HomeMy WebLinkAboutNB 2 CDBG PROGRAM 05-17-93_ NEW BUSINESS N0. 2
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FE: MAY 17, 1993 Inter -Corn �) <
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT- METROPOLITAN CITIES COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
RECOMMENDATION
It is recommended that the City Council approve the following
actions by Minute Order.
Accept designation as a Metropolitan City and pursue
entitlement status (Option No. 1, below) for purposes of
obtaining Community Development Block Grant (CDBG) funds;
2. Appoint the Assistant City Manager or her authorized
representative as the agent of the City to coordinate,
process, execute all applications, contracts, agreements
amendments, and ancillary documents within the scope of the
entitlement process and CDBG program administration.
FISCAL IMPACT
Administration of an independent CDBG program will require
commitment of staff time for preparation of applications, drafting
of the required housing strategy, preparation of annual reports and
general administration and monitoring of CDBG programs. However,
the City can be reimbursed up to 200 of any total grant amount for
all incurred administrative costs.
BACKGROUND AND DISCUSSION
Ir. previous years, the City of Tustin has received CDBG funds from
the County of Orange through participation in the Urban County
program for cities in the County under 50,000 in population.
Historically, we have received approximately $100,000 per year in
grant funding with 20% utilized by the County for program
administration.
To receive Urban County CDBG funds, Tustin submits an application
to the County with a City Council approved list of prioritized
projects suitable for CDBG funding. After hearings held by a
County application review board and the Board of Supervisors,
various programs and items on the City of Tustin's request list are
selected for funding. In the past, some of our top-ranked projects
City Council Report
Metropolitan Cities CDBG Program
May 17, 1993
Page 2
have gone unfunded, while lower priority projects have received
grant money.
On March 29, 1993, the City of Tustin received a letter (see
attached) from the U.S. Department of Housing and Urban Development
(HUD) indicating that based on our current population (over
50,000), the City of Tustin will be eligible to apply directly to
the federal government for CDBG funds as an entitlement community
for the 1994-95 funding year. It is anticipated that under the
entitlement program, the City could receive up to approximately
$450,000 in Community Development Block Grant (CDBG) funds in its
first year of application. However, we have been given three
possible options for program funding and administration:
1. Accept designation as a CDBG entitlement community.
This option would enable the City of Tustin to apply directly
to the federal government for increased CDBG funds, instead of
applying to the County of Orange.
One important benefit of accepting such status would be
substantially increased funding (approximately $450,000).
However, obtaining entitlement community status will require
significant staff time for administration. The City must
adopt its own Comprehensive Housing Affordability Strategy
(CHAS) and prepare an annual plan for the first five years of
the program addressing affordable housing issues. while
-reparation of the CHAS will be a lengthy process requiring
significant staff effort, citizen workshops and hearings,
Community Development Department staff will do the work "in-
house" and provide staff to administer the City's application
process.
It is anticipated that for the first year of participation in
the program 20'-� of grant funds (approximately $90,800.00)
would be available to offset City costs associated with our
initial application, including preparation of the CHAS and
first-year program administration expenses. In subsequent
years, 200 of grant funds would continue to be available to
the City for program administration and CHAS Annual Report
preparation costs. Another stipulation of entitlement status
is that 300 of Grant funds must be used to improve and
preserve affordable housing.
City Council Report
Metropolitan Cities CDBG Program
May 17, 1993
Page 3
2. Continue hast participation under the County of Orange Urban
County Program.
3.
If the City elects to continue its participation in the
program Urban County Program, the City could anticipate
receiving between $90,000.00 and $120,000.00 in CDBG funding
each year.
Under this option, Tustin is not required to have its own
CHAS; instead, we are covered by the County's. However, the
County would continue to charge the City 200 of it's grant
monies for County administrative costs, even though City staff
currently administers and monitors a majority of existing CDBG
programs such as the Graffiti Removal and Commercial
Rehabilitation Program. If Tustin elects to defer entitlement
designation, the option of becoming an entitlement city would
not again be available to the City for three years.
This option would permit the City to realize entitlement
status and receive increased grant funding (approximately
$450,000) while utilizing existing County administrative
functions, thereby eliminating the need for the City to
provide duplicate support services. There would be no need
for the City to develop its own CHAS or Annual Reports.
However, the County would still require the City to provide
significant demographics and housing related information to
supplement the County's CHAS.
The City has received a letter from the County, dated April 8,
1993 (see attached), informing us tha_ their staff would like
to continue our relationship for adm'_nistraticn of the CDBG
program. Through mutual agreement, Tustin's federal funds
would be distributed to the Countv for disbursement to the
^ity. The County has indicated that our annual application
would no longer be subject to review by the Board of
Supervisors and that they would not direct us as to the use of
=he funds; however, the County would charce the City up to 20%
of our total grant funds for administrative duties.
Staff believes that this option would ultimately be more
costly for Tustin than Option No. 1 and that it could mean a
loss of up to $90,800 in CDBG administrative funds to the
County for what could be accomplished by City staff at less
cos:.
