DATE: December 8, 2020
TO: Mayor and City Council
FROM: Deputy City Manager
SUBJECT
Community Development Block Grant (CDBG) COVID-19 Emergency-Related Funding: Adopt a Resolution Authorizing the City Manager to Implement a Contingency Plan for Allocation and Expenditure of Up to $1.69 Million in Available CDBG Funds for COVID-19 Emergency Expenditures, and Approving a Substantial Amendment to the CDBG Fiscal Year 2020 Annual Action Plan
RECOMMENDATION
That the City Council:
1. Adopts a Resolution (Attachment II)
a. Authorizing the City Manager to implement a plan to allocate and expend up to $1.69 million in available CDBG funds for COVID-19 emergency expenditures; and
b. Approving a Substantial Amendment to the CDBG FY 2020 Annual Action Plan (Attachment III).
2. Adopts a Resolution (Attachment IV) authorizing the City Manager to negotiate and execute an amendment to the agreement with Bay Area Community Services (BACS) to increase the contract amount to increase the funds available for rent relief grants in the City’s Rental Housing Relief Program.
SUMMARY
The federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act), passed in March 2020, allocates over two trillion in funds to respond to the COVID-19 pandemic at the federal, state, and local levels. In doing so, it makes available $5 billion in supplemental CDBG funding (i.e. CDBG-CV) for grants to prevent, prepare for, and respond to coronavirus. Additionally, the CARES Act provides CDBG grantees with flexibilities that make it easier to use CDBG-CV grants as well as FY 2020 and FY 2021 CDBG funds for coronavirus response and authorizes the U.S. Department of Housing and Urban Development (HUD) to grant waivers and alternative requirements. Through the CARES Act, the City of Hayward has received two separate allocations of CDBG-CV funding:
• Round 1: $902,238 awarded in April 2020
• Round 3: $1,191,514 awarded in September 2020
Round 2 funding from the CARES Act went directly to states; therefore, the City of Hayward has only received funding for Rounds 1 and 3.
Council allocated Round 1 funding based on guidance from the Community Services Commission (CSC) provided during the Fiscal Year 2020-2021 Community Agency Funding Process. Recognizing the impending challenges of COVID-19 in early March, the CSC recommended that staff prioritize the use of any additional CDBG funds to prevent homelessness and protect basic needs, like food security. On April 28, 2020, Hayward City Council approved the allocation of the Round 1 funds, along with the reallocation of existing uncommitted CDBG entitlement funds. For a full description of the allocation, see the staff report from the CDBG-CV COVID-19 response funding update provided to Council on June 23, 2020.
Round 3 CARES Act funding was awarded in September 2020 for entitlement grantees to “focus funds toward places with households facing higher risk of eviction,” specifically targeting communities with high proportions of job loss, risk of virus transmission, and risk of eviction. Staff returned to the CSC for their feedback on the allocation of the $1,191,514 Round 3 CARES Act award, along with $492,913 in unspent or uncommitted CDBG entitlement funds from Fiscal Years 2018-2019 and 2019-2020. Based on guidance from the CSC, HUD, and feedback from community agencies following the first round of CARES Act funding, staff recommends allocating these funds as follows:
• Housing Displacement Prevention: Increase the City’s contribution to its new Tenant Rent Relief program and create a homeowner loan program to link low-income homeowners financially impacted by COVID-19 and at high risk of foreclosure with an attorney to help re-negotiate mortgages and provide loans to bridge the gap between what homeowners owe and can pay to reduce the risk of foreclosure (Proposed Amount: $1,065,327)
• Economic Development: Increase the City’s contribution to the Economic Development Division’s Small Business Assistance program, including home-based childcare providers, providing additional grants to small businesses to respond to and prevent COVID-19 (Proposed Amount: $125,000)
• Health Facilities Support: Allocate funds to St. Rose Hospital Foundation for medical equipment purchases to respond to COVID-19 (Proposed Amount: $300,000)
• Permanent Supportive Housing: Set aside administrative funds for necessary first steps to explore the potential conversion of a local hotel into permanent supportive housing for individuals experiencing homelessness, thus reducing their risk of contracting COVID-19 (Proposed Amount: $100,000)
• Food Distribution: Allocate previously uncommitted CDBG entitlement funds to contract with Chabot College to administer the City’s food distribution site at Chabot College (Proposed Amount: $75,000)
• Administration: Set aside a small portion of the Round 3 allocation (less than 2%) for the increased administrative costs of staff managing CARES Act funds along with the regular CDBG entitlement program (Proposed Amount: $19,100)
To allocate these funds, HUD requires that the City of Hayward amend its FY2020 Annual Action Plan. Staff proposes the following total allocations to the categories in that plan (see Table 2 for a detailed description of these changes):
• Administration & Planning: $419,527
• Acquisition, Disposition, Clearance, & Relocation: $0
• Economic Development: $389,999
• Housing: $218,711
• Public Facilities & Infrastructure: $40,000
• Public Services: $253,551
• Economic Development-CV: $175,000
• Public Services-CV: $2,292,565
Staff recommends that Council adopt a resolution authorizing the substantial amendment to the FY2020 Annual Action Plan and authorizing the City Manager to implement a plan to allocate the funds outlined in the amendment. Additionally, as the proposed plan includes allocating a substantial portion of the funds to rent relief grants to prevent housing displacement, staff recommends that Council also adopt a resolution authorizing the City Manager to negotiate and execute an amendment to the agreement with Bay Area Community Services (BACS) to increase the contract amount to increase the funds available for rent relief grants in the City’s Rental Housing Relief Program.
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution Authorizing Allocation and Expenditure of CDBG Funds
Attachment III Substantial Amendment to the FY 2020 Annual Action Plan
Attachment IV Resolution Authorizing Amendment with BACS