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TO: Mayor Richard C. Irvin
FROM: Dan Barreiro, Chief Community Services Officer, Community Services Division
DATE: September 6, 2018
SUBJECT:
A Resolution Authorizing Annual Action Plan Substantial Amendments (2018-#3) to Reflect Funding Re/Allocations for Prior Year Program Resources).
PURPOSE:
Staff requests authorization of Annual Action Plan Substantial Amendments (2018-#3) to reallocate funds for three CDBG projects. A draft of Annual Action Plan Substantial Amendments (2018-#3) is attached as Exhibit B.
The City's 2018 Annual Action Plan (AAP) was submitted to HUD on August 16, 2018. Upon review of the AAP, HUD has requested that the City demonstrate its intent for re/allocating unexpended prior year program funds. In the past, the City has typically reallocated funds through a separate Substantial Amendment process once there are direct project activities. However, recent HUD guidance has advised the City's Annual Action Plan needs to include specific allocations to project activities even though there may not be direct projects at the time of submittal. (Under the proposed Substantial Amendment (2018-#3), there is one specific project activity and two general activities that will be determined at a later date.) It is understood that projects under the economic development and public facility project categories will be determined at a later date and follow the Substantial Amendment public participation process. Any future direct project activities will be presented to City Council for approval.
CDBG reallocated funding is recommended as per unallocated funds, unexpended funds, and/or cancelled projects from the following CDBG Program Years: 2015, 2016, and 2017.
The following Annual Action Plan Amendment CDBG Activities and Reallocation Totals have been proposed under Substantial Amendment 2018-#3:
1. 2017 Section 108 Interest Fees for Aurora Arts Centre Project
As part of the City's Section 108 Loan for the Aurora Arts Centre Project, the City is required to cover HUD's credit subsidy and interest fees (until the loan repayments from the City's Section 108 partners begins in 2019). The amount requested will fund the quarterly interest fees for the 2018 (including reimbursement for funds that have already been paid) and 2019 fiscal years. Because the $3M loan interest payments are based upon a variable rate, to best ensure the consistency of the funding amount needed, additional funds may be requested at a future date.
Reallocation Total: $200,000.00
2. 2018 Economic Development Project TBD
The City previously cancelled its CDBG funded 2015 Microloan Program with the intent that it would reallocate funds towards a new economic development activity. In keeping with this, the below proposed funds will be reallocated to an eligible CDBG economic development activity at a future date. Pending the City's receipt and selection of eligible 2019 CDBG activities, it is anticipated that City Council's review of a specific program activity would likely occur in January 2019. (The City's 2019 CDBG funding application deadline is September 21, 2018. Once applications are reviewed for eligibility, eligible programs and projects will move through the 30-day public comment period which is tentatively scheduled to begin on November 18, 2019, with City Council review/approval scheduled for January 8, 2019.
Reallocation Total: $150,000.00.
3. 2018 Public Facilities Project TBD
Per HUD guidance, the City has reallocated funds to its public facilities category. Pending the City's receipt and selection of eligible 2019 CDBG activities, it is anticipated that City Council's review of a specific program activity will likely occur on January 8, 2019. In reallocating these dollars, the City would be in a position to fund shovel-ready projects that could benefit from an earlier start date and to avoid potential delays that may result from the City's 2019 annual allocation notice date.
Reallocation Total: $181,570.85
The following chart reflects the City's re/allocation of CDBG prior year resources that have been proposed to fund the above named activities:
|
Proposed New CDBG Activity |
CDBG Program Year Funding Source |
Original Funding Allocation |
Comments |
Recommended Re/Allocation to New Activity |
|
2017 Section 108 Interest Payments for Aurora Arts Centre Project |
2015 City of Aurora Unallocated Funds |
$ 69,633.60 |
Unallocated funds |
$ 64,798.07 |
|
|
2015 City of Aurora Program Administration |
$292,408.40 |
Program income used; project closed |
$ 36,067.64 |
|
|
2016 Family Focus/Early Learning Services |
$ 30,000.00 |
Project closed; unexpended funds |
$ 2,607.10 |
|
|
2016 Hesed House Seeds Case Mgmt |
$ 20,000.00 |
Project closed; unexpended funds |
$ .20 |
|
|
2016 AID Energy Efficiency |
$ 40,894.00 |
Project closed; unexpended funds |
$ 6,225.00 |
|
|
2016 City of Aurora Program Administration |
$293,898.20 |
Program income used; project closed |
$ 1,738.01 |
|
|
2017 City of Aurora Program Administration |
$302,784.00 |
Program income used; project closed |
$ 5,947.50 |
|
|
2017 City of Aurora Unallocated Funds |
$153,101.00 |
Unallocated Funds |
$ 51,162.57 |
|
|
2018 City of Aurora Unallocated Funds |
$230,169.00 |
Project cancelled |
$ 31,453.91 |
|
|
Reallocation Subtotal |
$200,000.00 |
|
2018 Economic Development Project TBD |
2015 City of Aurora Small Business Revolving Loan Program |
$100,000.00 |
Project canceled |
$100,000.00 |
|
|
2018 City of Aurora Unallocated Funds |
$230,169.00 |
Unallocated funds |
$50,000.00 |
|
|
Reallocation Subtotal |
$150,000.00 |
|
2018 Public Facility Project TBD |
2017 Quad County Urban League |
$ 20,000.00 |
Project closed; unexpended funds |
$ 10,489.76 |
|
|
2017 PADS/Hesed Grease Trap project |
$ 10,593.00 |
Project cancelled |
$ 10,593.00 |
|
|
2017 Marie Wilkinson Childcare Center |
$ 25,000.00 |
Project closed; unexpended funds |
$ 11,773.00 |
|
|
2018 City of Aurora Unallocated Funds |
$230,169.00 |
Unallocated funds |
$148,715.09 |
|
|
Reallocation Subtotal |
$181,570.85 |
|
Overall Reallocation Amount |
$531,570.85 |
Eligibility for the above activities must meet HUD's National Objective for low and moderate income benefit and also address the City's 2015-2019 Goals and Objectives.
