cover
TO: Mayor Richard C. Irvin
FROM: Dan Barreiro, Chief Community Services Officer, Community Services Division
DATE: July 5, 2018
SUBJECT:
A Resolution Authorizing Annual Action Plan Substantial Amendments (2018-#2) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and Emergency Solutions Grant (ESG) Programs
PURPOSE:
Staff requests authorization of Annual Action Plan Substantial Amendments (2018-#2) to reallocate funds for two CDBG projects and to submit an ESG program application to the U.S. Department of Housing and Urban Development (HUD). A draft of Annual Action Plan Substantial Amendments (2018-#2) is attached as Exhibit C.
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 recommended by the City's Block Grant Working Committee (BGWC) under Substantial Amendment 2018-#2:
1. 2017 Section 108 Credit Subsidy and Administration 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 payments from the City's Section 108 partners begins in 2019]). The requested funds are to fund the ongoing annual subsidy and administrative (interest) fees for the remaining 2018 quarters and the 2019 year. Staff is seeking approval to use CDBG funds to reimburse the fees. Because the loan interest payments are based upon a variable rate as well as the loan amount owed once payments begin in 2019, to best ensure the consistency of the funding amount needed, additional funds will be requested at a future date.
Reallocation Total: $36,000.00
2. Cancel City of Aurora Small Business Revolving Loan Program
CDBG funds for this project were committed in 2015; however, the project's funds have not been expended. The goal for this micro-lending revolving loan fund program (RLF) was to provide micro- business capital in loans of no more than $10,000 to ensure that a business could sustain and grow in low to moderate income areas. Due to the RLF's program administration requirements, an RFP was sought from consultants due to the difficult and time consuming underwriting and client education standards with low to moderate income small businesses. Although the City sought and was prepared to award a contract to one of the RFP's respondents, after further review and discussions with the City, the selected consultant firm withdrew their bid. Following their bid withdrawal, additional staff review of HUD's regulatory requirements and the associated staff and consultant capacity concerns as well as HUD's fund expenditure timelines requirements became of increasing concern. Additionally, subsequent to the release of the RFP, the City had also been in the process of applying for a Section 108 Loan Guarantee from HUD to assist with economic development activities. The decision to cancel the CDBG activity has been made due to the challenges in developing the RLF Program as well as the new availability of the City's Section 108 Loan Funds in the amount of $3 Million Dollars and the micro and small business opportunities that the funds will provide. (The Section 108 funds were not available when the City first contemplated the RLF Program.) The canceled funds will be reallocated to an eligible CDBG activity at a future date.
Reallocation Total: $100,000.00
The funding sources from which the abovenamed two amended CDBG actives have been proposed for reallocation under Substantial Amendment 2018-#2 are outlined in the chart below. In some instances, existing projects may have had increases or decreases to their original amounts while in other instances, entirely new projects may be proposed:
|
Proposed CDBG Amended or New Activity |
Program Year/Funding Source |
Original Funding Allocation |
Comments |
Reallocation Recommendation (Decrease) |
|
2017 Section 108 Credit Subsidy and Administrative Fees for Aurora Arts Centre Project (Increase funds to cover 2018 and 2019 subsidy fees) |
2016 Joseph Corporation Safety First |
$227,225.00 |
Project closed; unexpended funds |
$ 597.66 |
|
|
2017 Family Focus Early Childhood Services |
$30,000.00 |
Project closed; unexpended funds |
$ 4,851.39 |
|
|
2017 PADS' SEEDS Case Management Program |
$25,000.00 |
Project closed; unexpended funds |
$ 0.21 |
|
|
2017 Entitlement Funds |
$153,101.00 |
Unallocated funds |
$30,550.74 |
|
|
Reallocation Total |
$36,000.00 |
|
Cancel City of Aurora Small Business Revolving Loan Program |
2015 Entitlement Funds |
$100,000.00 |
De-obligated funds will be reprogrammed at a future date |
($100,000.00) |
The following Annual Action Plan Amendment to the City's 2018 AAP ESG Activity Total has been recommended by the BGWC under Substantial Amendment 2018-#2 :
1. The City proposes to amend its 2015 - 2019 Consolidated Plan and 2018 Annual Action Plan (AAP) to fulfill HUD’s 2018 AAP application submission requirements by providing the public with an opportunity for comment on the City’s May 1, 2018 receipt of its ESG funds.
Allocation Total: $136,287.00.
The funding sources from which the abovenamed ESG Program have been proposed for reallocation under Substantial Amendment 2018-#2 will be allocated as follows and are outlined in the chart below:
|
Emergency Solutions Grant (ESG) |
|
I. PROJECTS |
Comments |
2018 Recommendation |
|
Street Outreach |
As a new ESG Program recipient, the City is in the process of developing this program to meet HUD’s requirements. Project allocations will be recommended via the City’s citizen participation process at a future date. |
To Be Determined |
|
Emergency Shelter |
|
|
|
Homelessness Prevention |
|
|
|
Rapid Re-Housing |
|
|
|
Homeless Management Information System (HMIS) Data Collection |
|
|
|
PROJECTS TOTAL |
$126,065.48 |
|
II. ADMINISTRATION (Cannot exceed 7.5% of ESG allocation) |
$ 10,221.52 |
|
GRAND TOTAL |
$136,287.00 |
The Block Grant Working Committee BGWC recommended the above named CDBG and ESG projects for funding as they support the City's 2015 - 2019 CDBG Consolidated Plan Community Development Goals and Objectives at their regular meeting held on June 6, 2018. The BGWC held a public hearing to obtain public input on their recommendation on Monday, July 2, 2018 at 4:00 PM at City Hall, 5th Floor Conference Room B. (Public Notice, Exhibit A is attached.) During the public hearing, the BGWC heard testimony from the Executive Director at Hesed House. During his testimony (which included written comments attached as Exhibit B), he shared areas his thoughts regarding the areas of the City's highest homeless prevention need in the following order of priority: emergency shelter, rapid rehousing, homeless prevention, and street outreach, with a preference that ideally, 100% of the non-administrative funds would be put towards emergency shelter and rapid rehousing activities. The public comment period for the proposed Substantial Amendment will conclude on July 24, 2018.
