11.C.
City Council Meeting - FINAL
- Meeting Date:
- 05/19/2026
- From:
- Kristine Pavlik, Housing and Grants Administrator
TITLE:
Consideration and Adoption of Resolution No. 2026-24:
A resolution approving the City of Flagstaff's 2026 Annual Action Plan allocations and authorizing its submission to the U.S. Department of Housing and Urban Development (HUD).
STAFF RECOMMENDED ACTION:
- Read Resolution No. 2026-24 by title only
- City Clerk reads Resolution No. 2026-24 (if approved above)
- Adopt Resolution No. 2026-24
Executive Summary:
The City of Flagstaff receives an annual allocation of Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD) on a Program Year basis (July 1 – June 30). The purpose of the CDBG program is to develop viable urban communities by providing decent, affordable housing, a suitable living environment, and expanded economic opportunity, principally for low- and moderate-income persons. In Flagstaff, for 2026, low- and moderate-income households are defined as those at or below 80% of Area Median Income, which for a four-person household is $89,600.
To receive CDBG funding, the City must complete and submit an Annual Action Plan (AAP) to HUD. This staff summary requests City Council approval of the City of Flagstaff’s 2026 Annual Action Plan funding allocations. The AAP is a required submission that outlines how the City will use its anticipated allocation to address housing, public service, and infrastructure needs identified in the 2026–2030 Consolidated Plan. The Program Year 2026 AAP details planned investments within Flagstaff City limits to support affordable housing, services for vulnerable populations, and neighborhood improvements in low- to moderate-income areas.
The Annual Action Plan must be submitted to HUD within 60 days of receiving notice of the annual entitlement allocation. Allocations were released on April 3, 2026, and the City’s AAP is due to HUD on June 2, 2026. Timely submission ensures the City remains eligible to receive annual CDBG funding.
To receive CDBG funding, the City must complete and submit an Annual Action Plan (AAP) to HUD. This staff summary requests City Council approval of the City of Flagstaff’s 2026 Annual Action Plan funding allocations. The AAP is a required submission that outlines how the City will use its anticipated allocation to address housing, public service, and infrastructure needs identified in the 2026–2030 Consolidated Plan. The Program Year 2026 AAP details planned investments within Flagstaff City limits to support affordable housing, services for vulnerable populations, and neighborhood improvements in low- to moderate-income areas.
The Annual Action Plan must be submitted to HUD within 60 days of receiving notice of the annual entitlement allocation. Allocations were released on April 3, 2026, and the City’s AAP is due to HUD on June 2, 2026. Timely submission ensures the City remains eligible to receive annual CDBG funding.
The City of Flagstaff has received notice that its entitlement allocation for Program Year 2026 is $681,196. In addition to HUD entitlement funds, the City may also include program income and de-obligated prior year funds to increase the total funding available for allocation. These additional funds include $154,000 in prior year funds and $46,000 in program income, resulting in a total of $881,196 available for CDBG-eligible projects in the 2026 Program Year.
The funding allocations identified for the Program Year 2026 Annual Action Plan align with the goals outlined in the 2026-2030 Consolidated Plan and result from a comprehensive evaluation process that includes public input, proposal rankings, and community priorities.
| Program Year 2026 CDBG Funding Allocations | |
| Ponderosa Park Reconstruction | $500,000.00 |
| Murdoch Resilience Hub Improvements | $77,000.00 |
| ADA Improvements at the Sustainability Office | $49,196.00 |
| Total Public Improvements Activities | $626,196.00 |
| Flagstaff Shelter Services - Operations at The Lantern | $54,500.00 |
| Northland Family Help Center - DV Shelter Case Management | $54,500.00 |
| Total Public Services Activities | $109,000.00 |
| Total Administration and Indirect | $146,000.00 |
| Total Program Year 2026 CDBG Allocation | $881,196.00 |
Financial Impact:
Approval of the resolution is essential for the City of Flagstaff to receive its annual Community Development Block Grant (CDBG) entitlement allocation, which the U.S. Department of Housing and Urban Development (HUD) has indicated is $681,196.00 for Program Year 2026.
