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HomeMy WebLinkAbout02-25-2015 CDBG MinutesCDBG Minutes February 25, 2015 Page 1 of 12 CITY OF ORANGE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM COMMITTEE MINUTES WEDNESDAY, FEBRUARY 25, 2015 6:30 P.M. Weimer Room, Orange City Hall MEMBERS PRESENT MEMBERS ABSENT STAFF PRESENT Mary-Ellen Manning None Mary Ellen Laster Eva Perez Fernando Rico I.CALL TO ORDER The meeting was called to order at 6:50 P.M. II.APPROVAL OF MINUTES – FEBRUARY 18, 2015 Committee Member Perez moved, seconded by Committee Member Manning, to approve the February 18, 2015, Minutes as presented. Motion carried, 3-0. III.PUBLIC HEARING – CITY OF ORANGE 2015-2020 CONSOLIDATED PLAN & FY 2015-16 ANNUAL ACTION PLAN Committee Chairman Rico opened the public hearing. Ms. Laster distributed to the Committee a summary of the Objectives of the Community Development Block Grant (CDBG) Program; advised that this document is handed out to all the nonprofit agencies when they participate in the technical assistance meeting; and added that it is also distributed to City departments so everyone involved knows what programs can be funded. She stated that there are primary objectives program of the CDBG Program -- decent housing, a suitable living environment, and economic opportunity; and noted that 100 percent of the Orange CDBG activities meet the National Objective of benefitting low and moderate income people, mentioning that federal regulations require a city to spend at least 70 percent of this funding to benefit the low and CDBG Minutes February 25, 2015 Page 2 of 12 moderate income population. Ms. Laster advised that Orange does not fund any programs under the National Objectives of slum and blight prevention or urgent need, noting that the City Council would have to officially designate certain neighborhoods as blighted to meet the slum/blight objective. Committee Chairman Rico noted his understanding that Paint Your Heart Out and the Riley Home improvements are a form of preventing slum and blighted situations. Ms. Laster stated that a project could address slum and blight issues even though the primary objective is benefiting low and moderate income persons; explained that slum and blight has more to do with deteriorating housing/infrastructure; and that the distinction for those projects (Paint Your Heart Out and the Riley Home improvements) is the City can qualify them as benefitting low, moderate income persons; and stated it is preferable to qualify projects under that criterion. Committee Chairman Rico mentioned the same with the work being done by Friendly Center with its urgent need assistance. Ms. Laster explained that under federal regulations, the urgent need criterion would fall more in line with a national disaster, such as flood and earthquake, a disaster wherein you immediately need assistance; and explained that is why Orange has qualified those programs under the first objective of benefiting low and moderate income persons rather than urgent need. Ms. Laster explained that under the benefit of low and moderate income persons, there are area benefits, such as streets, sidewalks, alleys, bike patrols that ride in neighborhoods wherein the majority of residents are low, moderate income people; advised that area benefit is the most commonly used category for basic activities where the areas are primarily low income; and noted that when the Public Works staff submits their applications, that work must be proposed in low, moderate income Census Tracts/Block Groups. Ms. Laster noted that public service programs must benefit a limited income clientele/population, either through obtaining income verification from recipients or there being a presumption of being low income due to either being elderly, abused/battered individual, severely disabled, homeless, people with HIV/AIDS, migrant farm worker, illiterate adult, or other qualifying criteria. Ms. Laster explained that even for programs that have this presumption of low income, Orange, not HUD, requires nonprofits to collect income verification from beneficiaries to make sure the City and the nonprofit agencies are accurately meeting HUD requirements. She noted that the Friendly Center, for example, requires documentation on family size and income in order to show that at least 51 percent of its clientele are low, moderate income individuals. CDBG Minutes February 25, 2015 Page 3 of 12 Committee Chairman Rico asked if the Operation School Bell recipients automatically qualify if they already qualify for the free school lunch programs. Ms. Laster indicated yes, because the school district has previously income- qualified the recipients. Ms. Laster noted that limited clientele activities may also “be of a nature and location that it can be concluded that primary clients are low, moderate income, such as public housing”, noting these are fairly broad definitions that may or may not apply to different cities and counties. Ms. Laster highlighted “removal of architectural barriers to allow mobility for elderly or severely disabled,” noting this would typically apply to ADA ramps. She stated the objectives also address microenterprise activities, explaining this section is difficult to address because it is hard to find a business owner who is low income; that