CC 2014-09-09_08.g. Amend Cooperative Agreement CDBGMEMORANDUM
TO: CITY COUNCIL
FROM: TERESA McCLISH, COMMUNITY DEVELOPMENT DIRECTOR
BY: /{.#, KELLY HEFFERNON, ASSOCIATE PLANNER
SUBJECT: CONSIDERATION OF AMENDMENT NUMBER 1 TO A COOPERATION
AGREEMENT BETWEEN THE COUNTY OF SAN LUIS OBISPO AND
THE CITY OF ARROYO GRANDE FOR JOINT PARTICIPATION IN THE
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM, THE HOME
INVESTMENT PARTNERSHIPS PROGRAM, THE EMERGENCY
SHELTER GRANT PROGRAM, THE AMERICAN DREAM DOWN
PAYMENT INITIATIVE PROGRAM, AND THE HOUSING
OPPORTUNITIES FOR PERSONS WITH AIDS (HOPWA) PROGRAM
FOR FISCAL YEARS 2015 THROUGH 2018
DATE: SEPTEMBER 9, 2014
RECOMMENDATION:
It is recommended that the City Council adopt a Resolution approving Amendment
Number 1 to the Cooperation Agreement between the County of San Luis Obispo-and the
City of Arroyo Grande (the "Amendment") for joint participation in the Community
Development Block Grant Program, the Home Investment Partnerships Program, the
Emergency Shelter Grant Program, the American Dream Down Payment Initiative
Program, and the Housing Opportunities for Persons with AIDS Program for Fiscal Years
2015 through 2018.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The Amendment does not create any additional impacts to financial and personnel
resources. The City's final allocation for the 2014 Community Development Block Grant
(CDBG) is $62,583. This represents a 2.41 % decrease from the City's 2013 allocation.
Assuming the same reductions will occur in future years, it is estimated the CDBG
allocation for the City will be approximately $61,075 in 2015, $59,603 in 2016 and
$58,167 in 2017.
The Cooperation Agreement (Agreement) includes a new provision under Section IV
specifying that thirteen percent (13%) of the City's CDBG allocation for administrative
costs be retained by the County to offset its overall costs to administer the program. The
City would retain seven percent (7%) of the total CDBG allocation for administration.
Item 8.g. - Page 1
CITY COUNCIL
CONSIDERATION OF AMENDMENT NUMBER 1 TO A COOPERATION AGREEMENT
BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF ARROYO
GRANDE FOR JOINT PARTICIPATION IN THE COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
SEPTEMBER 9, 2014
PAGE2
BACKGROUND:
The City Council adopted Resolution No. 4602 on June 24, 2014 approving an
Agreement to allow the City to continue its participation with the County and other
participating cities for Federal CDBG, Home Investment Partnerships (HOME),
Emergency Shelter Grant (ESG) and Housing Opportunities for Persons with Aids
(HOPWA) funding programs. The term of this Agreement is for a period of two (2) years
commencing July 1, 2015 through June 30, 2017.
ANALYSIS OF ISSUES:
HUD is requiring the County to amend the Cooperation Agreements with participating
cities within the County to add a paragraph regarding use of public funds and to provide
for a three-year term. The attached Amendment provides these changes. HUD also
requires that the amendments be executed prior to the end of September, 2014. The
Board of Supervisors is scheduled to consider these amendments on September 23,
2014.
The County Consortium participating in the Urban County Program receives a
predictable, formula-based annual grant and there is a wider range of uses for the
Federal CDBG funds. The tradeoff is that the City will not be able to apply, through a
highly competitive process, for a potentially greater amount of State administered funds
during the term of the Agreement. Since the City does not have any census tracts that
are low income, staff does not believe the City would be highly competitive.
With respect to the HOME program, the City, or a Community Housing Development
Organization, such as People's Self Help Housing (PSHH), can apply to the State for up
to $1,000,000 annually for affordable housing projects. The HOME program is an annual
statewide competition. Should the City continue in the San Luis Obispo Urban County
program, the City cannot apply for these grants. However, PSHH, or a similar nonprofit
organization, can apply directly to the County to fund a project located in the City.
