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HomeMy WebLinkAbout17 CDBG PROGRAM 04-15-96NO. 17 4-15-96 DATE: APRIL 15, 1996 Inter-Com TO: WILLIAM A. HUSTON, CITY MANAGER FROM: ELIZABETH A. BINSACK, DIRECTOR OF COMMUNITY DEVELOPMENT SUBJEC~ CLARIFICATION OF VARIOUSCITY COUNCIL ACTIONS RELATED TO THE CDBG PROGRAM The following summarizes and clarifies the recent City Council action related to the Community Development Block Grant (CDBG) program. On April 1, 1996 the City Council adopted Resolution No. 96-25 approving the use of Fiscal Year 1996-97 CDBG funds. Per the direction given by the Council at the April 1 meeting, staff will develop guidelines for suggesting eligible programs and projects for possible funding with CDBG monies. The guidelines will be approved by the City Council and used by the Citizen Participation Committee and City departments at the start of the process for selecting projects for the 1997- 98 funding cycle. The two CDBG program items placed on the April 15 City Council agenda are unrelated to the Council's action on April 1. Specifically, the items to be considered by the City Council on April 15 are: Item No. 4 - reallocating remaining CDBG funds from Fiscal Years 1992-93, 1993-94, 1994-95 and 1995-96 from previously approved projects to other CDBG-funded programs (ie. Newport- Sycamore Youth Center) to reduce shortfalls in the project budgets. This action requires a public hearing. Item No. 17 - authorizing staff to enter into Separation Agreements transferring from the County of Orange to the City of Tustin authority for CDBG funds remaining under the County program. This includes CDBG funds allocated by the County priOr to the City becoming a direct entitlement city. Assuming administrative authority for the funds will provide the City with increased flexibility in expending the monies. A portion of the funds proposed for reallocation in Item No. 4, discussed above, are the County program monies. This item was placed on the consent calendar because no public hearing is required. If you have any questions or would like additional clarification, please let me know. EAB: PR: kd\ CDBG9 6 \ccactns. mem Inter-Com DATE: APRIL 15, 1996 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: AUTHORIZATION TO ENTER INTO SEPARATION AGREEMENTS TRANSFERRING CDBG AND HOME PROGRAM FUNDS FROM THE COUNTY TO THE CITY RECOMMENDATION That the City Council adopt Resolution' No. 96-38 authorizing the Community Development Department to enter into Separation Agreements with the County of Orange to transfer approximately $60,324.78, or the amount of the fund balance aS of March 31, 1996, in Community.Development Block Grant (CDBG) and $190,000 in HOME program funds from the County line of credit to the City line of credit. FISCAL IMPACT Entering into Separation Agreements will not have a fiscal impact on the City. Proposed programs will be implemented with CDBG and HOME funds. Administration of the programs will require assistance from existing City personnel. No fiscal impacts to the General Fund are anticipated. BACKGROUND The City of Tustin has participated in the federal CDBG program since its inception over 20 years ago. Prior to the 1994-95 funding cycle, the City received CDBG funds through the County of Orange, under what is known as the "Urban County Program." Funds from the federal HOME program, which began in Fiscal Year 1992-93 were also allocated to Tustin through the County. The completion of the 1990 census indicated that Tustin's population was over 50,000. Having a population exceeding 50,000 enabled the City to become an "entitlement community'' and eligible to obtain CDBG funds directly from the U.S. Department of Housing and Urban Development (HUD). Since the 1994-95 funding cycle, the City has received CDBG funds directly from HUD. Unfortunately, Tustin does not meet the formula established by HUD to determine eligibility for HOME funds directly from HUD nor can the City continue receiving them through the Urban County Program. City Council Report April 15, 1996 Page 2 While under the Urban County program, the City and County entered into various agreements related t° the administration and disbursement of program funds. Ail monies, especially CDBG funds, were paid to the City by the County on a reimbursement basis. Tustin has continued to drawdown funds through the County program, however, uhexpended Tustin monies remain in 'the County's Line of Credit from HUD. In light of the City's.entitlement status, the City has recently been asked to formally "separate" from the County with regards to the Urban County Program. Formal separation would require a request that HUD transfer remaining program funds (CDBG funds - approximately $60,324.78 and HOME funds - $190,000) from the County's Line of Credit to the City'~s. Under the gufdance of HUD, City and County staffs have developed Separation Agreements. In discussions with HUD staff, it was suggested that two Separation Agreements be prepared: .one for CDBG funds the other for HOME program monies. The two programs are managed by different federal staff; individual agreements will enable efficient processing by HUD. Draft copies of the two Agreements, reviewed and approved by the