City Council Meeting - FINAL


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  10.A.       
Meeting Date: 06/01/2021  
From: Kristine Pavlik, Housing and Grants Administrator

Information
TITLE:
Consideration and Adoption of Resolution No. 2021-30: A resolution approving the City of Flagstaff's 2021/2022 Annual Action Plan and authorizing its submission to the U.S. Department of Housing and Urban Development (HUD).
STAFF RECOMMENDED ACTION:
1) Read Resolution No. 2021-30 by title only
2) City Clerk reads Resolution No. 2021-30 (if approved above)
3) Adopt Resolution No. 2021-30
Executive Summary:
This staff summary is for the approval of the 2021/2021 Annual Action Plan to the US Department of Housing and Urban Development (HUD) as part of the Community Development Block Grant Program (CDBG). Council approved the 2021/2022 Annual Action Plan on May 4, 2021, via Resolution 2021-17. Subsequently, on May 13, 2021, HUD issued a notice that 2021 CDBG entitlement awards had been increased by 1.5% of the original allocation or an increase of $8,419. The 2021/2022 Annual Action Plan is now due to be submitted to HUD on June 16, 2021, and is required in order for the City of Flagstaff to maintain its compliance with federal CDBG regulations. Timely submission of these documents will enable the City to continue its annual entitlement allocation of CDBG funding.

The new resolution also now includes language to address any further adjustments to the CDBG allocation of 10% or less. Should the City of Flagstaff receive further notice of an adjustment to the CDBG allocation of less than or equal to 10% of the total allocation, the surplus dollars would be applied equally among all housing activities. Conversely, should the City of Flagstaff’s entitlement award decrease, all awarded projects would decrease by an equal percentage.
Financial Impact:
Approval of the above resolution is critical to the City of Flagstaff receiving its annual CDBG entitlement allocation. After the 1.5% adjustment, the new 2021/2022 CDBG allocation is $579,786. In addition, the City of Flagstaff is able to include program income and reallocated funds from previous years to increase the funds available for allocation. Total program income and reallocated funds equal $312,406.17 for a grand total of $892,192.17 available for the 2021/2022 program year, through the Annual Action Plan process.

Staff's recommendation is to apply the additional $8,419 in equal percentage ($4,209.50 each) to the two housing activities funded by Council on May 4: Catholic Charities for Closing the Gap facility acquisition and Housing Solutions of Northern Arizona for the Owner Occupied Housing Rehabilitation program. Utilizing additional funds for only housing activities avoids any concern about violating the HUD required spending caps on administration and public service activities.
 