in order to use CDBG funds for economic low, moderate income activities, the owner has to be low income or they have to hire a low income person; and added that this would create a long and impractical, labor-intensive tracking record activity. She added this is not really practical for Orange because of the limited funding. Committee Chairman Rico asked if there are any Orange County cities that work that part of the program. Ms. Laster noted her belief that Santa Ana used to have Enterprise Zones, but stated she is not aware if they still do; added that Santa Ana also had additional funding sources as well as CDBG; and advised that Orange never qualified to have Enterprise Zones. She explained that the former Redevelopment Agency would assist businesses that created jobs for low income people, such as restaurant service workers. Ms. Laster explained that under the category of “housing,” the City uses its HOME Investment Partnerships Program funds for the development of affordable housing to benefit low, moderate income people. Ms. Laster explained that under the category of “job creation/retention,” it is not practical for Orange to undertake this area because of the difficulty with the paperwork that must be done and the limited funding. Ms. Laster highlighted the list of eligible and ineligible activities; noted that under public facilities and improvements, the City is permitted to perform rehabilitation of its water lines, streets, sidewalks, that the City has completed a large number; that it is permitted to do acquisition and rehabilitation of neighborhood facilities, such as HOMES -- which is considered a public facility -- homeless shelters, group homes, halfway housing, for instance. CDBG Minutes February 25, 2015 Page 4 of 12 Ms. Laster highlighted the public services for job training and employment services, noting that Orange has not undertaken this area because of the limited funding in the public services category. She mentioned that years ago, Orange funded Orange Children and Parents Together for child care. She stated that public services also include, health care and substance abuse services, child care, crime prevention, and fair housing counseling,; adding that the City funds fair housing under the administration budget so these services do not compete with other nonprofits in the public services category. Committee Chairman Rico asked if Orange has received any grant applications that relate to crime prevention. Ms. Laster highlighted that would be the police bike patrol. Ms. Laster explained that under ineligible activities, Orange is not allowed to use CDBG funds for the building of a new City Hall or library, buildings for the general conduct of government, general government expenses, political activities, new construction except under certain conditions that are difficult to satisfy, income payments, purchase of equipment, operating costs, and maintenance expenses. She clarified that the CDBG funds can be used for improvements to buildings; cannot be used to repair potholes but can be used to replace streets in CDBG areas; and that these funds cannot be used for proselytizing, religious activities. She clarified that while the word “Christian” is used in the YWCA name, originally a faith-based organization, their activities that have qualified for CDBG funding have not involved religion, that they are providing shelter and food to the homeless without proselytizing or requiring attendance at church services. Ms. Laster noted for Committee Chairman Rico that she will have to get back with him on what is considered “income payments.” Ms. Laster highlighted the Outcome Performance Measurement System summary; explained that each project has to qualify under one of three objectives - suitable living environment, decent housing, or economic opportunity; that these objectives must meet one of three outcome criteria of availability/accessibility, affordability, and sustainability; and noted that for each one of the activities funded by Orange, staff selects which of these categories applies and meets the criteria to qualify for CDBG funds. Ms. Laster explained that availability/accessibility applies to activities that make available or accessible to low, moderate income, or disabled people services, infrastructure, public services, public facilities, housing, or shelter; and stated that in this category, accessibility not only refers to physical barriers, but also to making the basics of daily living available and accessible to low, moderate income people where they live. She stated that Orange almost always uses the “create suitable living environment” for the public service activities; and stated CDBG Minutes February 25, 2015 Page 5 of 12 that Orange also uses suitable living environment for the public facilities projects, such as a street improvement, which improves the sustainability, or for ADA ramps, which improves the accessibility. Ms. Laster stated that under decent housing, this typically applies to the few housing options in Orange, such as Paint Your Heart Out and HOMES. Ms. Laster highlighted “economic opportunity,” stating that Orange had qualified projects under that category when the Redevelopment Agency existed. She noted that HUD allowed Orange to take credit for those projects even though it did not