Report Prepared by: Kimberly Nutt, Housing Program Supervisor, Housing Division/Development Services Department; and Erica Stafford, Housing Program Specialist II/Development Services Department
Title
SUBJECT: Public Hearing - Receipt of Public Comment and Adoption of a Resolution to Approve and Submit the U.S. Department of Housing and Urban Development (HUD) Consolidated Annual Performance and Evaluation Report (CAPER) for Program Year 2025 to HUD
REPORT IN BRIEF
Public Hearing and requested adoption of the U.S. Department of Housing and Urban Development (HUD) Consolidated Annual Performance and Evaluation Report (CAPER) for Program Year 2025, with authorization to perform final updates to the report before its submittal to HUD by September 28, 2026.
RECOMMENDATION
City Council -
A. Holding a Public Hearing to receive public comment from interested parties.
B. Adopting Resolution 2026-63, A Resolution of the City Council of the City of Merced, California, Approving the 2025 Program Year Consolidated Annual Performance and Evaluation Report (CAPER); and,
C. Authorizing the City Manager to make final updates to the approved CAPER report prior to and after its submittal to HUD, should HUD require any additional modifications.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to modifications as specified and requested by Council; or,
3. Continue item to a future Council meeting for approval consideration (note that the regulatory HUD submittal deadline of September 28, 2026).
AUTHORITY
Merced Charter Section 200 and Title 24 of the U.S. Code of Federal Regulations, Part 91.520.
CITY COUNCIL PRIORITIES
As provided for in the Fiscal Year 2025-2026 City of Merced Adopted Budget.
DISCUSSION
Requested Actions
Staff requests the Council hold a Public Hearing to receive public input regarding the Program Year (PY) 2025 Consolidated Annual Performance and Evaluation Report (CAPER) for the program year that began on July 1, 2025, and ended June 30, 2026 (PY 2025).
After completion of the public hearing, staff requests approval of the attached City Council Resolution, which grants approval of the report and authorizes its submittal to HUD to meet their regulatory submittal requirement of September 28, 2026 (due 90 days after the end of the program year).
Some sections within the report will need to be updated in the days following Council’s anticipated action to approve, to note public comments made at the meeting and make any minor data adjustments that may be necessary. Therefore, staff requests Council authorize these entries after Council’s approval of the presented report. Also, experience shows that HUD may request changes to CAPER reports after submittal - so, this authorization would extend to those modifications, as well.
Background:
The City of Merced is an “Metropolitan City Entitlement Community,” qualifying as the largest city with a population of over 50,000 people in Merced County, which receives direct annual allocations of Community Development Block Grant (CDBG) from the U.S. Department of Housing and Urban Development (HUD). Additionally, the City is a “Participating Jurisdiction” for the annual direct distribution of HOME Investment Partnerships Program (HOME) funds that are used to support affordable rental and homeownership housing activities within the city limits.
Pursuant to 24 CFR 91.520 and as a condition of receiving the CDBG and HOME funds, the City is required to submit a Consolidated Annual Performance and Evaluation Report (CAPER) to HUD at the close of each program year.
The CAPER serves as a "report card" for how the City performed in implementing activities and programs approved in its Annual Action Plans and how the City is following its own PY2025-2029 Consolidated Plan, which contains a Strategic Plan for how funds will be spent over a five-year span. In addition, the CAPER catalogs additional activities that are funded through the Housing Division and provides staff an opportunity to highlight changes and improvements to the program that occurred over the course of the program year.
