Report Prepared by: Kimberly Nutt, Housing Program Supervisor, Housing Division/Development Services Department
Title
SUBJECT: Allocation of Fiscal Year 2021-22 U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) Program Resources to Fund Subrecipient Agreements with Sierra Saving Grace Homeless Project and the Merced Rescue Mission for the Respective Programs Approved With the Adopted 2021 Annual Action Plan
REPORT IN BRIEF
Considers authorizing the execution of Community Development Block Grant (CDBG) Subrecipient Agreements with Sierra Saving Grace Homeless Project ($500,000) and Merced Rescue Mission ($400,000) for both organizations’ Acquisition with Rehabilitation Programs.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving an agreement for a program identified in the 2021 HUD Annual Action Plan using CDBG funds from the 2021/22 Fiscal Year, per previous City Council recommendation, with Sierra Saving Grace Homeless Project in the amount of $500,000 for the “Supportive Housing Project” Program (Account 018-1301-552-29.00/Supplies and Services); and,
B. Approving an agreement for a program identified in the 2021 HUD Annual Action Plan using CDBG funds from the 2021/22 Fiscal Year, per previous City Council recommendation, with Merced Rescue Mission in the amount of $400,000 for the “Hope for Families” Program (Account 018-1301-552-29.00/Supplies and Services); and,
C. Authorizing the City Manager or the Deputy City Manager to execute, and if necessary, make minor modifications to the agreements described above and as attached, and all associated documents; and,
D. Authorizing the Finance Officer to make necessary budget adjustments.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to conditions other than recommenced by staff; or,
3. Deny; or,
4. Refer to City staff for reconsideration of specific items (specific items to be addressed 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 2021 HUD Annual Action Plan, and Title 24 of the U.S. Code of Federal Regulations, Part 570 (the U.S. Housing and Urban Development regulations concerning CDBG, including Subpart K of these regulations).
CITY COUNCIL PRIORITIES
As approved by City Council on July 6, 2021. and budgeted with Program Year 2021 HUD CDBG Program Funds. The projects associated with the agreements being presented for approval align with 2021-22 Council Goals & Priorities #4, in support of Housing and Homelessness programs that create affordable housing and prevent homelessness.
DISCUSSION
Staff is requesting that Council authorize execution of two subrecipient agreements for two similar projects approved with the 2021-22 HUD Annual Action Plan using Community Development Block Grant (CDBG) Program funds.
The agreements are to be funded by Program Year 2021 HUD CDBG funding granted to the City by HUD on October 27, 2021, after their approval of the Annual Action Plan, for use for the current program year ending on June 30, 2022. Following execution of each agreement, the respective organizations can then open escrow to purchase any one- to four-unit that suits their needs, capacity, and allocated grant budget (which includes cost of rehab).
The subject programs will use CDBG funds for the purchase and any necessary rehabilitation of existing one- to four-unit residential properties within the City of Merced, for the end purpose of renting as affordable housing to formerly homeless and/or low- to moderate-income individuals and families. While Sierra Saving Grace typically prefers to purchase and rehab multi-unit properties (up to four units), Merced Rescue Mission will purchase single-family homes in new or good condition that are typically ready to rent to families with little to no rehab or repair work needed. The funding amounts approved this year will allow each organization to continue these preferences under current housing market prices.
As required, Housing staff has completed both initial “Part 1” National Environmental Protection Act (NEPA) environmental reviews necessary to allow each project to move forward with signing offers on suitable properties. The Part 1 review, which covers non-physical “exempt” activities including hazard/pest inspections and purchase of insurance, must be completed prior to contract execution. Once an offer is accepted on a property, staff will begin preparation of a “Part 2” site-specific environmental review that will consider all necessary rules and steps required for environmental compliance completion. Completion of the Part 2 review must occur before close of escrow.
Sierra Saving Grace Homeless Project (SSG) is a 501(c)(3) nonprofit charity organization, and their 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.
The Merced Rescue Mission is also a 501(c)(3) nonprofit charity organization whose mission is to provide hope and serve people who are homeless and needy in Merced County. In their efforts to accomplish this mission, the Merced Rescue Mission provides food, case management, and multiple levels of housing to those in need, including homeless, overnight warming and navigation shelters/centers, transitional housing, and permanent supportive housing. Coordination and navigation with other services is provided to empower participants to reach their personal goals that will lead to stability and productivity. The Merced Rescue Mission provides these services through donations and grants like the CDBG funding they will receive for the Hope for Families Project through the approval of this agreement.
IMPACT ON CITY RESOURCES
The two agreements do not require any expenditures from the General Fund. These are both subgrants allocated in the current year budget (Fiscal Year 2021-22) and funds are available within Account 018-1301-552-29.00 (Supplies and Services).
ATTACHMENTS
1. Draft Agreement with Sierra Saving Grace Homeless Project - “Supportive Housing
Project” Program
2. Draft Agreement with Merced Rescue Mission - “Hope for Families” Program