use CDBG funds those projects because they fell under the categories of create economic opportunity through improved/new availability/accessibility; create economic opportunity through improved/new affordability; create economic opportunity through improved/new sustainability; and mentioned they usually provided employment opportunities. Ms. Laster explained for Committee Chairman Rico that the City has Housing Asset Transfer Funds from loans that were funded by the Orange Redevelopment Agency, money the City receives back from loan payments; advised that the existing affordable housing projects all have these loans, some being 55-year loans; and noted that money can be used for future housing projects. Ms. Laster highlighted the Guidelines for Preparing Consolidated Plan and Performance and Evaluation Report Submissions for Local Jurisdictions, noting the Consolidated Plan is designed to be a collaborative process whereby a community establishes a unified vision for community development actions; explained that the Consolidated Plan is developed for a five-year period; advised that Orange will be starting its new five-year cycle for 2015-2020; and noted that this is the final year of the City’s previous Five-Year Consolidated Plan. She added that the point of the Consolidated Plan is to inform HUD of all these funding sources and how the City is going to use those funding sources to address needs. Ms. Laster highlighted “The Consolidated Plan approach is also the means to meet the submission requirements for the Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), Emergency Solutions Grant (ESG), and Housing Opportunities for Persons with AIDS (HOPWA) formula programs,” pointing out Orange only receives two of these grants – CDBG and HOME Investment Partnerships. Ms. Laster reiterated that the statutes for these formula grant programs -- CDBG and HOME -- are decent housing, which includes assisting homeless persons to obtain affordable housing; assisting persons at risk of becoming homeless; retaining the affordable housing stock; increasing the availability of affordable permanent housing; increasing the supply of supportive housing, which includes structural features and services to enable person with special needs (including person with HIV/AIDS) to live in dignity CDBG Minutes February 25, 2015 Page 6 of 12 and independence; and providing affordable housing that is accessible to job opportunities. Ms. Laster stated that another statute for the grant program is suitable living environment, which includes improving the safety and livability of neighborhoods; eliminating blighting influences and the deterioration of property and facilities; increasing access to quality public and private facilities and services; reducing the isolation of income groups within areas through spatial deconcentration of housing opportunities for lower income persons and the revitalization of deteriorating neighborhoods; and restoring and preserving properties of special historic, architectural, or aesthetic value. She pointed out that Orange has found, especially for those residents living in the Old Towne area, they are not low income and do not meet the income qualifications to be eligible for CDBG funds. She stated that some Orange residents have taken advantage of the Mills Act, which is a state tax credit program for owners of historic properties, noting these residents can qualify regardless of income. Ms. Laster highlighted “conserving energy resources and use of renewable energy resources,” stating the City has not addressed that area with CDBG funds. Committee Chairman Rico suggested it might cover people getting funding for solar panels, solar hot water heaters. Ms. Laster stated that the City first looks at making sure a house is in decent and sanitary condition and in conformity with all codes before allocating CDBG funds to be used for nonessentials. Ms. Laster reiterated that expanded economic opportunities category has not been addressed in Orange due to the limited funding. She explained that the Davis- Bacon Act comes into play when a construction project is federally-financed or assisted; and that its workforce on this project must receive a prevailing wage/union wage. She added that Davis-Bacon applies to multi-family units of eight or more for CDBG funds; and advised that it applies when HOME funding is used for 12 or more units. She mentioned that there are a lot of projects with 11 units or less to avoid triggering the Davis-Bacon requirements; and added that the prevailing wage requirement only applies to construction activities. Ms. Laster added that Davis-Bacon requirements would not apply to CDBG or HOME funds used for single-family housing, but would apply to CDBG-funded facilities, and the project would have to benefit the low income population. She stated that because the senior center is a public facility, its rehabilitation projects triggered the Davis-Bacon Act. Ms. Laster highlighted the Consolidated Plan Process, Grant Programs, and Related HUD Programs form; advised that the City has to have consultation and citizen participation program, which includes the involvement of this Committee; CDBG Minutes February 25, 2015 Page 7 of 12 and that the City communicates with its residents to determine what they believe is important