In addition to the HUD allocation, the City has received $46,000.00 in Program Income and identified $154,000.00 in prior year de-obligated funds. These additional resources increase the total funding available for CDBG-eligible projects to $881,196.00 for Program Year 2026. The proposed allocation accounts for administrative costs and includes a 10% indirect cost rate to reflect the City's associated financial impacts.
The total FY2026-27 Budget for CDBG activities is in account numbers 021-13-108-6105-4 through 021-13-108-6121-4 in the Housing and Community Service Fund.
Policy Impact:
The Flagstaff City Council’s CDBG Priorities (established January 2025):
- Provide affordable housing (rental and homeownership)
- Address homelessness
- Support neighborhood revitalization
- Workforce development (including job training and lifespan education)
Previous Council Decision or Community Discussion:
Staff received Council direction on Community Development Block Grant (CDBG) priorities during the January 14, 2025, Council meeting. These priorities are reflected in this staff summary's Policy Impact and Background/History sections.
Housing staff presented an overview of the CDBG applications received, along with recommendations from the ranking committee, to the Housing Commission on March 26, 2026. The Housing Commission unanimously voted to forward the recommendations to City Council with a recommendation for approval.
Staff presented the proposed funding allocations detailed in this Staff Summary to City Council during the April 14, 2026, work session.
Housing staff presented an overview of the CDBG applications received, along with recommendations from the ranking committee, to the Housing Commission on March 26, 2026. The Housing Commission unanimously voted to forward the recommendations to City Council with a recommendation for approval.
Staff presented the proposed funding allocations detailed in this Staff Summary to City Council during the April 14, 2026, work session.
Options and Alternatives to Recommended Action:
- Approve Resolution and authorize the submission of the Annual Action Plan to HUD.
- Modify Resolution and authorize the submission to HUD.
- Not approve Resolution and risk losing the 2026 and future CDBG allocations.
Background and History:
As part of the 2026 CDBG process, the Flagstaff Housing Division released a Notice of Funding Availability (NOFA) on January 29, 2026. In response, the City received six external proposals and three internal requests for eligible activities by the February 25, 2026 deadline.
Housing staff are responsible for determining eligibility and conducting risk assessments of both proposed projects and applicant agencies. The administration of federal funds requires sufficient organizational capacity to ensure compliance and timely expenditures. In addition, a Ranking Committee composed of four community representatives and two City staff members met to review the external proposals and develop consensus-based rankings. These rankings primarily serve as a risk-and-benefit assessment and provide key input into staff recommendations.
The CDBG funding available for the 2026 Annual Action Plan is outlined in detail below:
| Program Year 2026 Entitlement | $681,196.00 |
| Program Income | $46,000.00 |
| Prior Year Funds | $154,000.00 |
| Total Funding Available for Allocation | $881,196.00 |
Planning and Administration Funding Allocation
Under federal CDBG regulations, no more than 20% of the annual entitlement allocation, plus projected program income, may be used for Planning and Administration activities. For Program Year 2026, this cap allows for a maximum of $146,239.20 to be allocated for administrative costs. Slightly less than the maximum allowable will be allocated to the administration and indirect categories to ensure compliance with the 20% limit.