The BGWC will hold a public hearing to obtain public input on the proposed CDBG re/allocations on Monday, September 10, 2018 at 4:00 PM at City Hall, 5th Floor Conference Room B. (The Public Notice is attached as Exhibit A.) The Block Grant Working Committee BGWC will review the above named CDBG projects for funding at their regular meeting scheduled for September 10, 2018. Public comments will be included with the City's submittal of its Annual Action Plan amendment. The public comment period for the proposed Substantial Amendment will conclude on September 25, 2018.
BACKGROUND:
The City of Aurora receives annual HUD funding allocation notices from HUD. By federal law, the City must allocate all HUD funds to eligible projects in order to ensure the funds are spent in a timely and efficient manner. Funding that is not expended during the grant period is reallocated to other program(s) or project(s) in order to make use of the federal funding investment in the community. At the request of HUD and in order to move forward in HUD's approval of the City's 2018 Annual Action Plan, HUD has requested the City to reallocate its unexpended prior year funding resources. The prior year resources resulted from unanticipated increases to the City's CDBG entitlement grant and/or recaptured funds that were unexpended from prior year projects and also to complete the public participation process. Substantial Amendments 2018-#3 will provide the revisions necessary to further address the City’s fulfillment of its CDBG, HOME, and ESG Annual Action Plan Submittal Requirements as per HUD’s regulatory requirements.
DISCUSSION:
The request to commit the CDBG prior year funds under Substantial Amendment 2018-#3 requires an amendment to the City’s 2018 AAP for federal funding and a full public comment process under the City’s public participation plan. The City is unable to move the approval process for its AAP until this process is completed. Substantial Amendment 2018-#3 does not alter the original public comment period for the City’s 2018 AAP CDBG, ESG, and HOME activities which closed and were approved by City Council on January 9, 2018 via R18-005 (Exhibit C) and July 24, 2018 via R18-178 (Exhibit D), respectively.
Funding for the CDBG projects will be available in the 2018 City Budget, through budget amendments to the CDBG program account 221-1330-801-XX-XX series.
Pending the Planning & Development Committee's approval and Committee of the Whole's approval, should the respective committee approvals result in moving this item forward for the September 25, 2018 City Council's review, Staff respectfully requests that this item remain under "unfinished business" on the City Council's agenda in order to accommodate the Substantial Amendment's 30-day public comment period.
IMPACT STATEMENT:
This action will have a positive impact on the City's community development and homeless prevention efforts. Through the formal acknowledgement of the City's incorporation of its prior year HUD resources via Substantial Amendment (2018-#3), the City will be able to move forward on submitting its 2018 AAP to HUD which will allow it to expend its 2018 CDBG, HOME, and ESG funds.
RECOMMENDATIONS:
Staff recommends approval of a Resolution authorizing Annual Action Plan Substantial Amendment (2018-#3) to reflect funding allocations for HUD's CDBG, HOME and ESG programs and to authorize 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 this Substantial Amendment, including but not limited to HUD's program administration requirements.
cc: Alderman Saville, Chairman
Alderman Jenkins
Alderman Franco
Alderman Donnell, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing Annual Action Plan Substantial Amendments (2018-#3) to Reflect Funding Re/Allocations for Prior Year Program Resources.
body
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 City of Aurora has a 2015-2019 Consolidated Plan and 2018 Annual Action Plan which have been adopted by the City Council and which have defined priorities for community development funding; and
WHEREAS, on January 9, 2018 via Resolution R18-005, the City of Aurora's 2018 Annual Action Plan was approved by City Council; and
WHEREAS, on May 1, 2018, the City of Aurora received notification from the Department of Housing and Urban Development (HUD) of its 2018 funding allocation for Community Development Block Grant (CDBG), HOME Investment Partnership Funds (HOME), and Emergency Solutions Grant Program Funds (ESG); and
WHEREAS, the City's 2018 Annual Action Plan submittal was contingent upon the City's completion of its ESG 30-day public comment period to allocate the 2018ESG funds; and
WHEREAS, the City of Aurora's 2018 Annual Action Plan first-time ESG allocation public comment period concluded on July 24, 2018; and
WHEREAS, on July 24, 2018 via Resolution R18-178, the City's 2018 ESG allocation was approved by City Council; and
WHEREAS, the City submitted its 2018 Annual Action Plan to HUD and HUD has requested the City to amend its 2018 Annual Action Plan to reflect re/allocations of it prior program year resources; and
WHEREAS, the City of Aurora is required by HUD to complete a Substantial Amendment to reallocate its unexpended prior program year resources; and
WHEREAS, the City of Aurora’s Block Grant Working Committee recommended
adoption of the Annual Action Plan Substantial Amendment (2018-#3) to fulfill HUD's request by re/allocating its CDBG prior year resources at its September 10, 2018 meeting; and
WHEREAS, funding will be available in the 2018 City Budget CDBG program account (221-1330-801-43-series) as per Exhibit A.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, finds as facts all of the preamble recitals of this Resolution and hereby 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 Annual Action Plan Substantial Amendments (2018-#3) to Annual Action Plan Substantial Amendments (2018-#3) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and authorizes the City's Mayor, the Chief Community Services Officer, Community Development Manager, or their designees to execute any contracts as well as any other documents associated with this Substantial Amendment, including but not limited to HUD's program administration requirements.