Consideration and Adoption of Resolution No. 2025-30: A resolution approving the City of Flagstaff's 2025 Annual Action Plan and authorizing its submission to the U.S. Department of Housing and Urban Development (HUD) 
 

1. Read Resolution No. 2025-30 by title only 
2. City Clerk reads Resolution No. 2025-30 (if approved above) 
3. Adopt Resolution No. 2025-30

This staff summary requests City Council approval of the City of Flagstaff's 2025 Annual Action Plan (AAP), a required submission to the U.S. Department of Housing and Urban Development (HUD) in order to receive Community Development Block Grant (CDBG) funding. The AAP outlines how the City will use its anticipated allocation to address Flagstaff's housing, public service, and infrastructure needs, as identified in the 2021-2025 Consolidated Plan. 

The Program Year 2025 AAP details planned investments within Flagstaff City limits to support affordable housing, services for vulnerable populations, and neighborhood improvements in designated low- to moderate-income areas. The plan must be submitted within 60 days of receiving notice of HUD's official entitlement allocation. Timely submission ensures the City remains eligible to receive annual CDBG funding.

Approval of Resolution 2025-XX 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 $656,638.00 for Program Year 2025. 

In addition to the HUD allocation, the City has received $107,893.51 in Program Income and identified $15,277.75 in prior year de-obligated funds. These additional resources increase the total funding available for CDBG-eligible projects to $779,809.26 for Program Year 2025. The proposed allocation accounts for administrative costs and includes a 10% indirect cost rate to reflect the City's associated financial impacts. 

The total FY2025-26 Budget for CDBG activities is $1.12M in account numbers 021-05-108-6105-4 through 021-05-108-6121-4 in the Housing and Community Service Fund.

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)

Priority Based Budgeting

• High Performing Governance
  • Encourage public trust through transparency, accessibility & use of the City’s public participation policy
  • Implement innovative local government programs, new ideas & best practices; be recognized as a model for others to follow
     
•  Safe & Healthy Community
  • Support social services, community partners & housing opportunities
  • Provide alternative responses, resources & programs, inclusive of mental health & other services
     
•  Inclusive & Engaged Community
  • Foster community pride & civic engagement by increasing opportunities for public involvement, in line with best practices & legal requirements
  • Advance social equity & social justice in Flagstaff by supporting social services
  • Facilitate & foster diversity & inclusivity, including support of anti-racist policies & practices
  • Enhance community involvement, education & regional partnerships to strengthen the level of public trust
  • Ensure city facilities, services, & programs are accessible for all residents & representative of Flagstaff’s diverse community
     
•  Sustainable, Innovative Infrastructure
  • Support the community’s social infrastructure needs; assist those partner organizations that provide services the City does not
     
•  Robust Resilient Economy
  • Support & strengthen a more robust, diverse, & sustainable economy in ways that reflect community values & provides for affordable housing opportunities
  • Enhance understanding between the development community, the City & Flagstaff residents
  • Enhance the community’s workforce development programs & improve partnerships with higher education institutions & the private & public sectors
     
•  Livable Community
  • Support regional partners which provide equitable & inclusive educational opportunities for Flagstaff residents of all ages
  • Actively support attainable & affordable housing through City projects & opportunities with developers
     
•  Environmental Stewardship
  • Implement, maintain & further the Climate Action & Adaptation Plan (CAAP) with awareness of social inequities

Regional Plan

• Goal NH.1. Foster and maintain healthy and diverse urban, suburban, and rural neighborhoods in the Flagstaff region.
  • Policy NH.1.1. Preserve and enhance existing neighborhoods.
     
• Goal NH.3. Make available a variety of housing types at different price points, to provide housing opportunities for all economic sectors.
  • Policy NH.3.1. Provide a variety of housing types throughout the City and region, including purchase and rental options, to expand the choices available to meet the financial and lifestyle needs of our diverse population.
  • Policy NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms
     
• Goal NH.4. All housing is safe and sanitary.
  • Policy NH.4.1. Expand the availability of affordable housing throughout the region by preserving existing housing, including housing for very low-income persons. Policy NH.4.2. Reduce substandard housing units by conserving and rehabilitating existing housing stock to minimize impacts on existing residents.
  • Policy NH.4.3. Address accessibility issues and other housing barriers to persons with disabilities or special needs.
  • Policy NH.4.4. Encourage green practices in housing construction and rehabilitation that support durable, healthy, and energy efficient homes.
  • Policy NH.4.5. Renovate the existing housing stock to conserve energy and reduce utility and maintenance costs for owners and occupants.
  • Policy NH.4.6. Consider and integrate public transportation, when possible, in planning housing developments, to help reduce a household’s transportation costs and minimize impact on the community’s roads and transportation system.
  • Policy NH.4.7. Enforce compliance with fair housing laws.
     
