Consideration and Adoption of Resolution No. 2017-16: A resolution approving the City of Flagstaff 2017/2018 Annual Action Plan and authorizing its submission to the U.S. Department of Housing and Urban Development (HUD).

This staff summary is for the approval of the City of Flagstaff’s 2017-2018 Annual Action Plan that is a required submission to the U.S. Department of Housing and Urban Development (HUD) as part of the Community Development Block Grant (CDBG). This document identifies how the 2017 CDBG allocation is addressing Flagstaff’s community needs identified in the 2016-2020 Consolidated Plan and how funding will be distributed within Flagstaff city limits.

The plan describes how CDBG funds will be used in the Flagstaff community during the coming year and how the anticipated annual award will be allocated. The plan is due to HUD once the City of Flagstaff Housing Section receives notice of its 2017 allocation. As of the date of this report, the Housing Section has not been notified of Flagstaff’s 2017 allocation. However, we have received guidance from HUD that the City should anticipate its 2017 allocation to be a similar amount of funding as last year’s (2016) federal allocation.

Funding recommendations are proposed to City Council starting with the highest ranked proposal and most impactful internal city projects. Should funding increase, all proposals would receive funding. Included would be two internal projects in the Pine Knoll Neighborhood; installation of missing curb, gutter and sidewalk, as well as transitioning an informal trail into a part the Flagstaff’s Urban Trail System between Arroyo Park and Kinsey school. If the City’s entitlement were to decrease, the funding would go toward the highest ranked proposals until the allocation zeros out. If funding were to be eliminated, no agencies would receive CDBG funding.

Approval of the above resolution is critical to the City of Flagstaff receiving its annual CDBG entitlement allocation. The 2017/2018 CDBG estimated allocation is $599,000. In addition, the City of Flagstaff is able to combine program income and reallocated funds from previous years to increase funding available for projects. Those additional funds equal $177,433.20. Therefore, an estimated grand total of $776,433.20 is available for the 2017/2018 program year through the Annual Action Plan process.

The above allocation takes into consideration the City’s financial impacts by including the estimated indirect rate of 10%.

COUNCIL GOALS:
AFFORDABLE HOUSING
Increase the inventory of permanent affordable housing for renters and home ownership in the community.

TRANSPORTATION AND OTHER PUBLIC INFRASTRUCTURE
Deliver quality community assets and continue to advocate and implement a highly performing multi-modal transportation system.

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.3.3. 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.4.3.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.4.7. 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.

City Council approved the 5-year Consolidated Plan in April of 2016, all activities meet goals and objectives of this plan.  Additionally, every two years, staff requests funding guidance from Council on CDBG Priorities and the overall CDBG process for the coming two years.  In January 2017 Council learned how CDBG serves low-to-moderate income individuals and established three priorities:

A)  Approve Resolution No. 2017-16 and authorize the submission of the Annual Action Plan to HUD after the City of Flagstaff receives its 2017 allocation.
B)  Modify Resolution No. 2017-16 and authorize the submission to HUD.
C) Not approve Resolution No. 2017-16 and risk losing the 2017 CDBG allocation.

In order to receive CDBG funding, the City must complete and submit to HUD the required 2017-2018 Annual Action Plan 60 days after Flagstaff’s allocations are announced, or on August 16, 2017 (whichever comes first). This plan describes how CDBG funds will be used in the coming year and how the annual allocation will be allocated.

In the 2017 CDBG process, five external agency proposals were received with one agency self withdrawing.  There were also six internal City of Flagstaff requests. Housing staff are responsible for determining whether a proposed activity is eligible, conducting a risk assessment of the project and applying agency. Federal funds require administrative knowledge, capacity to ensure compliance and a timely expenditure of funds.  A ranking committee comprised of four community representatives (one non-profit representative, one neighborhood association leader, one NAU sociology professional and one external grants representative) and four City staff met to review the external proposals and rank them by consensus. Rankings are created primarily to serve as a risk and benefit assessment and are the guiding input for staff recommendations forwarded to City Council.

Below is a list of the proposals in order of ranking. The proposals are divided between Housing and Public Service categories as they have two separate funding limits and different criteria. Internal City of Flagstaff proposals are presented to meet City Council priorities or other unmet needs in the community and are not ranked (NR) competitively with the other proposals, since the City would administer these projects directly. A comprehensive Proposal Book that includes each of the below proposals was distributed to Council on April 17, 2017.

