Agenda Item 8 - PUBLIC HEARING REGARDING THE FISCAL YEAR (FY) 2022-2023 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ACTION PLANAGENDA ITEM NO.8
AGENDA STAFF REPORT
City of West Covina I Office of the City Manager
DATE: March 1, 2022
TO: Mayor and City Council
FROM: David Carmany
City Manager
SUBJECT: PUBLIC HEARING REGARDING THE FISCAL YEAR (FY) 2022-2023 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) ACTION PLAN
RECOMMENDATION:
Pending public testimony, it is recommended that the City Council direct staff to develop a draft FY
2022-2023 CDBG Action Plan, based on the needs and priorities approved for the FY 2020-2024
Consolidated Plan.
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.
According to 24 CFR 570.4, the policies and procedures used to determine CDBG allocations are
described in Sections 106 and 107 of the Housing and Community Development Act of 1974. For the
Entitlement Program, there are two formulas: "A" and "B". HUD calculates the amount of funds that each
entitlement grantee would receive under each of the two formulas. Formula A allocates funds to a
jurisdiction based on its metropolitan area's share of three factors across all US metropolitan areas. The
factors are:
1. Population, weighted at 25%;
2. People in poverty, weighted at 50%; and
3. Housing overcrowding, weighted at 25%
Formula B also allocates funds to a jurisdiction based on its metropolitan area's share of three factors
across all US metropolitan areas, but the factors are somewhat different. The Formula B factors are:
1. Population growth lag since 1960, weighted at 20%;
2. People in poverty, weighted at 30%; and
3. Pre-1940 housing units, weighted at 50%.
After HUD runs the calculations using the two formulas, it allocates the grantee the larger amount of the
two. However, because HUD uses the larger amount, when it adds all the grantees' allocations together,
the total is higher than the amount of CDBG funding available for the Entitlement Program. So, HUD
must recalculate the figures using a pro-rata reduction to reduce the total to the funding level for the
Entitlement Program.
The City of West Covina utilizes CDBG funds for the Domestic Violence Victim Advocate, 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. 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) Economic Development, (2) Homelessness, (3)
Infrastructure Improvements, (4) Owner Occupied Housing, (5) Public Facilities, (6) Non -Homeless
Special Needs, (7) Public Services, and (8) Rental Housing. Attachment No. 1 describes each category.
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.
The FY 2020-2024 CDBG Consolidated Plan, which was approved on April 6, 2021, included the
prioritization shown below in Table 1.
Table 1
FY 2020-2024 Consolidated Plan Priorities
Categories of Need
Priority Level
Economic Development
High
Homelessness
High
Infrastructure Improvements
High
Owner Occupied Housing
High
Public Facilities
High
Non -Homeless Special Needs
Medium
Public Services
Medium
Rental Housing
Low
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 2022-2023 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 2022-2023. Because
this hearing occurs prior to the publication of the draft Action Plan, it is referred to as the
Pre -Development Hearing.
This public hearing is also the opportunity for the City Council to consider changing the prioritization of
community needs for the FY 2022-2023 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 and to modify/change priorities of
the Categories of Need. The City has not been notified of its FY 2022-2023 allocation as of the writing of
this report.
Staff is seeking authorization to draft the FY 2022-2023 Action Plan, based on the priorities established
in the five-year Consolidated Plan for FY 2020-2024. Once staff receives such authorization, staff can
begin drafting the Action Plan as well as the process of evaluating public service providers and possible
capital projects. Once drafted, the Action Plan will be made available for a required 30-day public review
period. Following the review period, the draft will be presented to City Council for consideration in a
public hearing. The approved Action Plan is due to HUD no later than August 16, 2022.
OPTIONS:
The City Council has the following options:
1. Approve staff recommendation; or
2. Provide alternative direction.
Prepared by: Kelly McDonald, Public Services Manager
Fiscal Impact
FISCAL IMPACT:
There is no fiscal impact resulting from this report at this time.
Attachments
Attachment No. 1 - Descriptions of Categories of Need in Table 1
CITY COUNCIL GOALS & OBJECTIVES: Maintain and Enhance City Facilities and Infrastructure
Enhance City Image and Effectiveness
ATTACHMENT NO. 1
Descriptions of Categories of Need in Table 1,
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 non -housing fiords. Comnwity & Economic Development
activities and the new Business Assistance Program will address this category of need.
2. Homelessness: The allocation of CDBG funds to public services can address a portion of these
needs.
3. 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.)
4. Owner -Occupied Housing: Owner housing needs will be addressed by the Housing
Preservation Program (HPP).
5. Public Facilities: Public facilities may be funded during the Consolidated Plan cycle — 2020 to
2025. (For example, projects may include: accessibility improvement or parks and recreation
facilities and youth centers.)
6. 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 fiords to public
services. (For example, public services may include: youth services, transportation services,
and crime awareness.)
7. Non -Homeless Special Needs: The allocation of CDBG fiends to public services can address a
portion of the non -homeless needs. (Non -homeless special needs populations include: the
elderly, persons with HIV/AIDS, disabled, homebound, and mentally ill).
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.