City Council Report
Metropolitan Cities CDBG Program
May 17, 1993
Page 4
ISSUES AND CONCERNS
The primary issue related to the three options is the cost of
running an independent CDBG program. Staff believes that the
additional effort necessary to successfully administer the program
would be offset by 200 of the grant allocation ($90,800) which is
legally authorized to be used for administration.
City staff currently administers the majority of programs funded
with CDBG grant monies (Graffiti Removal, Commercial
Rehabilitation, Public Works programs, HOME). The County does
fully administer the City's CDBG Housing Rehabilitation Program,
which has been notoriously slow in drawdown and without noticeable
or measurable effect within the community. In fact, this year's
CDBG application (Year 19) did not include a request for additional
CDBG housing rehabilitation assistance due, in part, to the fact
that the City's own Redevelopment Set -Aside Rehabilitation Loan and
Grant Program provided an alternative and faster source of funding
for this activity.
The future availability of significant additional CDBG funding may
modify the range, scale and benefit received from future program's
desired by the community and City officials. As emphasized in the
March 29th letter from HUD, administration of a CDBG Program
requires a considerable commitment of time and qualified staff. In
light of the significant cost involved with remaining with the
County, staff believes that it would be of greater benefit for the
City to perform its own administrative function and have the
ability to offset the cost of these efforts.
CONCLUSION
Based on the information provided by HUD and the experience of
-ommunity Development Department staff in administering CDBG
programs, and the guarantee of receiving significantly increased
CDBG funding, staff recommends that Council accept designation as
a metropolitan city and pursue entitlement status for purposes of
obtainina CDBG funds.
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FR:kd\cntlmnt.rpt
Christine A. Sh leton
Assistant City ager
Honorable Leslie Pontious
Mayor
City of Tustin
15222 Del Amo Avenue
Tustin, CA 92680
Dear Mayor Pontious:
1
us Departr11ent of Housing and Urban Development
Lot Angeles OfHea. Region IX
1615 West Ol,rngie Boulevard
Lot Angeles. California 00015.7601
MAR 2 9 1993
SUBJECT: Fiscal Year 1994 Potential Metropolitan Cities
Community Development Block Grant (CDBG) Program
Your City has been identified as having an estimated
population of over 50,000 persons based on 1990 census data.
Consequently, the City of Tustin is eligible for entitlement
status in FY 1994. Based on a hypothetical FY 1993 grant
computation, your community's entitlement grant would be
approximately $454,000. The amount of the actual entitlement
Grant for FY 1994 would depend upon the appropriation by
Congress, the number of entitlement communities, changes in
census information and other factors that may affect computation
of the grant amount as determined by the statutory formula.
Each potential metropolitan city can choose one of three
options: accept designation as a metropolitan city; defer
designation as a metropolitan city and participate as a small
city in the urban county; or accept designation as a metropolitan
city and have a joint agreement with the urban county.
The Urban County officials with whom you are presently
cooperating will also be notified of this designation of
potential entitlement status for your community. You should
advise HUD and the Urban County, no later than may 21, 1993, of
the option you have selected.
Prior to malting your final determination we encourage you
to discuss each option thoroughly with your staff and the staff
of the Urban County. Please be aware that the independent
administration of a Community Development Block Grant Program
requires considerable commitment of time and qualified staff
resources in order to best serve the needs of your community and
its low and moderate income persons.
1
Fiscal Year 1994 Potential Metropolitan Cities 2
City of Tustin
Our office intends to hold an orientation session on the
rules and regulations governing the administration of the
Community Development Block Grant Program for those cities that
decide to pursue entitlement status. In the interim, enclosed is
a list of geographical areas and the responsible BUD Program
Manager who may be contacted for further information. A HUD
Community Planning and Development Representative will be
assigned at a later date to work with you and your staff.
rianager
Enclosure
zc: William Houston, City Manager �
Bob Pusavat, Director
1
Sixty new metropolitan cities and potential metropolitan
cities for CDBG have been identified for Fiscal Year 1994 based
on revised definitions for Metropolitan Areas from the Office of
Management and Budget and 1990 populations counts from the Bureau
of the census.
A. Twenty-eight new central cities of metropolitan areas will
become entitled metropolitan cities for Fiscal Year 1994.
They are not in existing or currently potential urban
counties.
Hvpothetical
City FY 1993 Gtant
1.
Conway, AR
$324,000
2.
Rogers, AR
$234,000
3.
Madera, CA
$656,000
4.
Paradise, CA
$275,000
5.
Watsonville, CA
$639,000
6.
Dover, DE
$285,000
7.
Punta Gorda, FL
$101,000
8.
Nampa, ID
$446,000
9.
DeRalb, IL
$519,000
10.
Barnstable, MA
$309,000
11.
Yarmouth, MA
$186,000
12.
Auburn, NY
$1,078,000
13.
Saratoga Springs, NY
$409,000
14.
Goldsboro, NC
$625,000
15.
Greenville, NC
$812,000
16.
Rocky Mount, NC
$806,000
17.
Fairborn, OH
$401,'000
18.
Ashland, OR
$210,000
19.
Aiken, SC
$267,000
20.
Myrtle Beach, SC
$281,000
21.
Sumter, SC
$632,000
22.