Staff is not recommending any of the additional funding be applied to indirect, administration, or planning. 
Policy Impact:
The City of Flagstaff Council’s CDBG Priorities:
  • Provide affordable housing (rental and ownership)
  • Address homelessness
  • Support neighborhood revitalization
  • Workforce development (including job training and lifespan education)
Connection to PBB Key Community Priorities/Objectives & Regional Plan:
Priority Based Budgeting
  • High Performing Governance
    • Encourage public trust through transparency, accessibility & use of the City’s public participation policy
    • Implement innovative local government programs, new ideas & best practices; be recognized as a model for others to follow
  •  Safe & Healthy Community
    • Support social services, community partners & housing opportunities
    • Provide alternative responses, resources & programs, inclusive of mental health & other services
  •  Inclusive & Engaged Community
    • Foster community pride & civic engagement by increasing opportunities for public involvement, in line with best practices & legal requirements
    • Advance social equity & social justice in Flagstaff by supporting social services
    • Facilitate & foster diversity & inclusivity, including support of anti-racist policies & practices
    • Enhance community involvement, education & regional partnerships to strengthen the level of public trust
    • Ensure city facilities, services, & programs are accessible for all residents & representative of Flagstaff’s diverse community
  •  Sustainable, Innovative Infrastructure
    • Support the community’s social infrastructure needs; assist those partner organizations that provide services the City does not
  •  Robust Resilient Economy
    • Support & strengthen a more robust, diverse, & sustainable economy in ways that reflect community values & provides for affordable housing opportunities
    • Enhance understanding between the development community, the City & Flagstaff residents
    • Enhance the community’s workforce development programs & improve partnerships with higher education institutions & the private & public sectors
  •  Livable Community
    • Support regional partners which provide equitable & inclusive educational opportunities for Flagstaff residents of all ages
    • Actively support attainable & affordable housing through City projects & opportunities with developers
  •  Environmental Stewardship
    • Implement, maintain & further the Climate Action & Adaptation Plan (CAAP) with awareness of social inequities
Regional Plan
  • Goal NH.1. Foster and maintain healthy and diverse urban, suburban, and rural neighborhoods in the Flagstaff region.
    • Policy NH.1.1. Preserve and enhance existing neighborhoods.
  • Goal NH.3. Make available a variety of housing types at different price points, to provide housing opportunities for all economic sectors.
    • Policy NH.3.1. Provide a variety of housing types throughout the City and region, including purchase and rental options, to expand the choices available to meet the financial and lifestyle needs of our diverse population.
    • Policy NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms
  • Goal NH.4. All housing is safe and sanitary.
    • Policy NH.4.1. Expand the availability of affordable housing throughout the region by preserving existing housing, including housing for very low-income persons. Policy NH.4.2. Reduce substandard housing units by conserving and rehabilitating existing housing stock to minimize impacts on existing residents.
    • Policy NH.4.3. Address accessibility issues and other housing barriers to persons with disabilities or special needs.
    • Policy NH.4.4. Encourage green practices in housing construction and rehabilitation that support durable, healthy, and energy efficient homes.
    • Policy NH.4.5. Renovate the existing housing stock to conserve energy and reduce utility and maintenance costs for owners and occupants.
    • Policy NH.4.6. Consider and integrate public transportation when possible in planning housing developments, to help reduce a household’s transportation costs and minimize impact on the community’s roads and transportation system.
    • Policy NH.4.7. Enforce compliance with fair housing laws.
  • Goal NH.5. Eliminate homelessness.
    • Policy NH.5.1. Provide adequate resources for families with children experiencing homelessness.
    • Policy NH.5.2. Provide adequate resources for individuals experiencing homelessness.
    • Policy NH.5.3. Support and expand programs that prevent homelessness.
    • Policy NH.5.4. Make transitional housing resources available to populations experiencing homelessness. 
Has There Been Previous Council Decision on This:
On May 4, 2021, Council approved three resolutions authorizing submission of the 2021-2025 Consolidated Plan, Analysis of Impediments to Fair Housing, and 2021/2022 Annual Action Plan (Resolution 2021-17), all HUD required documents for the 2021 program year. The May 4, 2021, Staff Summary is attached and outlines the original Council-approved allocations incorporated into the 2021/2022 Annual Action Plan. 
Options and Alternatives:
A)  Approve Resolution No. 2021-30 and authorize the submission of the Annual Action Plan to HUD.
B) Modify Resolution No. 2021-30 and authorize the submission to HUD.
C) Not approve Resolution No. 2021-30 and risk losing future CDBG allocations.
Background/History:
Council approved the 2021/2022 Annual Action Plan on May 4, 2021 with Resolution 2021-17. Subsequently, on May 13, 2021, HUD issued a notice that 2021 CDBG entitlement awards had been increased by 1.5% of the original allocation, or an increase of $8,419. The 2021/2022 Annual Action Plan is now due to be submitted to HUD on June 16, 2021, and is required in order for the City of Flagstaff to maintain its compliance with federal CDBG regulations.

The Annual Action Plan describes how CDBG funds will be used in the coming year and how the annual allocation will be used to meet community needs identified in the Consolidated Plan. 
Key Considerations:
Resolution No. 2021-30- Annual Action Plan
The 2021/2022 Annual Action Plan (AAP) identifies how the anticipated 2021 CDBG allocation will address Flagstaff’s community needs identified in the 2021-2025 Consolidated Plan and how funding will be distributed within Flagstaff city limits.
On May 13, 2021 HUD issued notification of a 1.5% increase in the 2021 entitlement allocation. Per HUD's guidance, staff is recommending that Council apply the $8,419 in additional funds as outlined below.
 
Total 2021 Entitlement Award $571.367.00
Additional 1.5% Allocation $8,419
Program Income (PI) and reallocated funds $312,406.17
   
Total Available Funding for Allocation $892,192.17

Staff's recommendation is that the additional $8,419 be applied in equal percentage to the Housing activities as outlined below. Utilizing additional funds for Housing activities avoids any concern about violating the HUD required spending caps on administration and public service activities. The increased amounts for each Housing activity are $4,209.50/ each. 

Below are the updated 2021 funding recommendations for the Housing Category:
Housing Activities Proposal/Project Original Allocation Adjusted Allocation
Catholic Charities of Northern Arizona Closing the Gap
Facility Acquisition
$345,769.84 $349,979.34
Housing Solutions of Northern Arizona Owner Occupied Housing Rehabilitation (OOHR) $303,665.83 $307,875.33
Total Housing       $657,854.67
Expanded Financial Considerations:
In addition to the approval of the adjusted allocation amounts, the Resolution states that should the City of Flagstaff receive notice of an adjustment to the CDBG allocation of less than or equal to 10% of the total allocation, the surplus dollars would be applied equally among all housing activities. Should the City of Flagstaff’s entitlement decrease, all awarded projects would decrease by an equal percentage.
Community Benefits and Considerations:
Please see the attached May 4, 2021 Staff Summary for more information.
Community Involvement:
Please see the attached May 4, 2021 Staff Summary for more information.
Expanded Options and Alternatives:
A) Approve Resolution No. 2021-30 and authorize the submission of the 2021/2022 Annual Action Plan to HUD.
B) Modify Resolution No. 2021-30.
C) Not approve Resolution No. 2021-30.
Attachments
Res. 2021-30
Draft 2021 AAP
May 4, 2021 Staff Summary


    

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