• Goal NH.5. Eliminate homelessness.
  • Policy NH.5.1. Provide adequate resources for families with children experiencing homelessness.
  • Policy NH.5.2. Provide adequate resources for individuals experiencing homelessness.
  • Policy NH.5.3. Support and expand programs that prevent homelessness.
  • Policy NH.5.4. Make transitional housing resources available to populations experiencing homelessness

Carbon Neutrality Plan

• Community resilience
  • CR-1: Ensure all mitigation actions improve Flagstaff’s ability to adapt to the future.
  • CR-2: Strengthen existing community systems to create resilience to both short-term shocks and long-term change.
     
• Equitable systems
  • ES-2: Proactively engage community members on an ongoing basis
  • ES-4: Actively seek to recognize past harms, repair trust, and build deeper relationships with community members.

10 Year Housing Plan

• Connect people to equitable housing solutions.
  • Connect 1: Reduce homelessness in the Flagstaff community and seek creative solutions to foster housing permanency for all.
    • Connect 1.3 Continue to support and develop Coordinated Entry as a meaningful process that provides linkages to healthcare, behavioral health, and housing
  • Connect 2: Implement a framework for centering equity in proposed and existing housing practices, policies, and programs.
    • Connect 2.1 Evaluate housing policies and strategies in City of Flagstaff planning documents through an equity lens.
    • Connect 2.2 Encourage community organizations such as local Continuum of Care to continue to integrate equity into programs and policies.
  • Connect 3: Integrate healthcare into housing programs, and housing into healthcare programs, as appropriate.
    • Connect 3.1 Raise awareness of housing security as a social determinate of health
    • Connect 3.2 Encourage neighborhoods, housing types and building practices that increase health.
    • Connect 3.3 Work in partnership with the community to develop and promote community health measurement data collection into housing services when viable
       
• Preserve affordable housing
  • Preserve 1: Encourage the adaptive reuse of buildings.
    • Preserve 2.2 Acquire and rehabilitate already built properties for affordable housing projects when financially feasible.
       
• Protect people from housing discrimination and remove housing barriers.
  • Protect 1: Continue Flagstaff's commitment to further Federal and Arizona Fair Housing laws in all housing-related services and programs, valuing the efforts of those who seek to reduce barriers to equitable housing opportunities, and providing Fair Housing education and resources to the community.

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 27, 2025. 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 22, 2025, work session.

1. Approve Resolution No. 2025-XX and authorize the submission of the Annual Action Plan to HUD. 
2. Modify Resolution No. 2025-XX and authorize the submission to HUD. 
3. Not approve Resolution No. 2025-XX and risk losing the 2025 and future CDBG allocations. 

To receive CDBG funding, the City of Flagstaff must complete and submit the 2025 Annual Action Plan (AAP) to the U.S. Department of Housing and Urban Development (HUD) within sixty days of receiving the official entitlement allocation notification. The AAP outlines how the City will use its CDBG funds in the upcoming Program Year to address the housing, public service, and infrastructure needs identified in the 2021-2025 Consolidated Plan.

As part of the 2025 CDBG process, the Flagstaff Housing Office released a Notice of Funding Availability (NOFA) on February 6, 2025. In response, the City received five external proposals for eligible activities. In addition, staff have submitted a request for an internal community benefit project. 

Housing staff reviewed each proposal for eligibility and conducted risk assessments of the proposed activities and the applying organizations. Federal funding requires specialized administrative capacity to ensure projects are compliant and funds are expended in a timely and appropriate manner. A Ranking Committee, composed of three community representatives and two City staff, evaluated and ranked the external proposals by consensus. These rankings serve as a combined risk and benefit assessment and help inform staff recommendations to the Housing Commission and ultimately City Council. 

Below is a list of the proposals in ranking order. Per HUD guidelines, proposals are grouped into Housing and Public Service categories, which are subject to different funding limits and evaluation criteria. Internal proposals, such as those submitted by City departments, are not ranked competitively due to their low-risk status.

Housing Activities	Proposed Project	Requested Funding	Ranking
Housing Solutions of Northern Arizona	Acquisition of Affordable Rental Units	$280,000.00	137.5
City of Flagstaff	Community Benefit Project - Park/Playground Improvements in Target Neighborhoods	n/a	NR

Public Service Activities	Proposed Program	Requested Funding	Ranking
Northland Family Help Center	Youth Case Management	$55,000.00	140.1
Homeless Youth Connection	Empowering Youth for the Future	$40,000.00	127.6
Community Assistance Teams of Flagstaff	C.A.T.S. on Wheels	$30,000.00	125.5
Tynkertopia	TynkerSpace Initiative	$120,000.00	121.9

To continue receiving Community Development Block Grant (CDBG) funding, the City of Flagstaff must submit an Annual Action Plan (AAP) to HUD that outlines how federal funds will be used in the upcoming year and how proposed activities align with the goals identified in the 2021-2025 Consolidated Plan. 