and how the funding should be allocated. She stated that the City’s Five-Year Consolidated Plan describes the jurisdiction’s community development priorities and multiyear goals based on an assessment of housing and community development needs, an analysis of housing and economic market conditions and available resources. She added that part of what will be done in preparing this Consolidated Plan is to download the City’s information from HUD’s on-line system, which will automatically self-populate these data into required documents. Ms. Laster explained that the Annual Action Plan will detail the City’s plans for one year, how Orange will spend that money for that particular year; that the Consolidated Plan will include Year 1 of the Annual Action Plan, and after that, the City will submit an Annual Action Plan every year after that; and that the City will then prepare a Consolidated Annual Performance and Evaluation Report (CAPER), which tells HUD how Orange has accomplished the goals that were set forth in the Consolidated Plan and the Action Plan. Reviewing the handout, Ms. Laster advised that Orange is an entitlement jurisdiction for CDBG funding and a Participating Jurisdiction (PJ) for the HOME program, noting that the references to “states” and “consortia” do not apply to Orange. She advised that Orange does have to consult with the Office of Fair Housing; that it has to provide an Analysis of Impediments to Fair Housing Choice, noting staff will be working on this analysis; that Orange does not have to consult with the Office of Pubic and Indian Housing; that the City will determine whether it will be required to consult with the Office of Sustainable Housing and Communities as part of the new electronic filing system. Ms. Laster highlighted the 2015-2020 Consolidated Plan Community Development Needs Survey, encouraging the Committee Members to complete the form and submit it to the City, indicating what each member thinks is a community need; she advised that these forms are available at the library; and that Friendly Center is distributing these forms to their beneficiaries. She highlighted some of the topics on the survey, such as accessibility, removal of physical barriers to the handicapped at community center/neighborhood facilities, parks and recreation facilities, public buildings, economic development and housing categories; and advised that the form ranks the priority/importance of each item. She stated there is a collection box at the library for the completed surveys. Committee Chairman Rico asked how much weight this survey carries in the formation of the Consolidated Plan. Ms. Laster explained that it depends on where the people live who fill out a survey, noting if they do not live in low-income areas, their responses would not be weighted as heavily as concerns from low-income area residents. She explained that staff will follow up on issues of concern in non-low income areas CDBG Minutes February 25, 2015 Page 8 of 12 but cannot allocate CDBG funds for those area. She stated that the City wants to know what the residents think is most important; and depending upon their response, it might impact what the Committee wants to do. Committee Chairman Rico asked if this is the only survey for the public to submit. Ms. Laster indicated yes; and reiterated it is available at the local library and in Spanish and English at the Friendly Center. Committee Chairman Rico suggested the survey be placed on the City’s website. Ms. Laster stated that while it would be ideal to place it on the City’s website, she does not believe the response would reach the low income population. Committee Chairman Rico stated it would be interesting to see what populations in Orange respond on the website. Committee Member Perez stated that in her experience working with the low income population, she does not typically see them owning computers and expressed her belief it is necessary to provide forms at places these residents visit. Committee Member Manning stated that by placing it on the City’s website, she believes there would be a bigger response but not necessarily from the low income population, which is what the City is seeking. Ms. Laster reiterated that the City wants to know what the priorities of the CDBG beneficiaries are. Committee Member Perez stated this would be a wonderful project for volunteers/interns to walk door to door in low income neighborhoods. Committee Member Manning suggested possibly students seeking community service credits. Ms. Laster mentioned that there were only 75 responses to the last Five-Year Consolidated Plan survey, noting it was available at multiple locations. She added that a display ad is also placed in the Orange City News, inviting the public to attend this public hearing to advise the City how they want to spend these funds; and stated it is not uncommon for cities to receive a low response to surveys or receive surveys from residents who are not low income. She stated it is very beneficial for Friendly Center to obtain these surveys from their clientele, because they are all low income households. Committee Chairman Rico asked that a year prior to the next Five-Year Consolidated Plan, the CDBG Committee proactively start addressing how to CDBG Minutes February 25, 2015 Page 9 of 12 improve/increase