SUBJECT
Title
Evaluations and Funding Recommendations for FY 2023/24 and FY 2024/25 Human Services Grants and FY 2023/24 CDBG and HOME Funding
Report
BACKGROUND
The City of Sunnyvale receives annual entitlement grants of Community Development Block Grant (CDBG) and Home Investment Partnership Program (HOME) funds from the U.S. Department of Housing and Urban Development (HUD). Each year the City solicits proposals from local organizations to use a portion of these funds to provide eligible housing and community development services or projects to the Sunnyvale community.
In addition to the federal funds, Council biannually considers supplements to CDBG public services funding with general funds, referred to as the “Supplemental General Funds” for human services. Since FY 2019/20, Council has allocated $135,000 annually in support of outside agencies that provide community support. Every two years, the Housing and Human Services Commission (HHSC) holds a "Biennial Review of Priority Needs for Human Services" and recommends to Council to consider priorities and funding amounts for the upcoming cycle. During this review, the HHSC may request additional funding from the Council; should additional funding be awarded, the project budget will be updated. Grantees are awarded funds for two one-year contracts, with second year funding amounts contingent on performance and available funding.
The Requests for Proposals (RFP) for these funds was issued in December 2022. The City received 14 proposals for human services funding and three capital project proposals. A list of the proposals is provided in Attachment 1.
The staff scoring committee, consisting of several City staff from the Community Development and Library and Recreation Departments, evaluated the proposals based on the requirements and evaluation criteria in Council Policy 5.1.3: Human Services. In addition, the staff scoring committee referred to the priority needs described in the City's 2020-2025 Consolidated Plan and utilized the scoring system provided in the RFPs.
Priority Needs for Human Services
The Commission and City Council confirmed in November 2022 that the list of priority needs in the 2020-2025 Consolidated Plan continues to be valid, therefore the human services proposals had to describe how they address one or more of these priority needs:
A. Basic needs (such as food, shelter, transportation, health & mental health care, employment assistance/training, child care, etc.).
B. After school or intervention programs to provide youth with positive alternatives to drugs, violence, and/or gangs (i.e., recreational, mentoring, educational, and career-building activities).
C. Mental health, addiction and substance abuse counseling, particularly for youth and those exiting institutions.
D. Other specialized supportive services as may be requested by the community, such as foreclosure assistance, legal assistance for seniors and others, and other specialized human services, such as those currently supported by the City, or those that may address a new or unmet priority need.
Final grant recommendations will be used to prepare the 2023-24 Annual Action Plan, which will be considered by the City Council for adoption and submitted to HUD in May 2023.
DISCUSSION
Available Funding for Fiscal Year 2023/24
The City will receive CDBG funds from HUD in the amount of $1,054,691 and HOME funds in the amount of $454,952. Both amounts are reductions from the previous fiscal year - $73,621 (~6.5%) for CDBG and $22,193 (~4.7%) for HOME. With the exception of supplemental funding for COVID related services, the federal reductions are a trend we are continuing to see. In addition, staff estimates approximately $50,000 in CDBG program income (prior year loan repayments) will be received by the end of the current fiscal year in which certain amounts of program income can go towards new grants and administration. For FY 2023/24, staff is prioritizing that program income be deposited into the City’s Revolving Loan Fund as it is nearly depleted, with a small allocation of PI set aside for administration purposes to cover increasing staffing and program costs.
The available CDBG funds are split into the following categories:
1. CDBG Public Services Funding
a. CDBG regulations limit public services funding to no more than 15% of the City's FY 2023/24 CDBG entitlement grant. Grants awarded from this pool of funding have a minimum grant of $25,000.
2. CDBG Administration
a. CDBG regulations limit administrative costs to no more than 20% of the City's FY 2023/24 CDBG entitlement grant, plus 20% of CDBG program income received in the prior fiscal year. The City uses a portion of administrative costs to fund Fair Housing services.
3. CDBG Capital Project
a. The remainder of CDBG funds are then allocated to capital project proposals, which may include activities such as: housing rehabilitation, economic development activities, public facilities and infrastructure improvements, site acquisition, commercial building rehabilitation, and several other types of projects listed in the CDBG statutes. Any of the project types must show clear evidence that they will “primarily benefit” low-income residents. This means at least 51% of the users of the facility to be improved, or beneficiaries of the activity (e.g., loan recipient, occupants of housing to be improved, job training program participants) must be low-income.