Under federal CDBG regulations, no more than 20% of the annual entitlement allocation, plus projected program income, may be used for Planning and Administration activities. For Program Year 2026, this cap allows for a maximum of $146,239.20 to be allocated for administrative costs. Slightly less than the maximum allowable will be allocated to the administration and indirect categories to ensure compliance with the 20% limit.
| Grant Compliance and Administration | $68,000.00 |
| Indirect - 10% | $78,000.00 |
| Total Administration and Indirect* | $146,000.00 |
Public Services Funding Allocation
Under federal CDBG regulations, no more than 15% of the annual entitlement and prior year program income may be used for Public Service activities. For Program Year 2026, this cap amounts to $109,079.40. To ensure compliance with the 15% limit, $109,000 (rounded down slightly) will be allocated to support public service projects.
| Applicant | Proposed Program | Requested Funds | Averaged Ranking | Allocated Funds |
| Flagstaff Shelter Services | Operations at The Lantern | $60,000.00 | 142/150 | $54,500.00 |
| Northland Family Help Center | DV Shelter Case Management | $62,737.50 | 142/150 | $54,500.00 |
| Terros Health | Crisis-to-Recovery Navigation | $65,805.00 | 137/150$0 | $0 |
| Boys and Girls Club of Flagstaff | Childcare Scholarships | $67,250.00 | 130/150 | $0 |
| Coconino County Health and Human Services | Senior Nutrition Program | $41,616.00 | 129/150 | $0 |
| Tynkertopia | Programming at Siler Homes | $60,000.00 | 117/150 | $0 |
| Total Public Services Allocation (20% Maximum)* | $109,000.00 | |||
Public Improvements/Housing Activity Funding Allocation
After the above allocations to Administration and Public Services, $626,196.00 in CDBG funding remains available for Housing, Public Facility, and Infrastructure Improvement Activities. The allocation below includes funding for the reconstruction of Ponderosa Park in the Sunnyside neighborhood, improvements to the Murdoch Center Resilience Hub in the Southside neighborhood, and the removal of architectural barriers at the City of Flagstaff Sustainability offices.
After the above allocations to Administration and Public Services, $626,196.00 in CDBG funding remains available for Housing, Public Facility, and Infrastructure Improvement Activities. The allocation below includes funding for the reconstruction of Ponderosa Park in the Sunnyside neighborhood, improvements to the Murdoch Center Resilience Hub in the Southside neighborhood, and the removal of architectural barriers at the City of Flagstaff Sustainability offices.
| Requesting Division | Proposed Project | Requested Funds | Allocated Funds |
| PROSE (Parks, Recreation, Open Space, and Events) | Reconstruction of Ponderosa Park | $500,000.00 | $500,000.00 |
| Sustainability | Murdoch Resilience Hub Improvements | $77,000.00 | $77,000.00 |
| Sustainability | ADA Improvements at the Sustainability Office | $48,750.00 | $49,196.00 |
| Total Public Improvements Allocation | $626,196.00 | ||
The chart below compares each project's intended impact and the number of beneficiaries with the goals outlined in the 2026-2030 Consolidated Plan (ConPlan) to demonstrate the Community Benefit of the CDBG funding allocations.
| Program Year 2026 CDBG Funding Allocations | |||
| Project/Program | ConPlan Goal | Proposed Beneficiaries | Allocated Funds |
| Flagstaff Shelter Services Operations at The Lantern | Public Services for LMI & Special Needs Populations | 300 Individuals (Homeless) | $54,500.00 |
| Northland Family Help Center DV Shelter Case Management | Public Services for LMI & Special Needs Populations | 90 Individuals (DV/Homeless) | $54,500.00 |
| PROSE Ponderosa Park Reconstruction (Sunnyside) | Improve Public Facilities and Infrastructure | 4,435 Households | $500,000.00 |
| Sustainability Murdoch Resilience Hub Improvements (Southside) | Improve Public Facilities and Infrastructure | 2,650 Households | $77,000.00 |
| Sustainability Offices ADA Improvements | Improve Public Facilities and Infrastructure | Residents Citywide | $49,196.00 |
These funding allocations align with the goals outlined in the 2021–2025 Consolidated Plan and are the result of a comprehensive evaluation process, including public input, proposal rankings, and community priorities. Given the limited CDBG funding available and the regulatory framework established by HUD, few alternative funding approaches would better address the immediate needs of Flagstaff’s low- to moderate-income residents. While other strategies were considered, these allocations reflect the most efficient and impactful use of available resources. These funding allocations prioritize projects with the greatest potential for long-term benefit to the community, particularly in areas of housing, public services, and neighborhood improvements. Additionally, the inclusion of internal community benefit projects, such as park and playground improvements, ensures that the funding addresses a diverse range of needs across the City.
