REPORT TO HOUSING AND HUMAN SERVICES COMMISSION
SUBJECT
Title
Biennial Review of Priority Needs for Human Services and Supplemental Human Services Funding Recommendations.
Report
BACKGROUND
The City provides grants to eligible human services agencies on a competitive basis pursuant to Council Policy 5.1.3 (Human Services), originally adopted in 1981, and amended in 1999 and 2006. Eligible human service agencies are those that provide assistance programs for lower-income clients (a household income of less than 80% of area median income), such as food, legal services, health care, literacy classes, child-care, and so on. Most of the clients served by these programs are seniors, people with disabilities, very low-income households, and people experiencing homelessness. The City uses a combination of its annual Community Development Block Grant (CDBG) from the federal government to fund these grants, and a smaller supplemental amount from the City’s General Fund.
Applications for the human services grants are solicited every two years, following hearings held by the Housing and Human Services Commission (HHSC) and City Council to determine the City’s current “priority human service needs”. Human service grants are awarded conditionally for a two-year period, with the second-year grants conditioned on several factors, such as successful completion of the grant activity in the first year, compliance with the terms of the grant agreement, and availability of federal funding for the second year.
Sunnyvale establishes priority needs to help guide human service grant applications. These priorities, determined through this hearing process, will help decide how the City’s funds for human services are allocated over the next two years. The total amount of funding requested usually exceeds the amount available by a factor of two or more. It is helpful for applicants to know the priorities so that they better determine if their programs are likely to succeed in receiving a grant through the City’s grant program. This program is competitive and, typically, not all grant applicants will be funded. Programs that address needs other than the identified priority needs are not excluded from this grant program, although proposals addressing one or more of the priority needs will be awarded more points in the “need” category than those addressing non-priority needs.
After the list of priority needs has been recommended by the HHSC and approved by City Council, staff will issue a request for proposals (RFP) for human services programs funded through both General Fund and CDBG. The key difference in funding source is the dollar amount of the grant (CDBG currently only funds grants and/or loans exceeding $25,000), and the ability of the non-profit to manage federal funds vs. local funding. The HHSC will review and comment on the draft RFP before it is published. After proposals are reviewed by staff for eligibility and issued technical scores by the staff scoring committee, the HHSC will hold at least two public hearings to evaluate the eligible proposals and recommend grant awards to City Council. City Council will consider the recommended grant amounts and make final funding decisions in May 2025.
In addition to determining the priority needs, City Council has also established a practice of determining the amount of General Funds to be provided for human services grants to supplement the CDBG funds. This process, known as supplemental funding, is described further in the Discussion section of this report.
City Council will consider this item at its November 12, 2024, meeting.
EXISTING POLICY
Council Policy 5.1.3, Human Services
The City will biennially, prior to adoption of the two-year Resource Allocation Plan, review prevailing conditions of human needs within the City and give appropriate attention to Human Services Policies in the City. The Housing and Human Services Commission, following one or more public hearings, will recommend to City Council priority human service needs for the next two years. Following a public hearing, City Council will adopt a two-year priority of human service needs.
The City seeks to meet as many Human Service needs as possible using its limited available resources. The primary resource utilized for funding human services is the
Federal Community Development Block Grant (CDBG) Program, which permits up to 15% of the annual grant entitlement to be utilized for such purposes. The City Council may choose to supplement CDBG funding of human services through the annual budget process.
City’s 2020-2025 Consolidated Plan, Strategic Plan-25, Priority Needs
Goal 3: Other Community Development Efforts
Goal Description: Support provision of essential human services, particularly for special needs populations.
City’s 2020-2025 Consolidated Plan, Strategic Plan-45, Goals Summary
Goal 5: Public Services
Goal Description: Human Services Grants
Housing Element of the General Plan
Program H32. Programs to Address Homelessness. Continue to provide funding for programs that seek to prevent and end homelessness and provide supportive services to homeless and at-risk clients. Continue to implement programs such as WorkFirst Sunnyvale and Tenant-Based Rental Assistance. Using new funds such as Permanent Local Housing Allocation and HOME-ARP, create and fund new programs that support the City’s residents who are experiencing homeless or at risk of homelessness.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment. Any future project funded with federal CDBG funding will undergo environmental review as required by CEQA and NEPA.
