Consideration and Adoption of Resolution No. 2020-61: Resolution amending the 2019/2020 Annual Action Plan to allocate $766,551.00 in Community Development Block Grant Program Coronavirus (CDBG-CV) funds and authorizing submission of the amended 2019/2020 Annual Action Plan to the U.S. Department of Housing and Urban Development (HUD).

This staff summary is for the consideration of the third substantial amendment to the 2019/2020 Annual Action Plan originally approved by City Council and submitted to HUD in 2019.  The third substantial amendment identifies how an additional $766,551.00 in CDBG-CV funds awarded in October 2020 will be allocated to the Flagstaff community. CDBG-CV funds, provided by the CARES (Coronavirus Aid, Relief, and Economic Security) Act have been allocated to the City of Flagstaff for prevention of, preparation for, and response to COVID-19 and must be used to address Flagstaff’s urgent community needs related to the Coronavirus. 

Council provided Staff with direction as to the allocation of CDBG-CV funds during the November 10, 2020 work session after a presentation of recommendations including funding allocated to Coconino County Health and Human Services, Flagstaff Shelter Services and Catholic Charities of Northern Arizona. Council’s direction was for funds to be allocated only to Catholic Charities and Flagstaff Shelter Services. Staff was further directed to meet with both organizations and determine the distribution of the $200,000 originally recommended for Coconino County Health and Human services.

It is staff’s recommendation that Council allocate CDBG-CV funds to Flagstaff Shelter Services in the amount of $365,697 for Alternative Sheltering of Homeless Individuals and Families to Prevent COVID-19 as well as an additional $20,000 for the Front Door Coordinated Entry program. Staff is also recommending an allocation of $20,000 to Catholic Charities for their work with the Front Door Coordinated Entry program, $128,303 for Homeless & Supportive Housing Services and $36,000 for a Real Property Lease for the Closing the Gap program. Finally, staff recommends that Council place $176,551 of CDBG-CV funds in reserve for allocation with the City of Flagstaff Spring 2021 CDBG Annual Grant Cycle.

This recommendation implements Council’s direction by allocating the $200,000 originally recommend for Coconino County Health and Human Services to Flagstaff Shelter Services in the amount of $135,697 and to Catholic Charities in the amount of $64,303. The organizations have also requested that the $40,000 originally recommended for Catholic Charities Front Door programs instead be split between the two agencies.

Approval of Resolution 2020-61 will substantially amend the City of Flagstaff’s 2019/2020 Annual Action Plan for the 3rd time in order to incorporate an additional $766,551.00 in CDBG-CV funds provided by the CARES (Coronavirus Aid, Relief, and Economic Security) Act and subsequent funding allocations as directed by Council.  Due to the health and safety concerns caused by the pandemic, this amendment of the 2019/2020 Annual Action Plan is necessary to expedite CDBG-CV funding into the Flagstaff community. The cumulative amount for this and the previous allocation rounds of CDBG-CV for the City of Flagstaff is $1,126,155. For this proposed allocation, the City has waived the indirect rate of 10% and applied a flat amount (as opposed to 10%) for administration in order to maximize community benefit.

The Flagstaff City Council's CDBG Priorities: 

• Provide affordable housing (rental and ownership)
• Address homelessness
• Improve neighborhood revitalization
• Promote workforce job training
• Support education/ early childhood development

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.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.

On April 10, 2020, Council approved the first substantial amendment to the 2019/2020 Annual Action Plan. This initial amendment permitted Flagstaff Shelter Services to provide infectious disease prevention services instead of the previously intended employment services. FSS has provided expanded shelter and services in response to the Coronavirus for the past 7 months.

Staff received Council direction on the first round of CDBG-CV funds allocated to the City of Flagstaff on May 12, 2020. Council then approved a second substantial amendment to the 2019/2020 Annual Action Plan incorporating the CDBG-CV funds and directing allocations to Flagstaff Shelter Services, Coconino County Health and Human Services and Catholic Charities for public service programs preparing for, responding to, and preventing COVID-19.

On November 10th, 2020 staff presented Council with options for the 2nd round of CDBG-CV funding allocations. Council provided direction for the allocation of these funds to community organizations administering projects for low-to-moderate income individuals that prepare for, respond to and/or prevent Coronavirus, specifically to Catholic Charities of Northern Arizona and Flagstaff Shelter Services.

Council provided Staff with direction as to the allocation of CDBG-CV funds during the November 10, 2020 work session after a presentation of recommendations that included funding to be allocated to Coconino County Health and Human Services, Flagstaff Shelter Services and Catholic Charities of Northern Arizona. Council’s direction was for funds to be allocated only to Catholic Charities and Flagstaff Shelter Services. Staff was further directed to meet with both organizations and determine the distribution of the $200,000 originally recommended for Coconino County Health and Human services.

