HomeMy WebLinkAboutItem 5: 2011/12 Funding Allocation for Federal CDBG and HOME Programs
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Action: 2011/12 Funding Allocations for Federal Community Development Block Grant
and Investment Partnership Programs
HOME
Meeting Date: April 25, 2011 Agenda Item Number: 5
Department: Planning & Development Staff Contact: Stephanie Jennings
www.eugene-or.gov Contact Telephone Number: 541-682-5529
ISSUE STATEMENT
The City Council is asked to approve the allocation of funds received through two Federal programs
administered by the U.S. Department of Housing and Urban Development (HUD). Through the
Community Development Block Grant program (CDBG), Eugene may allocate an estimated $1,258,600
in entitlement grant funds as well as $1,500,000 in program income. Through the HOME Investment
Partnership Program (HOME), Eugene may allocate an estimated $954,705 in entitlement grant funds
and $85,000 in program income.
BACKGROUND
Each spring, the City Council approves funding allocations for use of CDBG and HOME funds for the
next fiscal year. The proposed uses of funds are described and submitted to HUD each year in a
document called the One-Year Action Plan. The Action Plan must be submitted to HUD by May 15,
2011. The proposed uses of funding must align with the local community needs and strategic plan
described in the Eugene-Springfield 2010 Consolidated Plan. The CDBG Advisory Committee advises
the City on the use of CDBG funds and the Housing Policy Board (HPB) advises the City on the use of
HOME funds. In addition, the Action Plan must provide an update on the City’s use of the Section 108
and Brownfield Economic Development Initiative (BEDI) funds. Activities under the CDBG, HOME,
and Section 108/BEDI programs are described below.
Community Development Block Grant
The primary purpose of CDBG is to address the needs of low- and moderate-income persons. The City
is a CDBG entitlement jurisdiction and has received annual entitlement grants since 1975. Each year,
the Community Development Block Grant Advisory Committee, a Departmental Advisory Committee,
reviews requests for CDBG funds, holds a public hearing, and makes a final recommendation to staff for
use of CDBG funds for the next fiscal year. Funds available for allocation for FY 2011/12 are described
below:
New CDBG Entitlement Grant Funds ($1,258,600)
– Each year, Congress appropriates funds
for CDBG and HUD distributes funds according to a formula to entitlement jurisdictions. This is
an estimate of funds to be allocated to the City of Eugene. The estimated entitlement allocation
for FY 2011/12 is less than the previous year’s grant by $239,740.
CDBG Program Income ($1,500,000)
– The City of Eugene expects to receive $1,500,000 in
program income through two revolving loans that have been established with CDBG funds. The
Business Development Fund will generate an estimated $1,100,000 in FY 2011/12 and the
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
Housing Rehabilitation Fund will generate an estimated $400,000. In accordance with HUD
requirements, program income from revolving loan funds can only be allocated to further the
activities of the respective loan funds.
The CDBG Advisory Committee held a public hearing and adopted a final recommendation for use of
CDBG funds on April 12, 2011. The recommended allocation of new entitlement funds includes
funding for public services which includes operating funds for eight social service programs,
landbanking program, microenterprise training, and program administration. The package of
recommended uses will address critical community needs for social services, affordable housing, and
employment opportunities. If the City’s actual allocation of new entitlement funds is greater or lesser
than estimated, adjustments will be made to the allocation for the landbanking program. Program
income from the Business Development Fund and Housing Rehabilitation Fund will be allocated for
new business and housing rehabilitation activities.
Attachment A provides a table showing the sources, recommended uses, and a brief description for each
use of CDBG funds.
HOME Investment Partnership Program
The primary purpose of HOME is to expand the supply of housing affordable to low-income persons.
The City is the lead entity in the Eugene-Springfield Home Consortium, which has received annual
entitlement grants since 1992. The Eugene-Springfield Consortium will receive an estimated
$1,363,864 in HOME funds in FY 2011/12. This entitlement allocation is $185,982 less than the
amount received in the previous year. Eugene will receive 70 percent of entitlement grant funds
($954,705) and Springfield will receive 30 percent ($409,159). The expected program income will
come from repayments received through the Homebuyer Assistance Program and from other housing
development loans.