Conroe, TX
$441,000
23.
New Braunfels, TX
$421,000
24.
San Marcos, TX
$669,000
25.
Clearfield, UT
$320,000
26.
Fredericksburg, VA
$224,000
27.
Cayev Municipic, PR
$2,109,000
28.
D:anati Mur.icipic, PR
$1,793,000
1
l
Cities in Sections B, C, and D must be notified of the option to
accept designation as a metropolitan city; defer designation as a
metropolitan city and participate as a small city in the urban
county; or accept designation as a metropolitan city and have a
joint agreement with the urban county.
1-1
C.
Nine new central cities that are in existing or potential
urban counties.
Five central cities currently deferring metropolitan city
designation to participate in an urban county are in
counties requalifying this year.
Hypothetical
City
and County
FY 1993 Grant
1.
Hemet, CA (Riverside Co.)
$425,000
2.
Palm Desert, CA (Riverside Co.)
$190,000
3.
Temecula, CA (Riverside Co.)
$154,000
4.
Coronado, CA (San Diego Co.)
$180,000
5.
Atascadero, CA (San Luis Obispo Co.)
$207,000
6.
Paso Robles, CA (San Luis Obispo Co.)
$220,000
7.
San Luis Obispo, CA (San Luis Obispo Co.)
$794,000
8.
Gilroy, CA (Santa Clara Co.)
$458,000
9.
Newark, DE (New Castle Co.)
$307,000
Five central cities currently deferring metropolitan city
designation to participate in an urban county are in
counties requalifying this year.
Hypothetical
City and County
FY 1993 Grant
1.
Lodi, CA (San
Joaquin Co.)
$596,000
2.
Alton, IL (Madison
Co.)
$1,275,000
3.
Granite City,
IL (Madison Co.)
$942,000
4.
Belleville, IL
(St. Clair Co.)
$724,000
5.
Vancouver, WA
(Clark Co.)
$613,000
D• Eighteen cities with a 1990 population over 50,000 are
participating in urban counties that requalify this year.
City and Count
I. Peoria, AZ (Maricopa Co.)
2. Pleasanton, CA JAlameda Co.)
3. Clovis, CA (Fresno Co.)
4. Diamond Bar, CA (Los Angeles Co.
5. Palmdale, CA (Los Angeles Co.)
6. Rosemead, CA (Los Angeles Co.)
7. La Habra, CA (Orange Co.)
8. Mission Viejo, CA (Orange Co.)
9. Tustin, CA (Orange Co.)
10. Yorba Linda, CA (Orange Co.)
11. Hesperia, CA (San Bernardino Co.)
12. Milpitas, CA (Santa Clara Co.)
13. Pembroke Pines, FL (Broward Co.)
14. North Miami, FL (Dade Co.)
15, Wheaton, IL (DuPage Co.)
16. West Bloomfield, MI (Oakland Co.)
17. Brooklyn Park, MN (Hennepin Co.)
18. Beaverton, OR (Washington Co.)
Hypothetical
FY 1993 Grant
$441,000
$250,000
$517,000
$267,000
$583,000
$1,207,000
$585,000
5353,000
$454,000
$254,OOQ
$545,000
$440,000
$411,000
$735,000
$328,000
$248,000
$464,000
$395,000
TY O F
ANGE
COMMUNITY 1tLOPMENT
ENVIRONMENTAL MANAGEMENT AGENCY
JLl
HOUSING AND REDEVELOPMENT
April 8, 1993
FILE
Ms. Christine Shingleton
City of Tustin
15222 Del Amo Ave.
Tustin, CA 92680
Subject: Participation in Urban County CDBG Program
Dear Ms. Shingleton:
MICHAEL M. RUANE
DIRECTOR, EMA
DHONGCHAI PUSAVAT
DIRECTOR OF HOUSING AND
REDEVELOPMENT
LOCATION:
1200 N. MAIN STREET
SUITES 600 S 618
SANTA ANA, CALIFORNIA
MAILING ADDRESS:
P.O. BOX 4048
SANTA ANA, CA 92702-4048
TELEPHONE:
(714) 568-4199
FAX: (714) 566-4202
Every three years the County of Orange is required to notify Urban County
Participants in the Federal Housing and Community Development Block Grant (CDBG)
Program of its opportunity to "not" participate.
Attached for your review, is the U.S. Department of Housing and Urban
Development's Notice CPD 93-13 to the County for renewing its urban county
status. There is a gre ea .l inf rmation contained in this notice -
The County must know b May 21, 3 whether or not your City will participate.
If you choose not to j 'n th ounty, please read the CPD carefully. The
instructions to be taken are very specific.
If the City would like to continue what we feel has been a very positive
relationship under the CDBG Program, we would like to hear from you as early as
possible. My staff will immediately start work on our new 1994 through 1996
Cooperation Agreement.
If you have any questions concerning this letter, the CPD, or the Community
Development Program in general, feel free to call me or Manny Manzo Chief PH at
(714) 568-4209.
Very truly your
D LBob) Pusavat, Director
Housing/Redevelopment
MM:ch3040714201396
Attachment
cc: Manny M,anzo, H/CD
Dana Ogden