County staff largely handles administration of the CDBG program, but the City is
authorized to· use up to 20% of its allocation for the cost of staff time if needed. Since
2011, the City has authorized the County to administer the City's public service grants
using a portion of the City's CDBG administration funds. Per the proposed Amendment,
the County would retain 13% of the City's administra~ive funds and the City would keep
· the remaining 7%. This would occur regardless of whether or not the City allocated funds
to public service activities. The Agreement also specifies that the City shall not
recommend an individual CDBG award of less than $8,000 for public service activities
due to the staff cost of processing such awards in compliance with Federal monitoring,
reporting and other administrative requirements.
Item 8.g. - Page 2
CITY COUNCIL
CONSIDERATION OF AMENDMENT NUMBER 1 TO A COOPERATION AGREEMENT
BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF ARROYO
GRANDE FOR JOINT PARTICIPATION IN THE COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
SEPTEMBER 9, 2014
PAGE3
On February 11, 2014, the City Council discussed using General Fund revenues to fund
public service requests in lieu of CDBG funds to eliminate restrictions on the size of
grants and to reduce the substantial HUD monitoring and administrative costs. The intent
was to use CDBG funds more for ADA improvements, yet still provide a less
cumbersome program to fund important local public service funding requests. The
Council directed staff to implement the following changes to the 2015 CDBG process:
• Eliminate all CDBG funding for public services;
• Increase $10,000 in Local Sales Tax funding for the Five Cities Fire Authority;
• Reduce General Fund funding for the Five Cities Fire Authority by $10,000;
• Reduce Local Sales Tax funding for ADA ramps by $10,000;
• Increase CDBG funding for removal of architectural barriers by $10,000;
• Appropriate $10,000 in the General Fund for local public services grants; and
• Establish a program for accepting applications for local public services grants.
The Council approved an additional $10,000 for public services grants in the budget
adjustments for a total of $20,000. It is anticipated that the Community Service Grant
Program Committee will be formed this fall.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
-Adopt the Resolution approving the Amendment;
Modify as appropriate and adopt the Resolution;
Do not adopt the Resolution; or
Provide direction to staff.
ADVANTAGES:
Adopting the Amendment is necessary to comply with HUD regulations. Continuation of
the Agreement, as amended, will allow the Council to consider funding programs that
provide important public services and programs using CDBG funds. Participation in the
County program will guarantee the City will receive a specified amount of funding.
DISADVANTAGES:
Continuation of the Agreement does not allow the City to compete for substantial
statewide CDBG funds for general and economic development projects, which could
significantly exceed the amount received through the County program. However, staff
does not believe the City would be competitive in the statewide CDBG program given the
lack of low income census tracts that are needed to qualify.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
Item 8.g. - Page 3
CITY COUNCIL
CONSIDERATION OF AMENDMENT NUMBER 1 TO A COOPERATION AGREEMENT
BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF ARROYO
GRANDE FOR JOINT PARTICIPATION IN THE COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
SEPTEMBER 9, 2014
PAGE4
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, September 4, 2014. The
Agenda and report were posted on the City's website on Friday, September 5, 2014. No
public comments were received.