The HPB met on April 4, held a public hearing, and made a recommendation for allocation of HOME
funds to both jurisdictions. HPB recommends that Eugene’s portion of HOME funds be divided among
four program areas: 1) Housing Development Programs; 2) Homebuyer Assistance Program (HAP);
(
3) Security Deposit Assistance; and 4) Community Development Housing Organization CHDO)
Operating Support. The proposed allocation is similar to previous allocation of HOME funds with the
addition of a pilot security deposit assistance program. The proposed allocation maintains support for a
mix of housing development, renter assistance, homebuyer assistance, and organizational support. In
addition to these programs, Eugene staff anticipates up to $1,000,000 will be available for HOME
interim financing. Through HOME interim financing, the City makes short-term loans for HOME
eligible uses with funds dedicated but not yet disbursed for specific projects. The amount of funds
available for HOME interim financing is dependent on project timing. If the City’s actual allocation is
greater or lesser than estimated, adjustments will be shared equally across the program areas and
administration.
Attachment B includes a table which provides the sources, recommended uses, and a brief description
for each use of funds.
Section 108 Loan Guarantee Program
In July 2006, HUD selected the City’s Section 108 application to create a $9,895,000 loan pool, together
with BEDI grant funds, for redevelopment projects within the Downtown and Riverfront urban renewal
districts. On February 26, 2007, the City Council approved an ordinance authorizing the use of the
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
Section 108 loan as a financing tool. The non-emergency ordinance established the City’s general
ability to borrow for Section 108 projects with individual projects to be approved by council resolution.
The City has focused use of the Section 108/BEDI funds on the Beam Development project at the heart
of downtown. The City has an agreement with Beam Development to transform the important
intersection of Willamette and Broadway into a vital area with restaurants, retailers, and office space.
Section 108/BEDI funds will be utilized in two stages: Project #1 - loan for acquisition of the properties
and Project #2 - loan to Beam Development for rehabilitation of the Centre Court building. The City
Council approved a resolution in support of Project #1 on July 23, 2007, and a resolution for Project #2
on January 11, 2010.
Beam Development is currently completing the work necessary to rehabilitate the renamed Broadway
Commerce Center building for office and retail use. The building will provide unique, creative loft-like
spaces for established business and incubator space for newly emerging businesses. Prospective tenants
currently include an architecture firm and several software development firms. The building is expected
to be available for tenants in early fall, 2011.
RELATED CITY POLICIES
The Action Plan must be developed in accordance with the Eugene-Springfield 2010 Consolidated Plan,
which assesses local needs and establishes a five-year strategic plan. In order to allocate funds to
specific programs or projects, HUD regulations require a citizen participation process, including
advertising and conducting a public hearing, followed by City Council action.
The Action Plan is also consistent with other plans adopted by the local jurisdictions, such as the
Residential Land Use and Housing Element of the Metropolitan Area General Plan, Eugene City
Council Adopted Growth Management Policies, the Diversity and Equity Strategic Plan, the Lane
County Ten Year Plan to End Chronic Homelessness, and the Lane County Continuum of Care Plan.
The proposed uses of funds also specifically support economic development and affordable housing
goals set forth in the Envision Eugene Pillars.
COUNCIL OPTIONS
The City Council can approve, not approve, or modify the One-Year Action Plan for use of Federal
CDBG and HOME funds for 2011/12.
CITY MANAGER’S RECOMMENDATION
The City Manager recommends approval of the One-Year Action Plan for use of Federal CDBG and
HOME funds in 2011/12.
SUGGESTED MOTION
Move to approve the One-Year Action Plan for use of Federal CDBG and HOME funds in 2011/12.