The City of Flagstaff 2021-2025 Consolidated Plan was developed through a comprehensive process that included community needs assessments, housing market analysis, and extensive public and stakeholder engagement, gathered through surveys, public meetings, as well as a formal 45-day comment period. The resulting data helps prioritize funding decisions and guides which populations and activities are most likely to be served with available federal resources. 

HUD requires that all activities in the Consolidated Plan be assigned one of two priority levels: 

• High Priority (H): Activities the City is most likely to fund with CDBG dollars over the five-year planning period. 
• Low Priority (L): Activities that may be funded if resources become available. 

These priority levels do not reflect a lack of need but are based on anticipated capacity and funding constraints. 

HUD also identifies several Special Populations as presumed low- and moderate-income. These include seniors, severely disabled adults, persons living with HIV/AIDS, survivors of domestic violence, abused children, individuals experiencing homelessness, illiterate adults, and migrant farm workers. Activities that serve these groups are tracked and reported accordingly. 

The summary table below outlines the Consolidated Plan's five-year goals, corresponding eligible activities, priority levels, and numeric targets. It also indicates which activities are intended to serve Special Populations. The table's format follows HUD's requirements for consistency and reporting purposes.

5-Year Consolidated Plan Goals
Activities	Special Population	Priority Level	5-Year Goal
Neighborhood Revitalization, Public Facilities & Infrastructure
Neighborhood Facility and Infrastructure Improvements		High	3,000 Individuals
Public Facilities	X	High	100 Individuals
Acquisition for Affordable Housing Development		Low	3 Units
Public Services & Economic Opportunities
Services to Meet Basic Needs	X	High	300 Individuals
Workforce Development	X	Low	15 Individuals
Housing Stabilization		High	50 Individuals
Addressing Homelessness
Service and Facility Operating Support	X	High	1,500 Individuals
Increase Shelter Beds/Units		High	15 Beds/Units
Providing Decent Affordable Housing
Housing Rehabilitation	X	High	20 Units
Housing Development		High	3 Units
Housing Assistance		High	50 Households

The Community Development Block Grant (CDBG) entitlement amount for Program Year 2025 is $656,638.00. In addition to the anticipated HUD allocation, the City of Flagstaff has received $107,893.51 in Program Income and identified $15,277.75 in prior year de-obligated funds, increasing the total funding available to $779,809.26 for CDBG-eligible projects in Program Year 2025. This amount includes administrative costs and applies a 10% indirect cost rate to account for City financial impacts.

2025 CDBG Funding Recommendations

Funding recommendations are developed through a detailed process that includes an eligibility review, risk assessment, and evaluation against federal CDBG regulations. Proposals are also assessed for alignment with City Council CDBG priorities and the goals established in the 2021-2025 Consolidated Plan.

To support this process, a Ranking Committee composed of community members, representatives from the Housing Commission, and key City staff members reviews all eligible proposals and ranks them using a consensus-based approach. Rankings serve as both a benefit and risk assessment and inform staff funding recommendations.

Below is the CDBG funding available and associated recommendations for the 2025 Annual Action Plan:

2025 Funding Available
PY 2025 Entitlement Allocation	$656,638.00
Program Income (PI) Prior Year Funds	$107,893.51 $15,277.75
Total Funding Available for Allocation	$779,809.26

Administration and Indirect (20% Maximum)
Grant Compliance and Administration City of Flagstaff Indirect - 10%	$67,100.00 $77,900.00
Total Administration and Indirect*	$145,000.00

*Rounded down to ensure compliance with 15% Public Services Cap

Public Service Funding Recommendation
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 2025, this cap amounts to $1,679.73. To ensure compliance with the 15% limit, staff recommends allocating $114,000 (rounded down slightly) to support public service projects. 

To maximize the use of limited public service funds, staff proposes funding the highest-ranked applications in full and allocating the remaining available funds to the 3rd ranked application. This approach ensures that the City utilizes the maximum allowable public services funding while supporting critical services to vulnerable populations.