City Attorney, are included as Attachments A and B. Draft copies of the Agreements have also been transmitted to County offices for review by the County Council and approval of the Board of Supervisors. After the Agreements are executed by County and City representatives, they will be forwarded to HUD for processing, final approval and transfer of funds. , DISCUSSION Entering into Separation Agreements and assuming responsibility for expenditure of the CDBG and HOME Program funds would allow the City increased flexibility in determining what programs receive allocations. For example, under County administration, the majority of CDBG monies are allocated to the City's Commercial Rehabilitation Program which funds improvements in the~Old Town, 'First'Street and Newport Avenue commercial corridors. Initially, the program was very.popular with building owners and tenants. Funds were used for facade upgrades, new signage, and seismic retrofitting of unreinforced masonry structures in Old Town. However, with the completion of the majority of the seismic work, funds remain unexpended. Essentially, since the creation of the Commercial Rehabilitation Program, Council and community priorities have-shifted to other types of projects. City Council Report April 15, 1996 Page 3 With a transfer of CDBG and HOME program monies, the City will have the ability to reallocate funds from one program to-another, such .as from the~ Commercial Rehabilitation Program to the Sycamore/Newport Youth Center. A related item on the April 15 City Council public hearing agenda discusses the ,reallocation of the transferred County funds to specific City projects. The reallocation will not actually occur until after the Separation Agreement has been approved by HUD and the monies transferred. CONCLUSION Community Development Department staff believes entering into Separation Agreements will be a positive change in the City's CDBG and HOME programs. It is anticipated that administration of the programs will be streamlined by eliminating County oversight and flexibility in expending the funds will be increased. P~ia R~n~i'n' A~socia~e Planner PR: kd\ccrepor t \cdbghome. pr Attachments Elizabeth A. Binsack Director of Community Development 1 RESOLUTION NO. 96-38 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, AUTHORIZING ENTERING IN TO SEPARATION AGREEMENTS BETWEEN THE COUNTY OF ORANGE AND THE CITY OF TUSTIN TO SEPARATE AND TRANSFER COMMUNITY DEVELOPMENT BLOCK GRANT AND HOME PROGRAM FUNDS FROM THE COUNTY TO THE CITY. WHEREAS, the County of Orange and City of Tustin have previously entered into various agreements relating to the administration of the federal Community Development Block Grant (CDBG) Urban County Program and HOME Programs funds allocated to the City through the County of Orange;' and WHEREAS, the County administered the City's CDBG Program through June 30 ,1994, and has, to date, continued to administer CDBG funds granted to the City for Fiscal Years 91- 92, 92-93 and 93-94 (Program Years 17, 18 and 19) and HOME funds granted to the City for Fiscal Years 92-93 and 93-94 (Program Years 18 and 19); and WHEREAS, federal regulations allow the separation of a Metropolitan City's CDBG Program from the CDBG Program of,the County as an Urban County, as well as HOME Program funds allocated to a jurisdiction under the Urban County program, for the administration of the any unobligated grant funds; and WHEREAS, the Tustin became a Metropolitan City under the federal regulation on July 1, 1994 and is now a Metropolitan City; and ' WHEREAS, the County and City desire to transfer obligations and responsibility for unobligated funds and any future program income from the County to the City. WHEREAS, the City, as of this date, has uneXp~nded and unobligated funds of approximately $250,324.78, including Community Development Block Grant monies (approximately $60,324.78) and HOME Program funds ($190,000); and WHEREAS, actual fund balances, as of MarCh 31, 1996, to be transferred to the City will be determined by City staff in coordination with County personnel; and' WHEREAS, County and City staff have developed Separation Agreements that would formally separate the City from the County. with regards to administration of CDBG and HOME funds allocated to the City under the Urban County program, and request that the U. S. Department of Housing and Urban. Development transfer unobligated funds from the county's Letter of Credit to the City's Letter of Credit. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Resolution No. 96-38 Page 2 NOW THEREFORE BE IT RESOLVED, the City Council of the City of Tustin resolves as follows: Section 1: The Separation Agreements between the County of Orange and .the City of Tustin transferring approximately $250,324.78 of unobligated CDBG Program funds (approximately $60,324.78 or the amount of the fund balance as of March 31, 1996) and HOME Program funds ($190,000) from the County of Orange Letter of Credit to the City of Tustin Letter of Credit, attached as EXHIBIT "A" and EXHIBIT "B" and incorporated herein by reference, is hereby approved by the Tustin City Council. Section 2: The Director of Community Development is hereby authorized and directed to execute said Separation Agreements for and on behalf of the City of Tustin. Section 2: The city Clerk shall certify to the adoption of this Resolution and shall file a copy of said application with the minutes of this city Council meeting. PASSED and ADOPTED by the City Council of Tustin this 15th day of April, 1996. JIM POTTS Mayor Pamela Stoker City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) CERTIFICATION FOR RESOLUTION NO. 96-38 PAMELA STOKER, city Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 96-38 was duly adopted at a regular meeting of the Tustin City Council, held on the 15th day of April, 1996. COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER:ABSENT: PAMELA STOKER City Clerk PR: kd\CCRESOS\96-:~8, pr' EXHIBIT "A" COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SEPARATION AGREEMENT WITH METROPOLITAN CITY OF TUSTIN DRAFT THIS AGREEMENT entered into between the CITY OF TUSTIN (hereinafter referred to as "City") and the COUNTY OF ORANGE (hereinafter referred to as "County") this day of 1996. , w I T N E S S E T H: WHEREAS, the CoUnty of Orange has entered into contracts with the United States of America through its Department of Housing and Urban Development (HUD) to execute the County's Community Development Block Grant (CDBG) Program under the Housing and COmmunity Development Act of 1974, as amended (hereinafter referred to as "Act"); and WHEREAS, on September 5, 1990, the County and City entered into a Cooperation Agreement for Fiscal Years 91-92, 92-93 and 93- 94, the period of July 1, 1991 through June 30, 1994 (Program Years 17, 18 and 19, respectively), in which both parties agreed to cooperate to undertake or assist in the undertaking of community development and housing assistance programs; and WHEREAS, the County and the City have previously entered into Implementation Agreements (County Contract Nos. C41057, C41187, C41518, C41520, C41466, and C41467) to carry out specific community development activities; and WHEREAS, the City, as of this date, has unexpended Community Development Block Grant funds totalling $60,324.78. This amount consists of $5,323.76 in ContraCt No. C41057; $29,074.91 in Contract No. C41187; $11,876.50 in Contract No. C41518; $10,000.00 in Contract No. 41520; $3,271.44 in Contract No. C41466; and $778.17 in Contract No. C41467; and WHEREAS, the Act, as amended, allows the separation of a Metropolitan City's CDBG Program from the CDBG Program of the County as an Urban County for the administration of any unexpended grant funds; and WHEREAS, the City became a Metropolitan City under the Act on July 1, 1994, and is now a Metropolitan City and administers its own entitlement Community Development Block Grant Program; and WHEREAS, the County administered the City's CDBG Program through June 30, 1994, and has, to date, continued to administer funds granted to the City for Fiscal Years 91-92, 92-93 and 93-94 (Program Years 17, 18 and 19); and WHEREAS, the County and City desire to transfer obligations and responsibility for unexpended funds and.any future program income, derived therefrom in accordance with Section 106 (C) (3) of the Housing and Urban Rural Recovery Act· of 1983, from the County to the City. NOW THEREFORE, the parties agree as follows: 1. Community Development Block Grant funds of $60,324.78, which consist of the unobligated funds in Contract No.s C41057, C41187, C41518, C41520, C41466, and C41467 shall be transferred from the County to the City. This Agreement shall constitute a request to HUD to transfer this amount of Community Development Block Grant funds from the Urban County's Letter of credit to the City's Letter of Credit, as soon as practicable by HUD. 2. The City, upon transfer of these funds to the City's Letter of Credit by HUD, shall accept all obligations and responsibilities to HUD for the expenditure of the unobligated funds stated herein. These obligations include, but are not limited to the Housing and Community Development Act of 1974, (Public Law 93-383) as amended; the Regulations of the Department of Housing and Urban Development relating to Community Development Block Grants (Title 24, Chapter V, 'Part 570 of the Code of Federal Regulation commencing with Section 570.1); and the assurances (HUD Form No. 7068); and any audit/monitoring findings and program reporting. 3. The City further agrees to carry out all activities formerly agreed to be carried out by the County, as set forth in the above Contract Numbers. Said activities to be carried out with the transferred funds which are the subject of the Separation Agreement. Transferred funds may be reallocated by the City to carry out new eligible activities, in accordance with federal regulations (Title 24, Chapter V, Part 570, Section 570.305) and all other applicable requirements. 4. The County agrees that it accepts all obligations and responsibilities to HUD for the expenditures and unliquidated ' obligations associated with the activities listed in the above contracts prior to the effective date of the transfer of funds to City.· Ail audit and monitoring findings associated with those expenditures and obligations remain with County. 5. The City is entitled to any unobligated program income which may result from the activities carried out with these transferred funds. 