Connection to PBB Priorities and Objectives:
The 2026 Community Development Block Grant (CDBG) Annual Action Plan (AAP) supports several of the City’s Priority Based Budgeting (PBB) priorities by directing funding toward community-identified needs, particularly homelessness response, public services, and neighborhood improvements. Investments in shelter operations and coordinated services align with the Safe & Healthy Community priority by supporting social services, housing stability, and alternative response systems that include behavioral health resources. These efforts also support an Inclusive & Engaged Community by advancing social equity and ensuring that services are accessible to low- and moderate-income residents and other vulnerable populations.
In addition, investments in public facilities and infrastructure—such as park improvements and community facility upgrades—support both Livable Community and Sustainable, Innovative Infrastructure priorities by enhancing community spaces and supporting partner organizations that provide critical services. ADA improvements and the removal of architectural barriers further advance Inclusive & Engaged Community goals by ensuring City facilities and programs are accessible to all residents. Resilience-focused investments at community facilities also support Environmental Stewardship by aligning with the City’s climate and adaptation efforts. Overall, the 2026 AAP reflects a coordinated approach to delivering services, improving infrastructure, and supporting community partners in a way that aligns with the City’s broader PBB priorities.
In addition, investments in public facilities and infrastructure—such as park improvements and community facility upgrades—support both Livable Community and Sustainable, Innovative Infrastructure priorities by enhancing community spaces and supporting partner organizations that provide critical services. ADA improvements and the removal of architectural barriers further advance Inclusive & Engaged Community goals by ensuring City facilities and programs are accessible to all residents. Resilience-focused investments at community facilities also support Environmental Stewardship by aligning with the City’s climate and adaptation efforts. Overall, the 2026 AAP reflects a coordinated approach to delivering services, improving infrastructure, and supporting community partners in a way that aligns with the City’s broader PBB priorities.
Connection to Regional Plan:
The 2026 Community Development Block Grant (CDBG) Annual Action Plan (AAP) supports the City of Flagstaff Regional Plan by prioritizing investments that strengthen neighborhoods, expand access to services, and address homelessness. A significant portion of this year’s funding supports shelter operations and coordinated services, directly aligning with Goal NH.5 by providing resources for individuals and families experiencing homelessness and supporting programs that help prevent and reduce homelessness. These investments also contribute to Goal NH.1 by supporting healthy and stable neighborhoods through services that improve housing stability and overall community well-being.
In addition, investments in public facilities and infrastructure—particularly park improvements and community facility upgrades—support Goals NH.1 and NH.4 by enhancing existing neighborhoods and improving access to safe, functional, and accessible community spaces. ADA improvements and the removal of architectural barriers align with Policy NH.4.3 by addressing accessibility needs for persons with disabilities, while broader facility upgrades support healthy, resilient environments. While CDBG funding for housing development is limited, these investments complement Goal NH.3 and NH.4 by supporting housing stability, preserving community assets, and ensuring that low- and moderate-income residents have access to safe, inclusive, and well-maintained neighborhoods.
In addition, investments in public facilities and infrastructure—particularly park improvements and community facility upgrades—support Goals NH.1 and NH.4 by enhancing existing neighborhoods and improving access to safe, functional, and accessible community spaces. ADA improvements and the removal of architectural barriers align with Policy NH.4.3 by addressing accessibility needs for persons with disabilities, while broader facility upgrades support healthy, resilient environments. While CDBG funding for housing development is limited, these investments complement Goal NH.3 and NH.4 by supporting housing stability, preserving community assets, and ensuring that low- and moderate-income residents have access to safe, inclusive, and well-maintained neighborhoods.