2025 Program Year Review
The Housing Division used the following grant funding sources during the last program year in working to achieve the community’s housing and community development goals:
1. Community Development Block Grant (CDBG) - Federal/HUD
2. HOME Investment Partnership Program (HOME) - Federal/HUD
3. Community Development Block Grant Coronavirus (CDBG-CV) - Federal/HUD
4. American Rescue Plan HOME Investment Partnership Program (HOME-ARP) (Administrative Funds only) - Federal/HUD
5. Coronavirus State and Local Fiscal Recovery Funds (SLFRF) - American Rescue Plan Act (ARPA) - Federal/U.S. Treasury
6. California Housing and Community Development (HCD) CalHome Program - State
7. California Housing and Community Development (HCD) Homekey+ Program - State
8. Program Income (generated from loan payments and property resales that originated from Federal and State funding sources)
The common goal of these programs is to make Merced a more livable community for all residents, especially those at moderate Average Median Income (AMI) levels or lower, and to guide funding to activities that help meet that goal. Significant resources are used to assist individuals and families in retaining and enjoying decent, safe, and affordable housing. Other community development efforts have targeted job skills and job retention, financial and life skills training, food and nutrition programs, and public improvements and neighborhood facilities.
The 2025 Annual Action Plan was approved by City Council on June 16, 2025, and was submitted to HUD on August 14, 2025. Following the City Manager’s execution of the related grant agreements received from HUD in early January 2026, HUD granted access to City’s PY2025 CDBG and HOME allocations on January 13, 2026.
Summary of HUD Resources Available and Resources Expended
|
Source of Funds |
Resources Made Available |
Amount Expended During Program Year |
|
CDBG |
$ 1,271,844.00 |
$ 351,289.75 |
|
HOME |
$ 1,776,200.00 |
$ 1,053,329.16 |
|
CDBG-CV |
$ 500,109.69 |
$30,000.00 |
|
HOME-ARP |
$ 1,991,748.00 |
$ 15,000.00 |
Accomplishments
There have been some notable accomplishments from PY2025, which include:
1. Housing Division received $140,447.71 of HOME program income and $392,593.55 in Repayment to Local Account (IU) funds receipted that will be reinvested back into affordable housing projects. At the beginning of the year, the estimated amount to be received was $60,000.
2. Through HOME administrative funding of $33,206, Project Sentinel, Inc. provided fair housing services to a total of 74 individuals through Intake and Referral Calls, assisted 7 households through fair housing discrimination-related casework and advocacy, attended 15 outreach events or activities, and distributed 833 pieces of educational materials via outreach efforts.
3. Housing Division received $260,509.09 of CDBG program income and $362,902.31 in Repayment to Local Account (LA) funds receipted that will be reinvested back into eligible projects. At the beginning of the year, the estimated program income amount to be received was $108,000.
4. Through CDBG administrative funding of $38,000 provided to the Merced County Human Services Agency as Collaborative Applicant for the Merced County and City Continuum of Care, a consultant was procured to oversee the annual HUD required Point-In-Time (PIT) Count. Countywide, the January 22, 2026, one-day count identified a total of 748 individuals who were experiencing homelessness, both sheltered and unsheltered. 73.8% of those individuals, or a total of 552 (348 sheltered/204 unsheltered) were counted within the city limits.
5. Early in PY2025, Sierra Saving Grace completed all activities related to acquiring and rehabilitating an existing two-unit residential property, using $579,788.38 of their total $586,381 award of PY2024 CDBG funding (previous-year). The project converted market-rate units to LMI affordable and permanent supportive housing and currently houses 2 families. Though funded in PY2024, the project outcomes appear in the 2025 CAPER due to its final project closeout occurring after July 1, 2025.
6. Harvest Time used $68,550.11 in CDBG funds to provide a food distribution service to low-moderate income and homeless residents. Through the year, they distributed: 4,400 pounds of food to residents, provided 619 family food boxes, and provided lunches to homeless residents in partnership with Merced Rescue Mission.
7. Project Sentinel was awarded $50,000 in CDBG funds to administer a tenant/landlord counseling service for low-moderate income City residents. During the year a total of 341 residents were assisted, 18 cases were opened, and 1,560 total pieces of outreach material were distributed. As the final invoice was not received before June 30, 2026, the project closeout and reported outcomes will not appear until the next (PY2026) CAPER.
8. Dr. Jennifer M. Jones Foundation was awarded $44,059 in CDBG funds to operate a rental/housing stabilization program while connecting participants with case management, community resources designed to promote long-term housing stability. Housing staff is currently working with the organization to complete final invoicing and demographics reporting. Final demographic and accomplishment information will be reported in the next (PY2026) CAPER.