1. Approve the Resolution with finalized allocations and authorize the submission of the Amended 2019 Annual Action Plan to HUD.
2. Further modify the Resolution and/or the allocations and authorize the submission of the Amended 2019 Annual Action Plan to HUD.
3. Not approve the Resolution and provide different direction to staff.

The second disbursement of CDBG-CV funds provided by the CARES Act and allocated to the City of Flagstaff by HUD equals $766,551.00. In order to receive and incorporate CDBG-CV funding, the City must submit to HUD the required substantial amendment to the 2019-2020 Annual Action Plan. This amendment describes how CDBG-CV funds will be used. To determine the most efficient and effective use of the CDBG-CV funds, Housing Staff contacted the three local, non-profit agencies that received allocations of CDBG-CV funds for projects preventing, preparing for and responding to the Coronavirus in May 2020. These three agencies provide essential community services to vulnerable and low-moderate income community members and have successfully administered City of Flagstaff CDBG funded projects within the last 6 years. Staff discussed the urgent and critical funding needs for COVID-19 response with the directors of Flagstaff Shelter Services, Catholic Charities, and Coconino County Health and Human Services. For CDBG-CV allocations, HUD has waived the required 15% public service cap for projects aiming to prevent, prepare for, and respond to the Coronavirus.   On November 10, 2020, Staff presented the Council with options for the second round of CDBG-CV funding allocations. Council provided direction funds be allocated to Catholic Charities and Flagstaff Shelter Services. Staff was directed to meet with both organizations and determine the distribution of funds to COVID-19 related projects administered by Catholic Charities and Flagstaff Shelter Services. Below are the projects proposed and the requested funding from Catholic Charities and Flagstaff Shelter Services.    Public Service Activity Proposal/Project Request Flagstaff Shelter Services Alternative Sheltering for Individuals and Families $365,697 Flagstaff Shelter Services Front Door - Coordinated Entry $20,000 Catholic Charities  Front Door - Coordinated Entry $20,000 Catholic Charities Homeless and Supportive Housing Services  $128,303       Housing Activity Proposal/Project  Request Catholic Charities Real Property Lease for Closing the Gap Project $36,000

For the third substantial amendment to the 2019/2020 Annual Action Plan, Housing Staff is recommending the allocation of CDBG-CV funds in one of two ways. With either option, Housing Staff is recommending the City of Flagstaff utilize CDBG-CV funds for public service projects administered by Catholic Charities and Flagstaff Shelter Services for critical services provided to low-to-moderate income individuals of families impacted by COVID-19. These projects serve individuals experiencing or at-risk of homeless.   Additionally, Staff is also recommending funds be allocated to Catholic Charities for a real property lease for the Closing the Gap program. These funds will allow Catholic Charities to lease an additional housing facility for the Closing the Gap program.  Closing the Gap is permanent and affordable housing for chronically homeless individuals with wrap around services provided by the Guidance Center for individuals with serious mental illness and/or chronic substance abuse disorders.     Option A: Hold $176,551 of the $766,551 CDBG-CV award in reserve for allocation alongside the City of Flagstaff CDBG 2021/2022 Annual Entitlement and Spring Grant Cycle; or  Option B: Allocate all CDBG-CV funds immediately, increasing the allocation to Flagstaff Shelter Services for continued alternative sheltering options for individuals and families in response to COVID-19 by $176,551.       CDBG-CV Allocation Recommendations       Public Service Activities (15% Cap) Previous Recommendation Recommended Funding Serving Flagstaff Shelter Services Alternative Sheltering Options $250,000.00 $365,697.00 or $542,248.00 600 individuals including 15 families Flagstaff Shelter Services Front Door Coordinated Entry $0.00 $20,000.00 400 individuals  Catholic Charities Front Door Coordinated Entry $40,000.00 $20,000.00 400 Individuals Catholic Charities Homeless and Supportive Housing Services $80,000.00 $128,303.00 662 Individuals Coconino County Health and Human Services Hotel Operations $200,000.00 $0.00 N/A Total Public Service Activities $570,000.00 $534,000.00 or $710,551.00            Housing Activities  Previous Recommendation Recommended Funding Serving Real Property Lease for Closing the Gap $0.00 $36,000.00 14 individuals  Total Housing Activities $0.00 $36,000.00           Administration $20,000.00 $20,000.00   CDBG-CV Held in Reserve for Allocation with Spring 2021 CDBG Grant Cycle $176,551.00 $176,551.00   Allocated to Flagstaff Shelter Services for Alt Sheltering $0.00     Total Current CDBG-CV Allocation $590,000.00 $590,000.00 or $766,551.00

