarily benefit low and
very low-income persons:
·
Provide
decent housing;
·
Provide
a suitable living environment; and
·
Expand
economic opportunities.
On May 21, 2007, by Roll Call No. 07-980, the City Council adopted the priority goals and objectives recommended by the NRB and authorized distribution of Notices of Funding Availability (NOFAs) to potential operating agencies for programs to address the objectives.
The City
received proposals for 36 separate activities for the 2008 program year
(January 1 to December 31, 2008). Staff
in the Community Investment Administration Division of the Housing Services
Department, together with representatives of public and private agencies, rated
the proposals. The rating system
emphasized agency capacity, funding leverage, past performance, goals, and
objectives. The staff recommendations focus
on programs that provide permanent improvements including housing
rehabilitation, new construction, infrastructure improvements, economic
development, and neighborhood appearance and safety. The staff also provided funding
recommendations to the NRB along with the ratings.
On September 18
- 20, 2007, the NRB heard presentations from agencies submitting proposals and
met on Saturday, September 22, 2007, to finalize their recommendations for
funding. The City Council received the
NRB recommendations on October 8, 2007.
At their meeting
on October 8, 2007, Council directed that a notice be published regarding the
availability of the proposed plan for public review, for a period of 30
days. The Council also set the date for
a public hearing for November 19, 2007, to finalize the 2008 Action
Plan of the 2005-2009 HUD Consolidated Plan.
The 2008 Consolidated Plan will be submitted to HUD prior to December 1,
2007.
Administration, Public Services, and CHDO Allocations
Under HUD regulations, there is a cap of 20% on
the amount of CDBG funds that can be allocated for administration. The proposed allocation ($889,293) for
administration is 18.7% of the estimated 2008 CDBG entitlement. However, capacity building and planning
projects, if funded at their requested amounts, including Des Moines Neighbors
($25,000), Drake & Sherman Hill Historic Housing Studies ($8,000), Fair
Housing staff ($85,000) and the Polk County Housing Continuum ($50,000), are
also charged against the Administrative Cap.
When estimated program income of $600,000 is added to the total CDBG
funds available at the end of the 2008 program year, administration will be
19.8%.
There is a 15% cap on the CDBG funds that can be
allocated for public services. However,
there is a "grandfather clause" that allows cities to spend up to the
percentage of funds that were allocated in 1982 when the regulations were
changed.
A
minimum of 15 % ($172,500) of HOME funds has to be allocated, by regulation, to
Community Housing Development Organizations (CHDOs). Another 5 % ($57,500) can be allocated for
CHDO operating expenses, if appropriate.
There is a 10 % cap on HOME administrative costs and no administration
can be charged against ADDI. The City
Manager’s recommendation meets these requirements.
Proposal Recap
The
City received funding requests from 22 agencies and City departments proposing
36 activities totaling $5,806,159 for the 2008 program year (January 1 to
December 31, 2008). The funding requests
exceed the total amount available for CDBG, HOME, and ESG ($5,171,207) by
$634,952. The attached tables of 2008
and 2009 HUD Consolidated Plan funding recommendations include both the NRB and
City Manager’s funding recommendations.
Additionally, the City Manager has included in the attached tables grant
amounts of Supportive Housing Program (SHP) funding received by some of the
homeless agencies recommended to receive CDBG funding. The City Manager supports the NRB
recommendations with the following exceptions/comments:
Neighborhood Based Service Delivery – Neighborhood Inspection Division
NRB
Recommendation - $732,500
City Manager Recommendation - $762,500
The City recently learned that the health
insurance estimates for FY 2009 would be 20% more than rates used for
FY2008. The Neighborhood Inspection
Division did not have this information when they submitted their proposal in
early July. The $30,000 increase will
cover staff benefits reimbursed through the CDBG program. The $30,000 increase is funded by reducing
the Demolition Project’s allocation recommended by the NRB from $85,000 to
$55,000. For the past few years, there
has been an average of $60,000 of CDBG program income that can be used for this
activity. The financial report for the
period ending September 30, 2007, shows a balance of $381,894. This amount, if carried over to 2008 and
added to the recommended allocation and the program income, would provide
$496,894 for Demolition in 2008.
Community
Development Department – Polk
NRB Recommendation - $50,000 for 2008
Program Year only
City Manager Recommendation - $50,000 for
2008 Program Year and $50,000 for 2009 Program Year
This allocation will be used to hire a
consultant to work in conjunction with the Polk County Housing Continuum to
prepare a comprehensive plan to address chronic homelessness in
Primary
Healthcare – Clinic Operations Support
NRB Recommendation - $20,000
City Manager Recommendation - $20,000
It is recommended that this project
receive first priority for funding from reprogramming if any funding is
available. This would be an additional
$7,000 for their clinic operations.
Carryover,
Contract Extensions, and Program Income
The
NRB will review requests for contract extensions, carryover funds, and program
income after the first of the year, when these can more accurately be
determined. Their recommendations will
be forwarded to the City Council.
Management Protocols
The City requires agencies to submit a
copy of their financial audit (if required), financial statements, or a letter
of assurance from a CPA to the City if they receive CDBG/HOME/ESG. For the 2008 allocations, the City will
require all agencies that have annual expenditures in excess of $150,000 to
have a full independent audit completed prior to receiving funding.
The City Manager
is grateful to the Neighborhood Revitalization Board for their diligent efforts
in reviewing all of the proposals that were submitted for funding. Their work contributes to ensuring that this
limited amount of funding is allocated to agencies that will have the greatest
impact in our community.
PREVIOUS
COUNCIL ACTION(S):
Date:
October 8, 2007
Roll Call
Number: 07-1943
Action:
On Proposed Fourth (2008) Year Action Plan of the 2005-2009 U.S.
Department of Housing and Urban Development (HUD) Consolidated Plan,
(11-19-07). (Council Communication No. 07-600) Moved by
Hensley to adopt. Motion Carried 7-0.
Date:
October 8, 2007
Roll Call
Number: 07-1944
Action:
Communication from Neighborhood Revitalization Board (NRB) regarding the
Fourth (2008) and Fifth (2009) Year Action Plans. Moved by Hensley to
receive and file and refer to City Manager. Motion Carried 7-0.
BOARD/COMMISSION
ACTION(S):
Date:
September 22, 2007 (Neighborhood Revitalization Board - NRB)
Roll Call
Number: N/A
Action: Approval
of funding recommendations.
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
NONE