Item 8.g. - Page 4
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE APPROVING AMENDMENT
NUMBER 1 TO A COOPERATION AGREEMENT
BETWEEN THE COUNTY OF SAN LUIS OBISPO AND
THE CITY OF ARROYO GRANDE FOR JOINT
PARTICIPATION IN THE COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM, THE HOME INVESTMENT
PARTNERSHIPS PROGRAM, THE EMERGENCY
SHELTER GRANT PROGRAM, THE AMERICAN DREAM
DOWN PAYMENT INITIATIVE PROGRAM, AND THE
HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS
(HOPWA) PROGRAM FOR FISCAL YEARS 2015
THROUGH 2018
WHEREAS, the County of San Luis Obispo ("County"), a political subdivision of the
State of California, and the City of Arroyo Grande ("City") a municipal corporation,
desire to participate in the Community Development Block Grant (CDBG) program
administered by the U.S. Department of Housing and Urban Development (HUD); and
WHEREAS, said program will promote the public health, safety and welfare by
providing grant funds to be used by the City and County to improve housing
opportunities for low and moderate-income households, to encourage economic
reinvestment, to improve community facilities and public services, and to provide other
housing-related facilities, or services; and
WHEREAS, to qualify for CDBG funds under HUD eligibility guidelines, the County must
have a population of at least 200,000 persons; and
WHEREAS, the City desires to continue to participate jointly with the County in said
program; and
WHEREAS, HUD requires that the parties enter into a Cooperation Agreement between
the County of San Luis Obispo and the City of Arroyo Grande for joint participation in
the Community Development Block Grant Program, the Home Investment Partnerships
Program, the Emergency Shelter Grant Program, the American Dream Down Payment
Initiative Program, and the Housing Opportunities for Persons with AIDS Program for
Fiscal Years 2015 through 2017 to define their rights and obligations as a prerequisite
to participation in the CDBG program; and
WHEREAS, the City Council adopted Resolution No. 4602 on June 24, 2014 approving
an Agreement to allow the City to continue participation with the County and other
participating cities for Federal CDBG, Home Investment Partnerships (HOME),
Item 8.g. - Page 5
RESOLUTION NO.
PAGE2
Emergency Shelter Grant (ESG) and Housing Opportunities for Persons with Aids
(HOPWA) funding programs; and
WHEREAS, HUD requires the County to amend the Cooperation Agreement to add a
paragraph regarding use of public funds and to provide for a three-year term; and
WHEREAS, the proposed Amendment to the Cooperation Agreement is consistent with
the General Plan and with City and County policies encouraging cooperation between
agencies on issues of regional significance such as affordable housing; and
WHEREAS, the proposed Amendment to the Cooperation Agreement will promote the
public health, safety and welfare by enabling the City and County to participate in the
U.S. Department of Housing and Urban Development's CDBG program under an "urban
county" entitlement, thus making available funds for a variety of housing, economic
development, and public services programs not otherwise available; and
WHEREAS, the City and County enter into yearly subrecipient agreements which
establish administrative policies and procedures, performance standards, and
guidelines for funding specific CDBG programs and projects; and
WHEREAS, the proposed Amendment to the Cooperation Agreement is not a "project"
for purposes of compliance with the provisions of the California Environmental Quality
Act (CEQA) and the City's CEQA Guidelines.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo
Grande, California, as follows:
1. The City Council hereby approves and authorizes the Mayor to sign the
Amendment to the Cooperation Agreement with the County to enable joint
participation in HU D's CDBG program in the form attached hereto as Exhibit A.
2. The City Manager is hereby authorized to act on behalf of the City in connection
with the implementation of the amended Agreement, ongoing operation of the
CDBG program, and other activities necessary to carry out the intent of the
Cooperation Agreement.
On motion of Council Member
following roll call vote, to wit:
AYES:
NOES:
ABSENT:
, seconded by Council Member ',and on the
the foregoing Resolution was passed and adopted this __ day of 2014.
Item 8.g. - Page 6
RESOLUTION NO.
PAGE3
TONYFERRARA,MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, CITY ATTORNEY
Item 8.g. - Page 7
EXHIBIT A
AMENDMENTNUMBER1TO
A COOPERATION AGREEMENT BETWEEN THE COUNTY OF SAN LUIS
OBISPO AND THE CITY OF ARROYO GRANDE FOR JOINT PARTICIPATION
IN THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM,THE
HOME INVESTMENT PARTNERSHIPS PROGRAM, THE EMERGENCY
SOLUTIONS GRANT PROGRAM, AND THE HOUSING OPPORTUNITIES FOR
PERSONS WITH AIDS PROGRAM FOR FISCAL YEARS 2015 THROUGH
2018
THIS AGREEMENT is made and entered into this day of , 2014, by and
between the County of San Luis Obispo, a political subdivision of the State of
California, hereinafter called "County"; and the City of Arroyo Grande, a
municipal corporation of the State of California, located in the County of San Luis
Obispo, hereinafter called "City"; jointly referred to as "Parties."