the number of survey responses. The Committee concurred with addressing the survey activities approximately a year in advance of the next Five-Year Consolidated Plan. Ms. Laster highlighted Appendix 1 for the Consolidated Plan Priorities, Five-Year Objectives, Annual Goals, and Accomplishments covering FY 2010-11 through FY 2014-15, noting that this document was included in the CAPER; and stated that this illustrates the housing priorities and shows how the City is meeting its requirements, and addressing its goals for housing. She stated that this matrix sets out the City’s five-year goals and objectives; and noted that the City proposed to improve the housing stock in Orange. She directed the Committee to the area where the City proposed to help 20 households with the HOME Improvement Program funds, but explained that as a result of funding cutbacks, the City was no longer able to fund the Program after Year 2, buy provided 12 loans and nine grants before the elimination funding. She stated that Paint Your Heart Out was able to assist the 25 households through its program. The Committee noted their disappointment with Paint Your Heart Out closing down its operations due to the lack of adequate financing. Ms. Laster highlighted Housing Priority No. 2, increase the supply of affordable housing through rental assistance, noting that with the exception of Garden Grove, Santa Ana, and Anaheim, the rest of the Orange County cities are under the umbrella of the Orange County Housing Authority for the Section 8 Voucher Program. She highlighted the funding cuts, noting that the City proposed to assist 2,670 households over a five-year period through OCHA, but it assisted a total of 1,951 households through Year 4; she stated that HUD directly funds the Orange County Housing Authority; and mentioned that the Section 8 Program is now known as the Housing Choice Voucher Program. Committee Chairman Rico asked if the new Consolidated Plan will assume a decreasing amount of funding each year. Ms. Laster indicated it likely would. Ms. Laster highlighted affordable housing development, noting the City proposed three projects in a five-year period; advised that the City has assisted two: Citrus Grove and Serrano Woods; and advised that the proposed Lemon Grove Apartments affordable housing project would be next door to the Citrus Grove project. If approved, this project would not be completed by the end of the current Five-Year Consolidated Plan. Ms. Laster advised that the City used to have a mobile home assistance program using Redevelopment Agency funds to help subsidize the rents for low income mobile home residents, noting that at one point, the City was spending almost $300,000 a year on that program; and explained that through attrition, there was only one mobile home owner left in this program. She added that this program was eliminated when the Redevelopment Agency funds were eliminated as of CDBG Minutes February 25, 2015 Page 10 of 12 2012-13; and while the City had proposed to assist five recipients, only two received assistance, the same households for two years in a row. Committee Member Manning asked how many units will be in the Lemon Grove apartment complex. Committee Member Perez asked how people find out about the availability of new, affordable units. Ms. Laster noted that applicants apply directly through the developer because they are privately owned; stated there is usually a contact phone number that is advertised on site or they can call the City for a phone number; and stated that there is a County of Orange Affordable Rental Housing List. Ms. Laster stated that depending on the project, some units are for the extremely low income population, which means their income cannot exceed 30 percent of the Median Income or lower; that some units are for the very low income population, which means their income cannot exceed 50 percent of the Median Income; and that some units are for the low income population, which means their income cannot exceed 80 percent of the Median Income. The meeting was recessed at 8:07 P.M. and reconvened at 8:13 P.M. Ms. Laster provided the Committee the County of Orange Affordable Rental Housing List. She noted for Committee Member Manning that there are 82 units being proposed for the new Lemon Grove Apartments; and stated that the Citrus project has 57 units. Ms. Laster pointed out that affordable housing is more reasonable than market rate housing; and stated it is lower than market rate but is not based on the tenant’s income. She pointed out that the majority of the projects on the list are not Section 8 projects. She added that there are waiting lists for all of these projects. Ms. Laster noted for Committee Chairman Rico that the City no longer accepts in- lieu fees; explained that when the Redevelopment Agency was in existence, under State law, if a developer built rental housing in a redevelopment project area, there had to be affordable housing provided; and that if the developer did not provide affordable housing, the City accepted an in-lieu fee from the developer, but stated that the in-lieu fees collected did not amount to enough money to develop an affordable housing project. With the elimination of the Redevelopment Agency, Ms. Laster explained that there are no project areas anymore, which