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
ATTACHMENTS
A. CDBG Sources and Uses Table and Summary of Recommended Uses
B. HOME Allocation Table and Summary of Recommended Uses
C. CDBG Advisory Committee and Housing Policy Board Membership
FOR MORE INFORMATION
Staff Contact: Stephanie Jennings
Telephone: 541-682-5529
Staff E-Mail: stephanie.a.jennings@ci.eugene.or.us
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
ATTACHMENT A – CDBG Sources and Recommended Uses Table and Summary Descriptions
SOURCES OF FUNDS
AMOUNT
NEW CDBG ENTITLEMENT GRANT
$ 1,258,600
CDBG PROGRAM INCOME
Business Development Fund$ 1,100,000
Housing Rehabilitation Fund$ 400,000
TOTAL
$ 2,758,600
RECOMMENDED USES OF NEW
CDBG ENTITLEMENT GRANT
AMOUNT
AFFORDABLE HOUSING
Landbanking$ 428,600
Housing Rehabilitation Loan Fund$ -
PUBLIC SERVICES
Social Service Agencies (HSC)$ 350,000
Non-Profit Capital Improvements$ -
PUBLIC ACCESSIBILITY IMPROVEMENTS
Curb Ramps$ -
Audible Pedestrian Signals$ -
ECONOMIC DEVELOPMENT
Business Loan Progam$ -
Microenterprise Training Program$ 30,000
ADMINISTRATION
$ 450,000
TOTAL
$ 1,258,600
RECOMMENDED USES OF PROGRAM INCOME
AMOUNT
Business Development Fund$ 1,100,000
Housing Rehabilitation Fund$ 400,000
TOTAL
$ 1,500,000
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
Landbanking for Low-Income Housing Development
– $428,600 is recommended for allocation to
the landbanking for affordable housing program. Through this program, the City provides critical
resources for the purchase of land and associated infrastructure costs to be made available for the
development of homes and rental units for low-income households. Staff is currently investigating
several potential landbank sites and anticipates identification of one or more sites for purchase within
the next fiscal year. Timing is ideal for acquisition given declining real estate prices and an increase in
the number of sites available for purchase. In addition, it will be necessary to make infrastructure
improvements to one parcel already owned by the City.
Housing Rehabilitation Fund
– No new funds are recommended and as the program can sustain itself
through prior year allocations and $400,000 in program income. The Housing Rehabilitation Fund is a
revolving loan fund that offers low-interest loans for improvements to residences occupied by low-
income homeowners and renters. In addition, emergency repair grants and loans of up to $5,000 are
available to very low-income homeowners for urgent repairs and accessibility features. Grants of up to
$5,000 for accessibility improvements are available for renters with disabilities.
Public Services Operations
- $350,000 is recommended to support the operations of nonprofit agencies
selected and managed through the intergovernmental Human Services Commission (HSC). Public
service funding is capped at 15% of new grant funds and program income from the prior fiscal year.
This maintains the current funding level. Programs to be funded include: Catholic Community Services
family counseling, FOOD for Lane County dinner program and food box distribution, Relief Nursery
therapeutic preschool, St. Vincent DePaul singles and family day access centers, and White Bird
medical/dental clinics.
Non-profit Capital Facility Projects
– No new funds are recommended for allocation to nonprofit
capital facilities. Given changes in funding for human service operations and uncertainty regarding the
CDBG allocation, staff and the committee did not issue a specific request for non-profit capital facility
projects.
Curb Ramps
– No new funds are recommended to support the installation of curb ramps on existing
streets and sidewalks to remove barriers for persons with disabilities. Some funds previously allocated
for curb ramps are available for use in FY11/12. The Public Works Department works in coordination
with the Accessibility Committee of the Human Rights Commission to identify and prioritize placement
of curb ramps.
Accessible Pedestrian Signals
– No new funds are recommended to support the installation of
Accessible Pedestrian Devices (APDs) at existing signalized intersections to remove barriers for persons
with disabilities. Some funds previously allocated for accessible pedestrian signals are available for use
in FY11/12. The Public Works Department works in coordination with the Accessibility Committee of
the Human Rights Commission to identify and prioritize placement of accessible pedestrian signals.
Business Development Fund
- No new funds are recommended and as the program can sustain itself
through prior year allocations and $1,100,000 in program income to finance loans to businesses resulting
in the creation of jobs for low-income persons. The Business Development Fund is a CDBG revolving
loan fund for new and expanding local businesses that promotes job creation for low and moderate
income individuals. Although the program is mainly focused on job creation, commercial revitalization
projects that eliminate conditions of slums and blight are also eligible.
