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TO: Mayor Richard C. Irvin
FROM: Chris Ragona, Community Development Manager, Community Development Division
DATE: February 15, 2022
SUBJECT:
A Resolution Authorizing Approval of the 2022 Annual Action Plan and Substantial Amendments (2022-#1) Funding Recommendations
PURPOSE:
Staff requests approval of its proposed funding recommendations for the City’s 2022 Annual Action Plan for Federal Funding for Community Development Block Grant (CDBG), Home Investment Partnership Program (HOME) to the U.S. Department of Housing and Urban Development (HUD). Annually, the City of Aurora receives approximately $1.5 million dollars in CDBG and $700,000 in HOME funds that are used to provide decent, safe, and sanitary housing and provide services and projects to low-to-moderate income persons (defined as earning at or below 80% of the Area Median Income, or approximately $74,550 for a family of four in 2021). Staff also requests approval of its recommended Substantial Amendment 2022- #1 funding recommendations.
BACKGROUND:
The City of Aurora, as a direct recipient of CDBG and HOME funds, must plan for how these funds will benefit the Aurora community. Additionally, the City must also modify its 2018, 2019, 2020, and 2021 Annual Action Plans identified as Substantial Amendment 2022-#1 to reallocate CDBG and CDBG-CV funding to new and existing projects.
The City released an application round soliciting 2022 CDBG proposals on October 12, 2021 with a deadline of November 15, 2021. The results of staff analysis of the applications and their ability to meet the goals and objectives established by the City’s 2020-2024 Consolidated Plan formed the recommendations for the City’s 2022 Annual Action Plan and Substantial Amendment 2022-#1. City staff also considered alternative funding such as the City’s 2022 Quality of Life (QoL) funding if the applicant applied for CDBG and QoL opportunities or if a proposed activity was a better fit for either funding program. The 2022 CDBG funding recommendations can be found in Attachment A.
DISCUSSION:
The 2022 Annual Action Plan stresses the following 2020-2024 Consolidated Plan’s goals and objectives:
1. Expand and maintain the affordable housing stock (affordability for the purpose of providing decent housing).
2. Strengthen Homeownership among Low- and Moderate-Income Households (Affordability for the purpose of providing decent housing).
3. Public Service Assistance Including the Prevention and Reduction of Homelessness (Accessibility for the purpose of providing a suitable living environment).
4. Enhance and Improve Access to the Number of Community Amenities in Low- and Moderate Income Communities (Accessibility for the purpose of creating a suitable living environment).
All funding recommendations in the Annual Action Plans must correspond to an objective listed in the 2020-2024 Consolidated Plan.
2022 Funding Recommendations
The recommendations (Attachment A) reflect an estimate of funding levels for CDBG and HOME based on prior year allocations ($1,497,494 and $752,348) and anticipated prior year resources from program income as well as projects that came in under budget. Future Congressional action could result in changes to our anticipated funding levels. Any additional CDBG funding received through program income, an increase in the City’s funding, or completed 2021 and prior year projects that end up under budget will be placed in the Neighborhood Revitalization Activity. The Community Development Division (CDD) is also recommending a total of 6 activities to be placed in the City’s 2020 and 2021 Annual Action Plans (via Substantial Amendment 2022-#1) to assist in increasing our spending timeliness ratio and allow applicants to access funding more quickly. In addition to regular CDBG funds, Substantial Amendment 2022-#1 recommendations also reflect supplemental CDBG-CV funds in the amount of $309,795. All projects that utilize CDBG-CV funds need to prepare, prevent, and respond to the coronavirus and must also be placed in the 2020 Annual Action Plan.
Under Substantial Amendment 2022-#1, the Community Development Division (CDD) is also recommending the cancellation of a 2018 activity and a 2019 activity. The recaptured funds will be reallocated to new projects in order to assist in increasing the City’s spending timeliness ratio and allow applicants to access funding more quickly.
Of note, funds are programmed as “administration” as well as “public service” activities based upon HUD’s regulatory caps. The CDBG cap is 20% and the HOME cap is 10%. Administration funds are used for staff salaries, overhead, and training opportunities. Administration funds that are not used can then be reprogrammed for additional eligible activities by future amendments. The City received a total of 17 applications, with 14 projects recommended for CDBG/CDBGCV funding. Three projects were not recommended for funding.
Public Facilities and Infrastructure Improvements:
One application was recommended for CDBG funding in the total amount of $500,000. Funding will assist the City’s Engineering Department as part of the annual scattered site street resurfacing program in CDBG eligible areas. Funding will not replace, but instead will increase the budget for street resurfacing in eligible areas.
Public Services:
The CDBG public services cap is 15% and cannot exceed approximately $225,000, except for projects utilizing CDBG-CV funds to prepare for, prevent, and respond to the corona virus. Public service funds are used to support an agency’s operations costs (staff time, materials, etc.) specific to a particular CDBG program. Please note that with the exception of corona virus related projects, general CDBG public service activity funds must be expended during the City’s program year and cannot be carried over into another year.
CDD is recommending CDBG and CDBG-CV funding to 8 agencies in the amount of $345,000. Services include activities to assist senior services, homelessness assistance, youth education, domestic violence survivors, housing legal services, job training opportunities, and additional case management. The CDD is also recommending CDBG-CV funding to the Aurora Financial Empowerment Center in the amount of $100,000. Should actual funding be less than anticipated for projects that are not responding directly to the corona virus, these projects would take an across the board percentage reduction based on the amount of public service funds actually available.