means there is no requirement for a City to provide affordable housing in certain areas. She noted that Orange does continue to talk to developers about providing affordable housing. Committee Chairman Rico asked how many developers volunteer to provide affordable housing. CDBG Minutes February 25, 2015 Page 11 of 12 Ms. Laster stated there is little to no incentive for developers to offer affordable units; she mentioned that, if approved, bonds would be issued for the Lemon Grove project; that the developer would receive tax credits; and that the City is proposing to provide loans of HOME funds and (former) Redevelopment Agency loan repayment money. She added that the Lemon Grove Apartments would be 100 percent affordable, not a market rate project; and mentioned that the undertaking of Lemon Grove is a partnership between a nonprofit and a for-profit -- Orange Housing Development Corporation and C&C Development. Ms. Laster noted that the projects listed in the County of Orange Affordable Rental Housing List are ones the City assisted in some way, whether it was through bond issuance or density bonus. Ms. Laster explained for Committee Member Perez that the rent fees are calculated on a flat housing cost; and that if using HOME funding, the rents are published and cannot be any higher than the published HOME rents. For the units that would be former Redevelopment Agency units, she explained that a matrix was based upon the income for the presumed household, using an example that it is presumed a three-bedroom unit will house four people; and that the rent calculation is based on the Median Income for the presumed household size. She mentioned that is State law and that the rent does end up being lower than market rate. Committee Member Manning asked how long a client can live in an affordable unit. Ms. Laster stated it is indefinite as long as they are renters in good standing; she added that for tax credit projects, the City’s covenants are 55 years, which means these units have to be affordable for 55 years; and after that, those units can revert to market rate. She added that the tenants have rental agreements, are told what they can and cannot do; and noted they will be evicted if they do not abide by the rules. Ms. Laster advised that there is a low turnover for this type housing. Ms. Laster stated that for the first three years of this Five-Year Consolidated Plan, Orange used the Fair Housing Council; and that it is now contracts with the Fair Housing Foundation. She noted that cumulatively, the five-year objective was to assist 25 discrimination complaints and 2,025 other issues; and expressed her belief that outreach with the Fair Housing Foundation is much better now than it was with the Fair Housing Council. Ms. Laster highlighted the emergency shelter and transitional housing, homeless goals; pointed out that Orange has helped HOMES for many years with their Riley House Rehab, noting their projects are new each year; that Orange assisted L’Arche Wavecrest one year, a home for disabled people; that Orange has assisted Olive Crest a couple of times with their Wheeler and Palm house Refurbishments; that Orange has assisted WTLC with its Independence from Dependence program for a number of years; and that it has assisted the YWCA CDBG Minutes February 25, 2015 Page 12 of 12 First Steps program at the Beverly House in 2010, noting they were absorbed by Orangewood. Ms. Laster highlighted the Community Development Priority with the Orange Police Department Bike Team, the Community Service Programs and infrastructure projects; stated that the City has completed 23 infrastructure projects; that Orange has completed a large number of ADA ramp projects over the years under the Community Development goals; and she briefly highlighted the bulleted recipients under the economic development goal, such as The Bite Market, Haven Gastropub, Jersey Mike’s Subs, Santa Anita Business Park Association, and Jack Selman. Ms. Laster pointed out that these last economic development projects are ones which were completed during the first year of this five-year period, with nothing past the elimination of the Redevelopment Agency. Ms. Laster noted that page 4 summarizes the Consolidated Plan Goals of housing, homeless, community development and economic opportunity goals; how the City is meeting the criteria and targeting qualified income groups/recipients; and the Outcome Performance Measurements to show which of these performance measurements are being met. She stated that the City is looking at using similar priorities for this new cycle; pointed out that for the first year of 2015-16, the only homeless program prevention that applied is HOMES; and mentioned that if this housing were not provided, those residents could potentially be living on the streets. She added that the Friendly Center food program assists with homeless prevention. She stated that there are funding limitations with the elimination of the HOME Improvement Program and the elimination of the Paint Your Heart Out, noting the City will have to address those needs; but added that surprisingly, the City receives few calls for home improvement assistance. The public hearing was formally closed. IV. PUBLIC COMMENT None. V.ADJOURNMENT At 8:17 P.M. the meeting was formally adjourned.