9. Walking by Faith Ministries International dba SERENITY “STARS” after school program used $23,280.66 in 2024 CDBG funds to provide an afterschool support program to low-moderate income students. A total of 20 students were provided with after-school homework & literacy support, a peer mentor program, and social development. The project outcomes are reported in the PY2025 CAPER due to project closeout occurring after the end of the last program year.
10. At the start of PY2025, United Way was able to assist one last small business with $30,000 in PY2020 Coronavirus CDBG funding (CDBG-CV) that were distributed by HUD in April and September of 2020, when the Coronavirus Pandemic began. The funds were used to reimburse the business for providing safety accommodations and training in retaining 7 low-moderate income employees during the pandemic.
11. During the 2025 program year, a final expenditure in the amount of $1,015,855.80 was provided to the developer of the 156-unit HOME-assisted Devonwood Apartments project (renamed River Canyon Apartments). In total, the project was provided a total of $3,845,734 of HOME funds to assist its construction. $1,309,538 of U.S. Treasury SLFRF-ARPA funds also provided to the project were paid out in PY2025 (these are not reported in the CAPER). The project is in the last stages of filling the remaining units. As project closeout will occur in PY2026, the projects accomplishment data will appear in the next (PY2026) CAPER.
Citizen Participation Requirements - Outreach Efforts
In meeting the currently adopted Citizen Participation Plan (CPP) requirements for the annual CAPER process, the Housing Division published public notices in English, Spanish, and Hmong languages on Sunday, July 26, 2026, in the Merced Sun-Star and on Thursday, July 30, 2026, in the Merced County Times. The required public notices were posted on both the City Clerk’s and the Housing Division’s Public Notices webpages, as well as the designated posting area at City Hall.
The posted Public Hearing and Public Review and Comment Period Notice advised residents of the public meeting, the 15-day review and comment period dates, how to view posted documents (include URL links), methods available to provide written comment, language translation and ADA accessibility accommodations, and the public hearing date of the Council meeting at which the report was scheduled for approval.
The Public Review and Comment Period was held from August 15 to August 29, 2026, then extended to September 5, 2026, for a total of 22 days (minimum 15 days required by HUD and the adopted CPP).
The draft 2025 CAPER public documents were posted on the Housing Division webpage prior to the start of the review and comment period. All posted documents were available for viewing on the website, in person at the Housing Division office, and residents could request them to be emailed directly to them.
Housing Division received no comments on the 2025 CAPER.
Citizen Participation Plan Update In Progress
For most processes regarding HUD funds, plans, and reports, the City must follow its adopted Citizen Participation Plan (CPP) in ensuring that the input of residents and other interested parties is considered in each process. As such, on a yearly basis, Housing staff holds a public meeting prior to the report being prepared, where information is provided to attendees regarding the activities carried out over the last program year. The CPP also requires the City to make the accumulated accomplishment, expenditure, and outcome data that has been collected, and a public draft of the report available to the public to review with the opportunity to provide comment within a specified comment period.
The current CPP is in the process of being updated to reflect current HUD requirements and outreach methods that are being used. One of these updates will be to propose moving one of the two yearly public hearings required by HUD to the CAPER report provided to Council. Staff is implementing this change with this PY2025 CAPER report to Council. Once approved under its own public process, the updated CPP is expected to reduce the number of hearings required for approval of each Annual Action Plan to one required public hearing, thereby streamlining that annual process.
Housing staff is also working on a comprehensive set of HUD-related Policies and Procedures, which HUD has long required for most elements of managing HUD funds and programs.
Housing staff intends to bring both the CPP Update and the new Policies and Procedures to Council for approval this winter, prior to beginning the 2027 Annual Action Plan citizen participation process.
IMPACT ON CITY RESOURCES
There is no impact on City resources regarding this report.
ATTACHMENTS
1. Draft PY2025 CAPER
2. Draft Resolution 2026-63
3. Presentation