Below are the funding recommendations for the Public Service Category:

Public Service Activities (15%)	Proposed Program	Requested Funding	Staff Recommendation	Ranking
Northland Family Help Center	Youth Case Management	$55,000.00	$55,000.00	140.1
Homeless Youth Connection	Empowering Youth for The Future	$40,000.00	$40,000.00	127.6
Community Assistance Teams of Flagstaff	C.A.T.S on Wheels	$30,000.00	$19,000.00	125.5
Tynkertopia	TynkerSpace Initiative	$120,000.00	$0	121.9
Total Public Service Allocation			$114,000.00*

*Rounded down to ensure compliance with 15% Public Services Cap

Housing Activity Funding Recommendation

Housing Activities	Proposed Project	Requested Funding	Staff Recommendation	Ranking
Housing Solutions of Northern Arizona	Acquisition of Affordable Rental Units	$280,000.00	$280,000.00	137.5
City of Flagstaff	Playground Improvements in Brannen Homes	Not Applicable	$240,809.26	Not Ranked
Total Housing Activity Allocation			$520,809.26

2025 CDBG Funding Allocation Recommendations
Proposed Project/Program	Recommended Funding	Beneficiaries	Con Plan Activity	Con Plan 5-Year Goal
Housing Solutions of Northern Arizona - Acquisition of Rental Units	$280,000.00	Two permanently affordable rental units - Two households initially	Housing Development	3 Units
City of Flagstaff - Playground Improvements in Brannen Homes	$181,171.26	Area Benefit - 126 Households in Brannen Homes - 1,319 Individuals in the Pine Knoll Target Area	Neighborhood Facility and Infrastructure Improvements	3,000 Individuals
Northland Family Help Center - Youth Shelter Case Management	$57,500.00	50 Youth Experiencing Homelessness and/or Child Abuse	Service and Facility Operating Support	1,500 Individuals
Homeless Youth Connection - Empowering Youth for The Future	$42,500.00	30 Youth Experiencing Homelessness	Services to Meet Basic Needs  Workforce Development	315 Individuals
Total Housing Activities			$520,809.26
Total Public Service Activities			$114,000.00
Total Administration and Indirect			$145,000.00
Total 2025 CDBG Allocation			$779,809.26
Total Individuals Proposed to be Served			Two Units Created & 1,401 Individuals Benefited

Public participation is a core component of the CDBG Annual Action Plan process, and the City of Flagstaff follows the Council-adopted CDBG Citizen Participation Plan to ensure transparency, collaboration, and equitable access to information and decision-making. Community engagement includes public meetings, open proposal processes, a ranking committee with community representation, Housing Commission review, and formal public comment periods. 

To prepare the Program Year 2025 Annual Action Plan (AAP), the City conducted outreach to neighborhood organizations, social service providers, and the general public. Staff held three public meetings to gather input on past project performance and future community priorities. These meetings addressed the estimated CDBG allocation (including program income and prior year funds), eligible activities, and the focus on low- and moderate-income households.

Public Participation Meetings

January 30, 2025 – Community Input Meeting at Market of Dreams

• Provided overview of the Consolidated Plan and Annual Action Plan
• Discussed the estimated amount of CDBG funds and eligible uses
• Solicited input on community needs and priorities
• Engaged with City departments (Capital Improvements, Planning, and PROSE) regarding City projects in target areas

February 6, 2025 – Public Meeting at City Hall

• Detailed the Annual Action Plan and Notice of Funding Available (NOFA)
• Reviewed eligible activities and anticipated funding
• Provided guidance on the open proposal process and access to application materials
• Collected additional public comments

March 6, 2025 – Public Comment Meeting at City Hall

• Presented proposals received and the draft Annual Action Plan
• Open discussion of proposed activities and anticipated community benefits
• Addressed anti-displacement policy and estimated benefit to low-income populations

Open Grant Process

• NOFA Released: January 30, 2025
• Proposals Due: March 3, 2025
• Proposal Ranking Committee (community and staff): March 19, 2025

Public Review and Recommendations

Public Comment Period on Draft AAP

• March 15 – April 15, 2025
• Posted on the City of Flagstaff Housing Office website

March 27, 2025 – Housing Commission Meeting

• Staff presentation of the draft Annual Action Plan and funding recommendations
• Public hearing and opportunity for community input
• Housing Commission recommendation for Council approval

April 22, 2025 – City Council Work Session

• Presentation of draft Annual Action Plan and recommended allocations
• Discussion and input from City Council
• Public comment accepted in person or via email/mail

June 3, 2025 – City Council Regular Meeting

• Consideration and approval of Resolution No. 2025-XX to authorize submission of the Annual Action Plan to HUD

The proposed 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. Once the City receives its official entitlement allocation from HUD, the proposed funding amounts will be adjusted accordingly. Staff will maximize the allowable funding in the Public Service (15%) and Planning and Administration (20%) categories, and increase or decrease external application funding in equal amounts. Any remaining adjustments will be made to the internal community benefit projects to ensure full utilization of funds.

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, the recommended allocations reflect the most efficient and impactful use of available resources. The proposed funding prioritizes 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.