| ITEM #: 3. DATE: 03/18/2024 AI #:1862 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | FY2025 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) |
| STAFF PRESENTER(S): | Christina Panaitescu, Community Partnerships Program Manager |
Summary
Council direction regarding eligible activities for the investment of FY2025 Community Development Block Grant (CDBG) entitlement funds. (Christina Panaitescu, Community Partnerships Program Manager)
FISCAL IMPACT
The Annual Action Plan, to be submitted to the federal department of Housing and Urban Development (HUD) for acceptance, will define how Goodyear intends to invest its FY2025 CDBG entitlement funds. The anticipated expenses and offsetting revenue will be included in the FY2025 budget as appropriate. Future budget amendments may be necessary upon final approval from HUD.
BACKGROUND AND PREVIOUS ACTIONS
In May 2021, the City submitted a five-year consolidated plan and first year action plan to HUD, establishing the priorities for investing CDBG entitlement funds from the federal government. Each May, the City is required to submit an annual action plan, specifying how it intends to allocate CDBG funds in the upcoming fiscal year.
Goodyear is entering its fourth year as an Entitlement Community.
In FY2022, the City leveraged CDBG funds to replace existing streetlights with improved LED fixtures and add bollard lighting along a neighborhood pathway to improve safety in North Subdivisions; in FY2023, the City utilized its CDBG funds to assist the local domestic violence shelter, New Life Center, with renovating their onsite child development center; and, in FY2024, the City's entitlement was applied to park improvements at Palmateer Park in the Historic Goodyear community.
Projects (called activities) must benefit low-to-moderate-income (LMI) Goodyear households or neighborhoods, or serve specific populations who are presumed to be LMI, and have to fit in one of the following eligible priority areas which were prioritized in the consolidated plan: program administration, community facilities and improvements, and public services. Activities identified as low priority, attainable and sustainable housing or eligible economic development projects, are also eligible if an exceptional opportunity were to present itself.
To prepare for this work session, staff hosted a public meeting (1/16/24) and consulted city department directors, local broadband providers, and members of the Faith & Community Roundtable (2/18/24), seeking suggestions for eligible projects.
A range of fifteen eligible activities were suggested. Proposed projects that were raised by stakeholders centered around attainable and sustainable housing, public services, and community facilities and improvements.
Given the anticipated award amount and the administrative burdens that accompany HUD CDBG funds, at this time, it is in the City’s interest to focus on capital community improvement-type projects.
Goodyear is entering its fourth year as an Entitlement Community.
In FY2022, the City leveraged CDBG funds to replace existing streetlights with improved LED fixtures and add bollard lighting along a neighborhood pathway to improve safety in North Subdivisions; in FY2023, the City utilized its CDBG funds to assist the local domestic violence shelter, New Life Center, with renovating their onsite child development center; and, in FY2024, the City's entitlement was applied to park improvements at Palmateer Park in the Historic Goodyear community.
Projects (called activities) must benefit low-to-moderate-income (LMI) Goodyear households or neighborhoods, or serve specific populations who are presumed to be LMI, and have to fit in one of the following eligible priority areas which were prioritized in the consolidated plan: program administration, community facilities and improvements, and public services. Activities identified as low priority, attainable and sustainable housing or eligible economic development projects, are also eligible if an exceptional opportunity were to present itself.
To prepare for this work session, staff hosted a public meeting (1/16/24) and consulted city department directors, local broadband providers, and members of the Faith & Community Roundtable (2/18/24), seeking suggestions for eligible projects.
A range of fifteen eligible activities were suggested. Proposed projects that were raised by stakeholders centered around attainable and sustainable housing, public services, and community facilities and improvements.
Given the anticipated award amount and the administrative burdens that accompany HUD CDBG funds, at this time, it is in the City’s interest to focus on capital community improvement-type projects.
STAFF ANALYSIS
Although specific award amounts have not yet been communicated by HUD, best practice dictates using the previous year's award for planning purposes. Goodyear's FY2024 entitlement was $397,718. As the actual allocation could be greater or less than the FY2024 entitlement, any activity selected should be able to accommodate a shortfall or be adapted to a surplus.
CDBG is a complex grant program and requires administration and oversight. Examples of administrative expenses include: those related to compliance with federal regulations, promoting the principles of fair housing, assessing neighborhood and housing conditions, and the need for human and public services, and establishing application and monitoring systems. Staff recommends we continue to reserve the full 20% allowable for administration, as we have done in the past.
Staff’s recommendation is to continue to allocate the balance (80% of the entitlement) towards a Community Facilities and Infrastructure activity. In this case, funding for the design, purchase, and installation of as many as 17 streetlights along Litchfield Rd. in front of the Historic Goodyear neighborhood. This recommendation is an eligible activity and a tangible investment in enhancing the safety and infrastructure of the community.
HUD requires that the balance from the FY2022 Community Facilities and Infrastructure activity be reprogrammed with the FY2025 allocation. All reprogrammed funds must be used for non-administrative activities. This will increase the available funds for this project by $14,409.51.
Pending your direction this evening, the suggested activities will be part of the draft plan that will be available for public comment beginning March 29 and concluding with a public hearing on April 29.
The final plan will be brought to Council for authorization on May 6, in order to be prepared to meet HUD’s deadline.
CDBG is a complex grant program and requires administration and oversight. Examples of administrative expenses include: those related to compliance with federal regulations, promoting the principles of fair housing, assessing neighborhood and housing conditions, and the need for human and public services, and establishing application and monitoring systems. Staff recommends we continue to reserve the full 20% allowable for administration, as we have done in the past.
Staff’s recommendation is to continue to allocate the balance (80% of the entitlement) towards a Community Facilities and Infrastructure activity. In this case, funding for the design, purchase, and installation of as many as 17 streetlights along Litchfield Rd. in front of the Historic Goodyear neighborhood. This recommendation is an eligible activity and a tangible investment in enhancing the safety and infrastructure of the community.
HUD requires that the balance from the FY2022 Community Facilities and Infrastructure activity be reprogrammed with the FY2025 allocation. All reprogrammed funds must be used for non-administrative activities. This will increase the available funds for this project by $14,409.51.
Pending your direction this evening, the suggested activities will be part of the draft plan that will be available for public comment beginning March 29 and concluding with a public hearing on April 29.
The final plan will be brought to Council for authorization on May 6, in order to be prepared to meet HUD’s deadline.