WITNESS ETH
WHEREAS, in 1974, the U.S. Congress enacted and the President signed a law
entitled, The Housing and Community Development Act of 1974, herein called
the "Act". Said Act is omnibus legislation relating to federal involvement in a wide
range of housing and community development activities and contains eight
separate titles; and
WHEREAS, Title I of the Act is entitled "Community Development" and governs
programs for housing and community development within metropolitan cities and
urban counties or communities by providing financial assistance annually for
area-wide plans and for housing, public services and public works programs; and
WHEREAS, the Community Development Block Grant (CDBG) Program, the
HOME Investment Partnerships (HOME) Program, the Emergency Solutions
Grant (ESG) Program, and the Housing Opportunities for Persons with AIDS
(HO PW A) Program are consolidated under Title I of the Act; and
WHEREAS, the County of San Luis Obispo has requested of the federal
Department of Housing and Urban Development, hereinafter referred to as
"HUD", that the County be designated as an "urban county"; and
WHEREAS, the County needs to requalify as an urban county and will be eligible
to receive CDBG funds provided that the County's entitled cities defer their
entitlement to the County to enable both the County and the entitlement cities to
jointly participate in the program; and
WHEREAS, the City desires to participate jointly with the County in said
program; and
Item 8.g. - Page 8
WHEREAS, on July 15, 2014, the County and City entered into a Cooperation
Agreement (~he Original Cooperation Agreement) in order for the County to
requalify as an urban county and submitted said cooperation agreement to the
U.S. Department of Housing and Urban Development (HUD); and
WHEREAS, HUD reviewed said Original Cooperation Agreement and
determined that it must be amended to provide for a three year term and to
include additional language required by the Transportation, Housing and Urban
Development, and Related agencies Appropriations Act, 2014, Public Law 113-
76.
NOW THEREFORE, in consideration of the mutual promises, recitals and other
provisions hereof, the Parties agree as follows:
1. The first sentence of Paragraph C, entitled "C. Term of Agreement -
Automatic Renewal Provision," of Section I, entitled "SECTION I.
General.," of the Original Cooperation Agreement is hereby amended and
replaced to read as follows:
The term of this Agreement shall be for a period of three (3) years
commencing July 1, 2015 through June 30, 2018.
2. The section entitled "SECTION IV. Use of Program Funds" of the
Original Cooperation Agreement is hereby amended to add a new section
"I" that reads as follows:
I. The City may not sell, trade, or otherwise transfer all or any portion
of CDBG funds to another metropolitan city, urban county, unit of
general local government, or Indian tribe, or insular area that
directly or indirectly receives CDBG funds in exchange for any
other funds, credits or non-Federal considerations, but must use
such funds for activities eligible under Title I of the Act.
3. All other provisions of the Original Cooperation Agreement not specifically
amended herein remain in full force and effect.
NOW, THEREFORE, the Parties hereto have caused this Amendment Number 1
to the Cooperation Agreement to be executed and attested by their proper officer
thereunder duly authorized, and their official seals to be hereunto affixed, all as
of the day first above written.
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Item 8.g. - Page 9
COUNTY OF SAN LUIS OBISPO
Deputy County Counsel
Date: --------------
By: ______________ _
Chairperson of the Board of Supervisors
Date: --------------
ATTEST:
Julie Rodewald, County Clerk
Date: --------------
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Item 8.g. - Page 10
CITY OF ARROYO GRANDE
Tony Ferrara, Mayor
Date: --------------
ATTEST:
Kelly Wetmore, City Clerk
Date: --------------
APPROVED AS TO CONTENT:
Steven Adams, City Manager
Date: --------------
APPROVED AS TO FORM:
Timothy J. Carmel, City Attorney
Date: --------------
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