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
Lane MicroBusiness -
$30,000 is recommended to support microenterprise training conducted by Lane
MicroBusiness (aka eDEV). These funds will provide micro-enterprise business development services
such as training, education, and workshops for Eugene low-income micro-business entrepreneurs.
Administration
- $450,000 is requested for administration which includes support for project
implementation, development of the annual action plan and year-end report, staff support for the CDBG
Advisory Committee, fair housing activities contracted with Fair Housing Council of Oregon, the City’s
Central Services allocation, the annual audit, general program administration, and other regulatory
compliance requirements. Administration costs are 16.3% of CDBG entitlement and program income.
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
ATTACHMENT B – HOME Sources and Recommended Uses Table and Summary Descriptions
SOURCES OF FUNDS
AMOUNT
NEW HOME ENTITLEMENT GRANT
$ 954,705
UNUSED FUNDS FROM PREVIOUS YEARS
$ -
PROGRAM INCOME
$ 85,000
TOTAL
$ 1,039,705
RECOMMENDED USES OF FUNDS
AMOUNT
HOUSING DEVELOPMENT
$ 602,235
HOMEBUYER ASSISTANCE PROGRAM
$ 245,000
SECURITY DEPOSIT ASSISTANCE
$ 49,000
CHDO OPERATING SUPPORT
$ 48,000
ADMINISTRATION
$ 95,470
TOTAL
$ 1,039,705
Housing Development
– $602,235 is recommended to support Housing Development activities
including acquisitions, new development construction, rehabilitation, and project-related soft costs
incurred by the jurisdictions. Funds can be used for rental or homeownership developments. Eugene
awards funds allocated for Housing Development through an annual RFP processes. Eugene’s 2011
RFP was released March 11and proposals are due May 31, 2011. The Evaluation Committee of the HPB
will review the proposals in June, HPB will hold a public hearing and make a recommendation in
September, and the recommendation is scheduled to be considered by City Council in September.
Homebuyer Assistance Program (HAP)
– $145,000 in new funds and up to an additional $85,000 in
program income is recommended to support HAP. Through HAP, the City offers up to $10,000 in
downpayment assistance to low-income households seeking to purchase homes.
Security Deposit Assistance Program
- $48,000 in new funds for a security deposit assistance program
is recommended to help households earning less than 50 percent of area median income to attain suitable
rental housing. If funds are allocated, staff will work with member of HPB and area housing agencies to
develop and implement the program.
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
Community Development Housing Organization (CHDO) Operating Funds
– $48,000 is
recommended for CHDO operating support to expand the capacity of CHDOs to develop affordable
housing. All CHDOs must be certified or recertified each year in order to receive CHDO Operating
Funds. In addition to meeting organizational requirements, recipients of operating support must agree to
apply for HOME project funds or have a HOME project underway. Past recipients include: Mainstream
Housing, Inc, Metropolitan Affordable Housing Corporation (Metro), Neighborhood Economic
Development Corporation (NEDCO), and St.Vincent dePaul Society of Lane County, Inc.
Administration -
$95,470 is recommended for Administration costs. The Federal grant management
system automatically budgets 10% of new HOME funds for administration. Administration activities
include support for project implementation, development of the annual action plan and year-end report,
staff support for the HOME allocation process, annual project monitoring, general program
administration, and other regulatory compliance requirements.
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc
ATTACHMENTC– CDBG Advisory Committee and Housing Policy Board Membership
CDBG Advisory Committee
Victoria Bosch
Drix
John Fisher
Linda Hamilton
Hanna Scholz (chair)
Housing Policy Board
Sid Leiken, Lane County Commissioner
Chris Pryor, Eugene City Councilor
Dave Ralston, Springfield City Councilor
Norton Cabell, Chairperson
Karen Clearwater
Virginia Thompson
John VanLandingham
\\Cesrv500\cc support\CMO\2011 Council Agendas\M110425\S1104255 - and att's A,B and C.doc