Connection to Carbon Neutrality Plan:
In addition, CDBG funding for ADA improvements and the removal of architectural barriers at the Sustainability Office supports the Plan’s emphasis on equity by ensuring that climate programs, services, and resources are accessible to all residents. These investments reflect a broader approach of integrating sustainability with accessibility and community need, while improving the usability and inclusivity of public facilities. Together, these projects show how the 2026 AAP supports the Carbon Neutrality Plan through practical, place-based investments that strengthen resilience and expand access to City resources.
Connection to 10-Year Housing Plan:
The 2026 Community Development Block Grant (CDBG) Annual Action Plan (AAP) supports the City of Flagstaff’s 10-Year Housing Plan by focusing on reducing homelessness, improving access to services, and supporting housing stability for low- and moderate-income residents. A large portion of this year’s funding is dedicated to homelessness response through shelter operations and coordinated services, aligning with Connect 1 and Connect 1.3 by strengthening Coordinated Entry and improving connections to housing, healthcare, and behavioral health resources. Public service investments and partnerships with local providers also support Connect 3 by recognizing housing as a key driver of health and stability.
In addition, investments in public facilities and infrastructure—particularly park improvements and community facility upgrades—support broader goals related to community health, access, and equity, as reflected in Connect 2, Connect 3, and Protect 2. These projects improve the quality and usability of spaces in low- and moderate-income areas while ensuring they are safe and accessible. The City’s continued focus on fair housing education, inclusive service delivery, and coordination with community partners also supports Protect 3 strategies by working to reduce barriers and improve access for disproportionately impacted populations, including individuals with limited English proficiency. Together, these investments show how the Program Year 2026 AAP advances key strategies from the 10-Year Housing Plan into action through targeted, community-based funding.
In addition, investments in public facilities and infrastructure—particularly park improvements and community facility upgrades—support broader goals related to community health, access, and equity, as reflected in Connect 2, Connect 3, and Protect 2. These projects improve the quality and usability of spaces in low- and moderate-income areas while ensuring they are safe and accessible. The City’s continued focus on fair housing education, inclusive service delivery, and coordination with community partners also supports Protect 3 strategies by working to reduce barriers and improve access for disproportionately impacted populations, including individuals with limited English proficiency. Together, these investments show how the Program Year 2026 AAP advances key strategies from the 10-Year Housing Plan into action through targeted, community-based funding.
Connection to Division Specific Plan:
The 2026 Community Development Block Grant (CDBG) Annual Action Plan (AAP) implements the priorities identified in the 2026–2030 Consolidated Plan by directing funding toward public services, public facility improvements, and program administration that benefit low- and moderate-income residents. Investments in homelessness response and supportive services directly align with the goal of providing public services for low- and moderate-income and special needs populations by improving access to shelter, case management, and coordinated systems of care. These efforts support housing stability and help connect individuals and families to longer-term housing opportunities.
In addition, investments in public facilities and infrastructure—such as park improvements and community facility upgrades—advance the goal of improving public facilities and infrastructure by enhancing safety, accessibility, and overall quality of life in low- and moderate-income areas. ADA improvements and resilience-focused upgrades further support equitable access to community spaces and services. Together, these investments reflect a balanced approach to addressing community needs while ensuring the effective administration of CDBG funds in alignment with Consolidated Plan priorities.
In addition, investments in public facilities and infrastructure—such as park improvements and community facility upgrades—advance the goal of improving public facilities and infrastructure by enhancing safety, accessibility, and overall quality of life in low- and moderate-income areas. ADA improvements and resilience-focused upgrades further support equitable access to community spaces and services. Together, these investments reflect a balanced approach to addressing community needs while ensuring the effective administration of CDBG funds in alignment with Consolidated Plan priorities.
Attachments
- Res. 2026-24
- PY26 Annual Action Plan DRAFT
- Summary of 2026 CDBG Proposals
- CDBG PY26 AAP Council Presentation