Report Prepared by: Scott McBride, Director of Development Services, Development Services Department
Title
SUBJECT: Approval to Accept and Appropriate Grant Funds from the State of California Department of Housing and Community Development (HCD) From the Homekey Program in the Amount of $4,420,000
REPORT IN BRIEF
Consider accepting and appropriating grant funds from the State of California Department of Housing and Community Development (HCD) from the Homekey Program in the amount of $4,420,000.
RECOMMENDATION
City Council - Adopt a motion:
A. Accepting Homekey grant funds in the amount of $4,420,000; and,
B. Increasing revenue account 097-1301-324-02-00 in the amount of $4,420,000 and appropriating the same to 097-1301-512-17-00 for expenditures; and,
C. Authorizing the use of pooled cash to cover the appropriation until grant funds are reimbursed; and,
D. Authorizing the Finance Officer to make the necessary budget adjustments; and,
E. Authorizing the City Manager or Deputy City Manager to execute all documents, including any amendments.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to other than recommended by staff, identify specific findings; or,
3. Refer to staff for reconsideration of specific items as requested by Council, or,
4. Continue to a future City Council Meeting; or,
5. Deny request.
AUTHORITY
Charter of the City of Merced, Sections 200, 405, and 1105.
CITY COUNCIL PRIORITIES
Fiscal Year 2021/2022 Adopted Goals and Priorities, 4. Housing & Homelessness.
DISCUSSION
In April 2021, the City of Merced issued a Request for Proposals (RFP) to solicit interest
from perspective affordable housing development partners for several properties held by the City of Merced as the Housing Successor Agency. CC915, then Custom Containers 915, responded to the proposal for the location at 73 S. R St. with the intent of utilizing container units to create permanent supportive housing units. The proposal also included a partnership with the Merced Rescue Mission, a local nonprofit service provider, that will assist in site management and other services.
In September 2021, HCD issued a Notice of Funding for projects under the Homekey Program.
In October 2021, the Merced City Council provided direction and authority to enter into an Exclusive Negotiation Agreement (ENA) with CC915. The document is specific to the site located at 73 S. R St., APN 059-256-004. The ENA has since been executed with CC915 and provides the assurance that the City will not engage in any other real property negotiations specific to this site with other groups. It provides a timeframe of 300 days from execution to secure project financing.
In January 2022, the City Council approved applying for the Homekey Program as co-applicants with CC915.
In March 2022, HCD announced that the City of Merced and CC915 was awarded $4,420,000 of Homekey Program grant money. Now that financing has been awarded, City Council is being asked to accept Homekey funds in the amount of $4,420,000. These grants funds could potentially be advanced to the City by the grantor (HCD). In which case the City would hold funds until a request from CC915 for funding is received.
Once financial commitments are in place, the next step would be drafting and execution of a Disposition Development Agreement (DDA). The DDA will also include Regulatory Agreements to ensure affordability is secured to meet the long-term affordable housing goals of the City and memorialize the property donation as local financial support to the project in the value of $110,000.
IMPACT ON CITY RESOURCES
Accepting and appropriating the $4,420,000 in grant funds is necessary in order to allow the City and CC915 to perform or contract the work associated with the grant.
ATTACHMENTS
1. Affordable Housing Partners - Administrative Report
2. Homekey Co-Applicants - Administrative Report
3. Homekey Award Letter
4. Homekey Standard Contract