Supplemental General Funds for Human Services
$135,000 is currently estimated to be available in supplemental General Funds for each of the next two fiscal year’s human services grants; confirmation of funding amount will occur by Council during the final budget hearing in late June.
|
ESTIMATED Funds Available for FY 2023/24 |
CDBG |
|
Entitlement Grant |
$1,054,691 |
|
FY 20/21 Estimated Program Income (PI) for Admin |
$10,000 |
|
Prior Year Unspent Funds |
$300,000 |
|
Total Budget Allocation Estimates Total Grant + PI |
$1,364,691 |
|
Maximum Funds Available for Program Administration (20% of CDBG Grant + PI) |
$220,938 |
|
Maximum Funds Available for Human Services (15% of CDBG Grant) |
$158,203 |
|
Funds Available for Capital Projects (This includes prior year unspent funds, noted above) |
$985,550 |
|
General Fund Supplement - Human Service Grants |
$135,000 |
FY 2023/24 FUNDING PROPOSALS
Staff Scoring Committee
The staff scoring committee met to discuss the proposals, eligibility and completeness requirements, scoring, and possible funding scenarios. Each member of the committee independently scored each proposal, and their scores for each proposal were averaged. Staff then ranked the proposals by average score, as shown in Attachments 2 and 3.
CDBG Capital/Economic Development Project Proposals
A CDBG Capital Project RFP is issued on an annual basis. For FY 2023/24, three capital project proposals were received, as shown in Attachment 2. There was a total of about $1.8 million in requests, which is significantly higher than the about $985,550 in available funds. Staff recommendation is to fund the top ranked MidPen Housing’s proposal for the rehabilitation of Carroll St. Inn for $490,000, and second ranked Sunnyvale Community Services’ proposal for WorkFirst for $355,550.
Staff does not recommend funding the third ranked proposal from WeeCare for the BOOST program. Reasoning for this recommendation includes lack of experience with the financial management, administration and compliance of CDBG funds, unclear objectives, and a budget focus on staffing rather than program outcomes.
Human Services Proposals
CDBG Public Services Recommendations
As shown on Attachment 2, for the CDBG Public Service applicants, staff recommends funding five applications for a total of $158,203. The total requested amount of funding is $306,770. Staff is recommending a lower funding amount for all six prospective grantees to stay within available funding amounts - and to provide each applicant with a significant portion of funds requested, as each application was strong and meets a critical community priority need. The two highest ranking proposals received a larger allocation, while remaining four are recommended to receive the minimum grant amount of $25,000; one of which being to fund Project Sentinel’s Fair Housing Services proposal out of the administration budget, which is an eligible use of funds.
General Fund (GF) Recommendations
Ten applications were received for FY 2023/24 General Fund Human Service grants, seen in Attachment 3. Available funding for FY 2023/24 and FY 2024/25 is tentatively set at $135,000, with total application requests of about $185,000. Eight General Fund proposals are recommended to receive a full funding allocation, ranging from $10,000 to $24,999 (the maximum grant amount). All applications except for one are being recommended for funding. The Evaluation Committee decided not to recommend funding the Rebuilding Together proposal as this is comparable to a current program offered and managed in-house by the City’s Housing Division with many overlapping aspects.
One caveat to the General Fund Human Service grants for this funding year is the application from Project Sentinel to continue their Dispute Resolution Program. This program was previously funded using general funds under a five-year project approved by Council and that expires on June 30, 2023. Extension of the funding source for the Project Sentinel program is being considered with the Citywide budget in June 2023. Therefore, if the Council does not authorize continued funding of the Project Sentinel as separate on-going program, Project Sentinel will instead be funded under the General Fund Human Service grants and remaining grant applications will be reduced accordingly, as seen in Attachment 3.
HOME Funding Recommendations
The City continues to commit HOME funds to its Tenant Based Rental Assistance program, which currently has a capacity of up to 40 low-income households by providing rental assistance, coupled with supportive services and employment training. The current contract is in year two of two, and therefore no HOME funds were released in the RFP for 2023/24. The City currently partners with Sunnyvale Community Services (Rental Subsidy Administrator) to operate the program.
NEXT STEPS
Staff will include the Housing and Human Services Commission (HHSC) funding recommendations in the draft 2023 Action Plan, which will be considered by the HHSC at its special meeting on April 19, 2023. The 2023 Action Plan will then be reviewed by the Council on May 2, 2023, before being submitted to HUD no later than May 15.
The Commission’s recommendations for GF human services will be considered by the Council at the Budget Hearing in May 2023. Awards will not become final until after Council adopts the final FY 2023/24 budget and HUD approves the City’s 2023 Action Plan.
ALTERNATIVES
1. Fund the CDBG capital project and human services proposals in the amounts shown in Attachments 2 to this report, and the General Fund human services proposals shown in Attachment 3 to this report.
2. Fund one or more of the proposals with a different amount(s) than those recommended by staff under Alternative 1, not to exceed the total amount of funding estimated to be available for each type of proposal and/or funding source.
RECOMMENDATION
Recommendation
Alternative 1: Recommend funding the CDBG/HOME capital projects and human services proposals in the amounts shown in Attachments 2 to the report, and the General Fund human services proposals show in Attachment 3 to the report.
Staff
Prepared by: Leif Christiansen, Housing Programs Analyst
Reviewed by: Jenny Carloni, Housing Officer
Reviewed by: Trudi Ryan, Director, Community Development
ATTACHMENTS
1. List of Grant Proposals Received
2. CDBG Draft Funding Recommendations
3. General Fund Human Services Draft Funding Recommendations
4. CDBG and General Fund Project Proposals