Housing:
Four housing activities have been recommended for CDBG funding in the amount of $475,000. Activities include rehabilitation of an affordable multifamily senior housing development in the amount of $400,000. The terms of this deal will be presented for approval as a Redevelopment Agreement approximately in August 2022.
CDD staff is also recommending funding to continue the City’s first-time homebuyer Choose Aurora Down Payment Assistance Program and a pilot program requested by The Neighbor Project to extend their successful Matched Savings Program to create first time homebuyers. Additional funding is being recommended for a second phase of a comprehensive housing rehab planning study to be performed by the Center of Neighborhood Technology. Lastly funding for The Neighbor Project and Rebuilding Together Aurora for their respective single-family rehabilitation programs was not recommended because each program maintains a healthy balance of prior funding for the next calendar year based on annual average expenditures over the last 3 years.
HOME Funds:
As has been past practice by the City, CDD staff recommends that the City’s 2022 HOME funds be allocated as per HUD’s regulatory caps as follows: program administration is 10%, direct project activities is 75% and Community Housing Development Organizations is 15%. The City of Aurora has an open Notification of Funding Availability for HOME projects and approximately $3 million dollars is available when factoring in anticipated 2022 funding and previously received HOME-ARP funds received by the city as part of the American Rescue Plan. Once the CDD receives direct and CHDO activity proposals, CDD staff will provide specific recommendations to the Block Grant Working Committee and then City Council at a later date. Projects will then move through the City’s Substantial Amendment process for HOME funding approval.
2022 Annual Action Plan Calendar
Staff has prepared the draft 2022 Action Plan and Substantial Amendment 2022-#1 which will amend the City’s 2018, 2019, 2020, and 2021 Action Plans for submittal to the U.S. Department of Housing and Urban Development. HUD has advised that we should not submit our 2022 Annual Action Plan until actual amounts are received. Currently, a continuing resolution has been passed by Congress and more details on 2022 funding should be outlined by the end of February 2022. The City will finalize its 2022 Annual Action Plan and be ready to move forward with the City’s funding recommendations once the HUD submittal deadline is known.
The attachments include the following documents:
A. CDBG Recommendation Project List;
B. 2022 CDBG Applicant Summary;
C. Draft 2022 Annual Action Plan;
D. Draft Substantial Amendment 2022-#1;
E. February 4, 2022 Block Grant Working Committee Minutes (Pending approval).
F. Public Notice for 2022 Annual Action Plan and Substantial Amendment 2022-#1
On February 4, 2022, the BGWC members reviewed and voted unanimously to approve staff’s preliminary 2022 AAP and Substantial Amendment 2022-1 recommendations.
In accordance with the City of Aurora’s Citizen Participation Plan and the requirements of the U.S. Department of Housing and Urban Development Department, the 30-day notices for the 2022 Annual Action Plan and Substantial Amendment (2022-#1) was posted in the Beacon News on February 6, 2022. Each document was also made available on the City's website. A public hearing will be held on February 22, 2022 at 1:00 p.m. to provide the public with an opportunity to comment on the 2022 Annual Action Plan and Substantial Amendment 2022- #1 (A summary of any received public comments together with the public hearing minutes will be included with the Committee of the Whole meeting).
The City anticipates a surplus of approximately $300,000 in CDBG funds and approximately $40,000 in CDBG-CV funds to be allocated later in 2022 with a focus on local neighborhood investment and meeting unmet goals of the 2020-2024 Consolidated Plan. City staff plans to meet with each department and release a 2nd call for projects to partner with key nonprofit agencies to meet these goals. Project recommendations will be presented to City Council for approval in late spring of 2022.
IMPACT STATEMENT:
Since its inception in 1974, the CDBG program has invested over $52 million dollars in the City of Aurora. These funds have supported streets and infrastructure, housing development, job training, youth development, homeless services, historic preservation, and senior services among others. Since becoming an entitlement community under the HOME program 10 years ago, the City has allocated approximately $5.5 million in HOME funds to rehabilitate its aging housing stock, create affordable rental housing units, and explore additional uses of HOME funds to further expand affordable housing throughout the City.
RECOMMENDATIONS:
Staff recommends approval of a Resolution Authorizing Approval of the 2022 Annual Action Plan and Substantial Amendment (2022-#1). Staff also requests authorization for the City's Mayor, Chief Community Services Officer, Community Development Manager, or their designees to execute any contracts as well as any other documents associated with the 2022 Annual Action Plan and Substantial Amendments (2022-#1) including but not limited to HUD's program administration requirements.
Please do not hesitate to let me know if you have any questions, 630-256-3321 or ragonac@aurora.il.us.
cc: Public Health, Safety and Transportation Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing Approval of the 2022 Annual Action Plan and Annual Action Plan Substantial Amendments (2022-#1) to the 2018, 2019, 2020, and 2021 Annual Action Plan Funding Recommendations
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the 2022 Annual Action Plan and Annual Action Plan Substantial Amendments (2022-#1) will define priorities for community development funding; and
WHEREAS, funding will be available in the 2022 City Budget CDBG program account (221-1330-801-43-series), CDBG-CV program account (214-1330-801-46-series), and HOME program account (213-1330-801-43-series).
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the City Council of the City of Aurora, Illinois, finds as facts all of the preamble recitals of this Resolution and hereby approves a resolution authorizing the 2022 Annual Action Plan and Substantial Amendment (2022-#1), and authorizes the City's Mayor, Chief Community Services Officer, Community Development Manager, or their designees to execute any contracts as well as any other documents associated with these approvals, including but not limited to HUD's program administration requirements.