Report Prepared by: Erica Stafford, Housing Program Specialist, Housing Division/Development Services Department
Title
SUBJECT: Approval of Allocation of U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant Program Resources and Approval of Associated Subrecipient Agreement with Sierra Saving Grace Homeless Project for the Acquisition/Rehabilitation "Supportive Housing Project" Approved with the Amended 2024 Annual Action Plan
REPORT IN BRIEF
Considers authorizing the execution of Program Year 2024-25 Community Development Block Grant (CDBG) Subrecipient Agreement with Sierra Saving Grace Homeless Project ($586,381).
RECOMMENDATION
City Council - Adopt a motion:
A. Approving an agreement for the program identified in the amended 2024 HUD Annual Action Plan using Fiscal Year 2024-25 CDBG funds with Sierra Saving Grace Homeless Project in the amount of $586,381 for the Acquisition/Rehabilitation “Supportive Housing Project” Program; and,
B. Authorizing the City Manager to execute, and if necessary, direct staff to make minor modifications to the agreement as described above and as attached, and all associated documents and exhibits.
Body
ALTERNATIVES
1. Approve, as recommended by staff: or,
2. Approve, subject to conditions other than recommended by staff; or,
3. Deny; or,
4. Refer to City staff for reconsideration of specific items (specific items to be addresses in the motion); or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Section 200 of the City of Merced Charter, City of Merced 2024 Amended HUD Annual Action Plan, and Title 24 of the U.S. Code of Federal Regulations, Part 570 (the HUD regulations concerning CDBG, including Subpart K of these regulations).
CITY COUNCIL PRIORITIES
As approved by City Council on February 3, 2025, and budgeted with Fiscal Year 2024-25 CDBG program funds. The project associated with this agreement being presented for approval aligns with the 2024-25 Council Goals and Priorities for homelessness prevention activities that can be addressed with HUD funding.
DISCUSSION
Staff is requesting that Council authorize execution of this subrecipient agreement for the use of CDBG funding preliminarily approved with the 2024 HUD Annual Action Plan in August 2024 and formally approved on February 3, 2025. HUD approved access to funding on November 7, 2024.
Following execution of this agreement, Sierra Saving Grace Homeless Project can move forward with all proposed activities, including the purchase of property for the intended use and can begin submitting invoices for the reimbursement of eligible costs incurred for the project.
Housing staff has completed the initial “Part 1” National Environmental Protection Act (NEPA) environmental review required to allow this project to move forward with a purchase agreement. Once a suitable property is selected, staff will begin the “Part 2” site-specific review which will consider all potential physical impacts and mitigation measures required to reach environmental compliance. Completion of the Part 2 review must occur before close of escrow.
Sierra Saving Grace Homeless Project
Sierra Saving Grace Homeless Project (SSG) is a 501(c)(3) nonprofit charity organization whose mission is to provide an interfaith and community-based safety net for chronically homeless individuals and families who are either underserved or not served by existing programs and services. SSG promotes a housing first approach to solving homelessness through the provision of intensive case management, advocacy, and services in recognition of the inherent worth and dignity of all persons.
SSG applied for the 2024-25 Program Year CDBG funds with the intention of acquiring a single property with up to 4 units, to rehabilitate and rent as affordable housing to current/formerly homeless and/or low-to-moderate income individuals and families.
All project costs are being provided as a loan to the organization. As such, the City will eventually receive the CDBG funds back as payments on the loan. SSG will be required to execute documents requiring affordable rents to tenants for the duration the property is owed by SSG and upon transfer or sale of the property.
IMPACT ON CITY RESOURCES
This agreement does not require any expenditures from the General Fund. It is a subgrant allocated in the current year budget (Fiscal Year 2024-25), and funds are available within Fund 25015500-511040 CDBG Housing Acquisition, Building & Rehab.
ATTACHMENTS
1. Draft Agreement - Sierra Saving Grace “Supportive Housing Project”