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02-19-2019 - AGENDA ITEM 10 AUTHORIZATION TO DRAFT THE FISCAL YEAR (FY) 2019-2020 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ACTION PLANAGENDA ITEM NO. 10 AGENDA STAFF REPORT City of West Covina I Office of the City Manager DATE: February 19, 2019 TO: Mayor and City Council FROM: Chris Freeland City Manager SUBJECT: AUTHORIZATION TO DRAFT THE FISCAL YEAR (FY) 2019-2020 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ACTION PLAN RECOMMENDATION: It is recommended that the City Council direct staff to develop a draft FY 2019-2020 CDBG Action Plan, based on the needs and priorities identified in the 2015-2020 Consolidated Plan, as amended (Table 1 of this report). BACKGROUND: The City receives an annual grant of CDBG funds from the U.S. Department of Housing and Urban Development (HUD). CDBG is a federal program with an overall objective of developing viable urban communities by providing decent housing and a suitable living environment, and expanding economic opportunities principally for low- and moderate -income persons. The City of West Covina has utilized these funds for the Domestic Violence Victim Advocate (Police Department), Senior Meals program, the Home Preservation Program, the Business Assistance Program, Public Infrastructure Projects, and to fund various public service providers (i.e., food banks, homeless advocates, meals on wheels, etc.). As a condition of receiving the funds, HUD requires the City to prepare an annual Action Plan, which details the activities the City plans to undertake with the funds in the respective year. This Action plan is to be consistent with the five-year CDBG Consolidated Plan, which is a strategic and visioning document on the use of these funds. The City Council adopted its most recent 5-year CDBG Consolidated Plan on May 5, 2015, which is valid through 2020. As a basis for the Consolidated Plan, an assessment and prioritization of community needs, relative to the use of CDBG funds, was required. The categories of community need identified in the current Consolidated Plan are: (1) Infrastructure Improvements, (2) Public Facilities, (3) Homeless/HIV/AIDS (4) Public Services, (5) Non -Homeless Special Needs (6) Economic Development, (7) Owner Occupied Housing, and (8) Rental Housing. Attachment No. 1 describes each category in detail. To facilitate prioritization and to evaluate the categories, HUD utilizes four levels of priority: High, Medium, Low, and No Such Need. A High Priority means that activities in that category will be funded by CDBG funds. A Medium Priority means activities in that category may be funded by CDBG funds. A Low Priority means CDBG funds will not be used to fund activities in a particular category. During the development of the FY 2015-2020 CDBG Consolidated Plan, the City conducted public hearings and a community meeting to receive public input from the residents in regard to prioritizing the required categories. Based on the limited CDBG funding and decrease in funding in prior years, the City Council established the FY 2015-2020 Consolidated Plan Priorities on March 17, 2015. Prioritization was subsequently amended on July 7, 2015, April 5, 2016, and March 20, 2018. Table 1 shows the current prioritization of needs at this point in the cycle. Table 1 FY 2015-2020 Consolidated Plan Priorities Categories of Need Priority Level Economic Development IHigh Infrastructure Improvements IHigh Owner -Occupied Housing IHigh Public Facilities High Homeless/HIV/AIDS IHigh Non -Homeless Special Needs Medium Public Services Medium Rental Housing ILow The categories shown as `Medium' and `Low' do not indicate that these are not priorities of the City of West Covina, but with limited CDBG funds, the City Council determined these as the priorities for CDBG funding. For example, while Rental Housing may be of high importance in the City, CDBG funds are not anticipated to fund any associated activity. DISCUSSION: This is the first of two public hearings required by HUD for the adoption of the FY 2019-2020 Action Plan. The purpose of this hearing is to provide an opportunity for citizen input relative to the identification and prioritization of community needs that may be addressed with CDBG funds in FY 2019-2020. Because this hearing occurs prior to the publication of the draft Action Plan, it is referred to as the Pre -Development Hearing. Staff is seeking authorization to draft the FY 2019-2020 Action Plan, based on the priorities established in the five-year Consolidated Plan for FY 2015-2020. According to 24 CFR 91.15(a)(1), each jurisdiction must submit its Plan to HUD at least 45 days before the start of its program year. Because the City's program year begins on July 1, Plans have been typically due by May 15. As of the writing of this report, staff has not been advised that the recent government shutdown has impacted this deadline. Staff can begin drafting the Action Plan and continue with the process of evaluating public service providers and possible capital projects. Once allocations are announced, the draft FY 2019-2020 CDBG Action Plan will be finalized and made available for a HUD -required 30-day public review. Following the review, the draft will be presented to City Council for consideration in a public hearing. This public hearing is also the opportunity for the City Council to consider changing the prioritization of community needs for FY 2019-2020 Action Plan. However, due to the limited amount of CDBG resources available, City staff does not recommend doing so at this time. The City Council still retains the ability to fund all priorities as part of the City's annual budget process. The City Council has the ability to modify/change priorities of the Categories of Need. OPTIONS: The City Council has the following options: 1. Direct staff to develop a draft FY 2019-2020 CDBG Action Plan, based on the needs and priorities previously identified in the 2015-2020 Consolidated Plan, as amended (Table 1 of this report); or 2. Provide alternative direction. Prepared by: Kelly McDonald, Public Services Manager Additional Approval: Nikole Bresciani, Assistant City Manager/Public Services Director Fiscal Impact FISCAL IMPACT: There is no fiscal impact resulting from this report. Attachments Attachment No. 1 - Descriptions of Categories of Need in Table 1 ATTACHMENT NO. 1 Descriptions of Categories of Need in Table 1, City of West Covina FY 2015-2020 Consolidated Plan Priorities This attachment describes the Categories of Need shown in Table 1 of the staff report. 1. Economic Development: Activities to address these needs will be funded by the Community & Economic Development (CED) non -housing funds. CED activities and the new Business Assistance Program will address this category of need. 2. Infrastructure Improvements: Improvements such as street rehabilitation and replacement of curbs and gutters will be funded during the Consolidated Plan cycle. (For example, projects may include street improvements.) 3. Owner -Occupied Housing: Owner housing needs will be addressed by the Housing Preservation Program (HPP). 4. Public Facilities: Public facilities may be funded during the Consolidated Plan cycle — 2015 to 2020. (For example, projects may include: accessibility improvement or parks and recreation facilities and youth centers.) 5. Homeless[HIV/AIDS: The allocation of CDBG funds to public services can address a portion of these needs. 6. Non -Homeless Special Needs: The allocation of CDBG funds to public services can address a portion of the non -homeless needs. (Non -homeless special needs populations include: the elderly, disabled, homebound, and mentally ill). 7. Public Services: A high priority was assigned to public services because CDBG funds can help to address the needs of the elderly, frail elderly, youth and other low/moderate income populations. These needs can be addressed by the 15% allocation of CDBG funds to public services. (For example, public services may include: youth services, transportation services, and crime awareness.) 8. Rental Housing: Rental housing needs are addressed by the Section 8 rental assistance program and the affordable housing developments funded by the CED Low and Moderate Income Housing Fund.