Considering overall community health as well as the health of Flagstaff’s most vulnerable community members, Housing Staff is recommending the funding of public services and housing projects that serve community members who are homeless or at-risk for homelessness and impacted by the COVID-19 pandemic.   Non-congregate sheltering of individuals positive for and/or at higher risk of contracting COVID-19 protects City-wide public health and prevents substantial spread of COVID-19 amongst the homeless population and the entire community. The Department of Housing and Urban Development has encouraged consideration of approaches that prioritize the unique needs of low- and moderate-income persons and the development of partnerships between all levels of government and the private for-profit and nonprofit sectors.   Housing Staff is recommending that Council allocate funding in one of two ways: Option A: Hold $176,551 of the $766,551 CDBG-CV award in reserve for allocation alongside the City of Flagstaff CDBG 2021/2022 Annual Entitlement and Spring Grant Cycle; or  Option B: Allocate all CDBG-CV funds immediately, increasing the allocation to Flagstaff Shelter Services for continued alternative sheltering options for individuals and families in response to COVID-19 by $176,551.  The benefits of allocating funds as detailed in Option A are numerous. For instance, every two years, after new Council members are elected, staff works with Council to establish CDBG priorities for the next two years. This is scheduled to take place in December 2020.  Reserving a portion of the CDBG-CV funds allows potential sub-recipients, including those that may be new to the City’s CDBG grant process, sufficient time to evaluate COVID-19 related needs and develop eligible and essential programs that aim to prevent, prepare for and respond to the Coronavirus and complete the grant application (to be released in January 2021) in a timely manner. The grant application process allows Housing Staff and the CDBG Ranking Committee to perform a thorough risk assessment of all potential sub-recipients. This will also permit new potential community partners serving low-moderate income community members impacted by COVID-19, to apply specifically for CDBG-CV grant funding. The Public Service funding category cap requirement of 15% has been waived for CDBG-CV funds making the potential funding available for Public Services Projects nearly double the typical allowable amount for the annual non-CV allocation of CDBG.   Given the rapidly changing community needs from the ongoing impacts of COVID-19, Housing Staff believes that waiting to allocate the remaining funds is prudent and allows the City and its partners time to assess community needs related to COVID-19, brainstorm potential long term solutions and expand community involvement and public participation by utilizing the CDBG Ranking Committee in its recommendation process, additionally providing a lengthier public comment period.   Duplication of benefits and supplanting of federal funds are an increased risk as relief funding is released to the communities in waves. Delaying allocation of a portion of the CDBG-CV funds will provide opportunity for the City’s non-profit partners to identify other potential sources of federal funds for these critical services. This will also allow time for advocacy measures at the state level for disbursement of COVID-19 relief funding directly into communities. Nevertheless, as COVID-19 cases in the City of Flagstaff and Coconino County continue to rise rapidly and show the potential to quickly move from the moderate spread to significant spread level category, it is more critical than ever to maintain social distancing amongst the City's homeless population. Flagstaff Shelter Services has indicated costs for motel, alternative shelter operations and increased staff at $575,000/month and $3.4 million dollars for the next 180 days. The lack of federal relief dollars as well as funding from the state makes the City's CDBG-CV allocation a critical source of funds for the continued offering of non-congregate shelter options to the City's most vulnerable community members. If Council should choose to not reserve CDBG-CV funds for allocation in Spring 2021, it is Staff's recommendation that these funds instead be allocated to Flagstaff Shelter Services in addition to the funds recommended for allocation in Option A.

The CARES Act adds additional flexibility for CDBG-CV funding requirements in these unprecedented times. The required public comment period is reduced to not less than 5 days and grantees may use virtual public hearings when necessary for public health reasons.

Utilizing these waivers of regulations, there was a five-day (instead of a 30 day) Public Comment Period from Nov 4th – 9th, 2020.  An advertisement for Public Notice was published in the Arizona Daily Sun on Nov 3rd, and the proposed DRAFT Resolution and the DRAFT 2019/2020 Amended Annual Action Plan were made available on the City of Flagstaff website starting Nov 3rd, 2020.

With efforts to eliminate risk of supplanting and duplication of benefits in federal spending, all while expediting CDBG-CV dollars to the greatest need, housing staff contacted the three local, non-profit agencies who received CDBG-CV funds for projects preventing, preparing for and responding to the Coronavirus.