BACKGROUND:
The City of Aurora receives annual CDBG and HOME entitlement 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. Under this Substantial Amendment, the CDBG reallocated funding is recommended as per unallocated funds resulting 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 for the City's first-time ESG allocation.
The proposed allocation of ESG funds is recommended as per the recent first-time allocation of ESG funds. On May 1, 2018, the City received notice of its 2018 HUD funding allocation and was advised of not only its CDBG and HOME Investment Partnership allocations but also its receipt of ESG funds in the amount of $136,287. Per HUD, the City is required to complete a Substantial Amendment and application for the funds BEFORE it is able to submit its 2018 AAP.
The City did not receive notice of its ESG funds prior to May 1, 2018 and therefore, was unable to anticipate the funds as part of its original 2018 AAP's public participation process during the fall of 2017. As a result and following consultation with HUD, the City is fulfilling its requirement to formally accept its ESG funds through this Substantial Amendment. Aside from the program administration allocation, the direct project activity allocations will be submitted for the City Council's review and approval once the City's ESG Program is fully developed and the corresponding public participation process has been completed.
The ESG funds are specifically targeted towards providing homeless prevention and may be allocated to the following activities:
(1) Engage homeless individuals and families living on the street;
(2) Improve the number and quality of emergency shelters for homeless individuals and families;
(3) Help operate these shelters;
(4) Provide essential services to shelter resident;
(5) Rapidly re-house homeless individuals and families;
(6) Prevent families/individuals from becoming homeless; and
(7) Program administration expenses (no more than 7.5% of the ESG allocation).
Prior to its receipt of ESG funds, the City has been and currently is an active member of Kane County's Continuum of Care (CoC). Through the CoC (with Kane County as the Lead Agency), eligible organizations within unincorporated Kane County, City of Elgin, and City of Aurora have received ESG assistance through the State's ESG program. On May 31, 2018, the City informed CoC Board members of its intention to seek proposals from qualified agencies interested in providing services to homeless and at-risk families and individuals within the City’s geographic region. (ESG assistance has been given to the following CoC members: Community Crisis Center, Lazarus House, and Public Action to Deliver Shelter, Inc. DBA Hesed House.) As a new ESG recipient, due to the respective program development, the Neighborhood Redevelopment Division is seeking assistance from the CoC's ESG consultant in its program development efforts, with the intent to develop a program that will also complement the CoC's goals and objectives. Upon completion of the program's guidelines, the City will allocate the non-administrative funds after completing a needs assessment and the public participation process. Moving forward, the City will include the ESG funds as part of its AAP Process.
DISCUSSION:
The request to commit the ESG funds under Substantial Amendment 2018-#2 although seemingly ministerial in nature, 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 forward in submitting its AAP until this process is completed. Substantial Amendment 2018-#2 does not alter the original public comment period for the City’s 2018 AAP CDBG and HOME activities. The minimum 30-day required public comment period for the City’s 2018 AAP CDBG and HOME projects began on December 11, 2017 and ended on January 9, 2018. The 2018 AAP was approved by City Council on January 9, 2018 via R18-005 (Exhibit D).
Funding for the CDBG and ESG projects will be available in the 2018 City Budget, through budget amendments to the CDBG program account 221-1330-801-XX-XX series and new ESG accounts to be created as needed in the 214-1330-801-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 July 24, 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 the ESG funds via Substantial Amendment (2018-#2), 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-#2) 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 - #2) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and Emergency Solutions Grant (ESG) Programs
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 Consolidated Plan and 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) which included funding allocation for CDBG, HOME, and ESG Program Funds; and
WHEREAS, the City of Aurora is a first-time recipient of ESG funds and the City's 2018 Annual Action Plan which was approved by City Council on January 9, 2018 did not include its ESG allocation; and
WHEREAS, the City of Aurora is required by HUD to complete a Substantial Amendment to allocate its 2018 ESG funds before it submits its application for the ESG funds and its 2018 Annual Action Plan; and
WHEREAS, the City of Aurora’s Block Grant Working Committee recommended
adoption of the Annual Action Plan Substantial Amendment (2018-#2) to reflect CDBG and ESG funding re/allocations at its June 6, 2018 meeting; and
WHEREAS, funding will be available in the 2018 City Budget CDBG program account (221-1330-801-43-series) and 2018 City Budget ESG program account (214-1330-801-XX-XX 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-#2) to Annual Action Plan Substantial Amendments (2018-#2) to Reflect Funding Re/Allocations for the Community Development Block Grant (CDBG) and Emergency Solutions Grant (ESG) Programs 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.