6. The City agrees to fully indemnify, defend and save harmless the County against any and all loss, damage, liability, claim, demand, suite or cause of action resulting from injury or harm to any person or property arising out of or in any way connected with the performance of this Agreement, excepting only such injury or harm as may be caused solely and exclusively by the fault or negligence of the County. ~7. o This~Agreement shall not have any force or effect until apprOved by HI3D and the monies transferred. IN WITNESS WHEREOF, the parties have executed this agreement on the year and day first above written. CITY OF TUSTIN , COUNTY OF ORANGE Jim Potts, Mayor Dated: Title Dated: ATTEST: City Clerk County Clerk APPROVED AS TO FORM: City Attorney County Counsel PR: br: kd\cdbg96\cdbgsep2, agr D AFT EXHIBIT "B" HOME PROGRAM SEPARATION AGREEMENT WITH METROPOLITAN CITY OF TUSTIN THIS AGREEMENT entered into between the CITY OF TUSTIN (hereinafter referred to as "City") and the COUNTY OF ORANGE (hereinafter referred to as "County") this day of , 1996. W I T N E S S E T H: WHEREAS, the County of Orange has entered into contracts with the United States of America through its Department of Housing and Urban Development (HUD) to execute the County's HOME Investment Partnership (HOME) Program under Titles I and II of the Cranston- Gonzalez National Affordable Housing Act, as amended (hereinafter referred to as."the Act"); and WHEREAS, on October 10, 1993, the County and City entered into a Cooperation Agreement in which both parties agreed to cooperate to undertake or assist in the undertaking of community development and housing assistance; and WHEREAS, the County and the City have previously entered into Implementation Agreements (County Contract Nos. C41246 and C41537) to carry out specific activities; and WHEREAS, the City, as of this date, has unexpended HOME Program funds totalling $190,000. This amount consists of $120,000 in Contract No. C41246; and $70,000 in Contract No. C41537; and WHEREAS, the Act, as amended, allows the separation of a Metropolitan City's Program from the Program of the County as an Urban County for the administration of any unexpended grant funds; and WHEREAS, the City became a Metropolitan City on July 1, 1994, and is now a Metropolitan City; and WHEREAS, the County has, to date, continued to administer funds granted to the City for Fiscal Years 92-93 and 93-94 (Program Years 18 and 19); and WHEREAS, the County and City desire to transfer obligations and responsibility for unexpended funds from the County to the City. NOW THEREFORE, the parties agree as follows: 1. HOME Program funds of $190,000 which consist of the unobligated funds in Contract Nos. C41246 and C41537 shall be transferred from the County to the City. This Agreement shall constitute a request to HUD to transfer this amount of HOME Program funds from the Urban County's Letter of credit to the City's Letter of Credit, as soon as practicable by HUD. 2. The City, upon transfer of these funds to the City's Letter of Credit by HUD, shall accept all obligations' and responsibilities to HUD for the .expenditure of the unobligated funds stated herein. These obligations include, but are not limited to the HOME Investment Partnership Act: Titles I and II of the Cranston-Gonzalez National Affordable Housing Act and Community Development Act of 1974, (Public Law 101-625), as amended, and any audit/monitoring findings and program reporting. 3. The City further agrees to carry out -all activities formerly agreed to be carried out by the County, as set forth in the above Contract Numbers. Said activities to be carried out with the transferred funds which are the subject of the Separation Agreement. Transferred funds may be realloCated by the City to carry out new eligible activities, in accordance with the Act and all other applicable requirements. 4. The County agrees that it accepts all obligations and responsibilities to HUD for the expenditures and unliquidated obligations associated with the activities listed in the above contracts prior to the effective date of the transfer of funds to City. Ail audit and monitoring findings associated with those expenditures and obligations remain with County. 5. The City is entitled to. any unobligated program income which may 'result from the activities carried out with these transferred funds. 6. The City agrees to fully indemnify, defend and save harmless the County against any and all loss, damage, liability, claim, demand, suite or cause of action resulting from injury or harm to any person or property arising out of or in any way connected with the performance of this Agreement, excepting only such injury or harm as may be caused solely and exclusively by the fault or negligence of the County. 7. This Agreement shall not have any force or effect until approved by HUD and the monies transferred. IN WITNESS WHEREOF, the parties have executed this agreement on the year and day first above written. CITY OF TUSTIN COUNTY OF ORANGE Jim Potts, Mayor Title Dated: Dated: ATTEST: City Clerk County Clerk APPROVED AS TO FORM: City Attorney County Counsel PR: br: kd\cdbg96\HOMEsep2, agr