 

Housing Activities	Proposal/Project	Request	Ranking
Northland Family Help Center	Domestic Violence & Youth Shelter Rehabilitation	$36,217.00	139
Housing Solutions of NA	Sharon Manor Minor Rehabilitation	$139,083.00	119
City Of Flagstaff - La Plaza Vieja	Guadalupe Park Rehabilitation & ADA Improvement	$158,422.00	NR
City Of Flagstaff - La Plaza Vieja	Blackbird Street Improvement & ADA	$24,300.00	NR
City Of Flagstaff - Pine Knoll Phase I	Arroyo Park Paving & O'Leary Infrastructure Connectivity Improvement	$97,600.00	NR
City of Flagstaff - Southside Phase I	Ellery Infrastructure Improvement	$75,000.00	NR
City Of Flagstaff - Southside Phase II	Verde Street Infrastructure	$7,500.00	NR
City of Flagstaff - Pine Knoll Phase II	Brannen Infrastructure & Arroyo FUTS path	$52,833.00	NR
Public Service Activities	Proposal/Project	Request	Ranking
Coconino County Community Services	Housing Stabilization	$40,000.00	146
Flagstaff Shelter Services	Front Door	$57,794.00	134

In order to receive CDBG funding, the City must complete an Annual Action Plan that describes how CDBG funds will be used in the coming year and how the activities will accomplish goals outlined in the 2016-2020 Consolidated Plan. The creation of the Consolidated Plan is an extensive process involving public and stakeholder input (gathered through surveys, public meetings and a 45 day public comment period), community needs assessments and a housing market analysis.  All activities recommended for funding meet goals and objectives identified in the Consolidated Plan.

Funding Caps
HUD has two funding caps with regard to the use of CDBG funds. Public Service expenditures are capped at 15% of the allocation and Program Administration is capped at 20% of the allocation. The rest of the available funding can be spent on Housing/Economic Development Activities.

Public Service Funding Recommendation
Federal CDBG regulations do not allow more than 15% of funds to be spent on Public Service Activities; $97,794.00 for Program Year 17/18. Below are the funding recommendations for the Public Service Category:

Public Service Activities	Proposal/Project	Request	Ranking
Coconino County Community Services	Housing Stabilization	$40,000.00	146
Flagstaff Shelter Services	Front Door	$57,794.00	134

Housing Funding Recommendation
There is an anticipated $548,248.00 in CDBG funds available for Housing Activities.  Below are the funding recommendations for the Housing Category.  As only estimates for funding levels are currently available, an unfunded activity is listed in the chart. Should a larger an amount larger than the estimate be received, this activity will receive funding.
 

Housing Activities	Proposal/Project	Request	Ranking
Northland Family Help Center	Domestic Violence & Youth Shelter	$36,217.00	139
Housing Solutions of NA	Sharon Manor Minor Rehabilitation	$139,083.00	119
City of Flagstaff - La Plaza Vieja	Guadalupe Park Rehabilitation & ADA Improvement	$158,422.00	NR
City of Flagstaff - La Plaza Vieja	Blackbird Street Improvement & ADA	$24,300.00	NR
City of Flagstaff - Pine Knoll Phase I	Arroyo Park Paving & O'Leary Infrastructure Connectivity Improvement	$97,600.00	NR
City of Flagstaff - Southside Phase I	Ellery Infrastructure Improvements	$75,000.00	NR
City of Flagstaff - Southside Phase II	Verde Street Infrastructure	$7,500.00	NR
City of Flagstaff - Pine Knoll Phase II	Brannen Infrastructure & Arroyo FUTS path	$52,833.00	NR Not Funded

 Administrative Funding Recommendation
CDBG administration and compliance are limited to 20% of the allocation.  Staff is recommending an allocation of $130,392.

• Grant Compliance and Administration = $59,807
• City’s Estimated Indirect Costs (Estimated at 10%) = $70,585

Per HUD’s guidance, the City of Flagstaff has estimated the 2017 allocation will be the same as last year’s federal allocation. Once the HUD allocation is awarded to the City of Flagstaff and with Council’s approval, the Housing Section plans to treat the allocation implementation as follows:

• If funding increases, all proposed activities would receive full funding.  If a balance remains, each plan would receive an equal percentage of the increased funding.
• If the City of Flagstaff’s entitlement decreases, the 2017 allocation will start by funding the highest ranked proposals until the funding is fully distributed.

The attached Resolution 2017-16 is reflective of the recommendations listed above.   The 2017/2018 CDBG recommendations are based on an estimated total of $776,433.20 in available funding.

CDBG funds, leveraged with other private and public funds over the past 15 years, have resulted in benefits to thousands of Flagstaff residents.  In program year 2016-2017, Flagstaff leveraged $666,339.52 in CDBG expenditures with $2,564,712.02 in other private or public funds.

Public process requirements for the Annual Action Plan offer extensive community involvement and collaboration ranging from public meetings and public comment periods to a ranking focused committee.

First Public Meeting – January 12, 2017

• Display advertisement (December 20, 2016 – AZ Daily Sun)
• Meeting to discuss the CDBG proposal process and the Annual Action Plan

Second Public Meeting – February 23, 2017

• Display advertisement (February 5, 2017 – AZ Daily Sun)
• Meeting to review the submitted proposals and allowed public comment in preparation for making funding recommendations to City Council

With efforts to attract a diverse group of social service agencies, emails were distributed to all members of Coconino County’s Continuum of Care (300 members).  Additionally, agencies that had previously requested information and/or had been involved in the CDBG proposal process in prior years received email invitations.  The proposal format was provided at the first public meeting on January 12 and placed on the City website with a deadline of February 16, 2017.  Five (one subsequently self withdrew) external agency proposals were received along with six City of Flagstaff requests.