DISCUSSION
Part 1: Determining Priority Needs
Since most human service grants are funded through federal CDBG funds, the funded projects/programs must be consistent with the priority needs outlined in the City’s 2020-2025 Consolidated Plan (Con Plan). The Con Plan (Attachment 3) is a five-year strategic plan that the U.S. Department of Housing and Urban Development (HUD) requires the City to prepare as a condition of receiving the CDBG grant. HUD understands that the priority needs may change over the five-year period of the Con Plan. This biennial hearing gives the public and local officials a chance to adjust the priority list if local conditions change. It also allows the public to bring up any issues related to how the City plans to allocate its CDBG and general funds in the coming two years.
The Con Plan, adopted by Council in July 2020, includes the following list of priority needs for human services and prioritized client types:
Priority Client Types
Very low-income, extremely low-income, and/or special needs households (e.g., seniors, disabled, people experiencing homelessness, children, youth, victims of domestic violence, etc.).
Priority Needs (Service Types)
A. Basic needs (e.g., food, shelter, transportation, health & mental health care, employment assistance/training, childcare, etc.).
B. After school or intervention programs to provide youth with positive alternatives to drugs, violence, and/or gangs (e.g., 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.
Staff has begun working on the 2025-2030 Consolidated Plan; the effort is led by a Consultant and each City in Santa Clara County participates in the update process collaboratively. The needs determined by the Council and community through this process will be relayed into the new Consolidated Plan update. The Consolidated Plan is scheduled to be adopted in Spring 2025 ahead of the new fiscal year.
Part 2: Determining Supplemental Funding Amount
The second purpose of this hearing is to recommend the General Fund supplemental funding amount for the coming year, in accordance with past Council direction. As noted above, for many years Sunnyvale has provided funding for the human services grants using CDBG and General Funds (supplemental funds). Over 40% of the funding for the public service grants has come from the City’s General Fund in recent years.
Following Council direction in 2018, the planned expenditure for General Funds is $135,000 annually for human services grants for each of the next twenty years in the Resource Allocation Plan, including fiscal years (FY) 2025/26 to 2026/27. Council confirms this appropriation annually when adopting the City budget each June and has an opportunity to affirm or modify the amount planned for the coming year during the biennial priority needs hearing.
During previous priority needs hearings in 2020 and 2022, the idea of increasing the biennial supplemental General Fund amount based on increases in population or by CPI was considered but not approved for ongoing consideration.
The amount of supplemental and CDBG funds provided for human services over the past eight fiscal years is shown in Attachment 2. As seen in this table, the amount of CDBG funding available for human services has decreased over recent years. Since the amount of CDBG that can go towards public services is so limited, historically the City has also allocated a small portion of CDBG Program Income (PI) received from CDBG loan repayments towards human services. However, due to a variety of reasons, less PI has been allocated towards public services leaving less available funds for human service grantees.
To help offset the reduction in available CDBG public services funding, and to assist with rising costs for grantees, staff recommends increasing the next two FY general fund supplement by $15,000 per year, to a total of $150,000 per year. Increasing the funding might also encourage new agencies or programs to consider applying for funding to support Sunnyvale residents.
It is important to emphasize that the supplemental funding amount recommended at this time is used for planning purposes only and does not constitute a budget appropriation of any kind. Staff uses the recommended amount approved by City Council in November to indicate in the RFP how much funding of each type (CDBG or General Funds) is estimated to be available for human services grants in the coming year. The RFP will emphasize that these amounts are just estimates and could change by the time the City budget is adopted in June 2025. The RFP will further note that any grant award recommendations are contingent on the amount of funding ultimately appropriated by Congress (for the CDBG funds) and City Council (for the General Funds).
FISCAL IMPACT
There is no direct fiscal impact related to approval of the list of priority needs. If the City Council provides direction to staff to adjust the amount of supplemental funding for human services grants, staff will incorporate the changes while preparing the FY 2025/26 Recommended Budget for Council consideration.
PUBLIC CONTACT
Public contact was made through posting of the Housing and Human Services agenda on the City's official-notice bulletin board, on the City’s website, and by making the agenda and report available in the Office of the City Clerk.
ALTERNATIVES
Recommend the City Council:
1. Approve the list of priority needs as stated in the staff report, excerpted from the City’s 2020-2025 Consolidated Plan submitted to the Department of Housing and Urban Development.
2. Approve the list of priority needs as stated in the staff report, excerpted from the City’s 2020-2025 Consolidated Plan submitted to the Department of Housing and Urban Development, with modifications.
3. Direct staff to adjust the General Fund appropriation for human services grants to $150,000 for FY 2025/26 and FY 2026/27 to be included in the FY 2025/26 Recommended Budget.
4. Direct staff to maintain the General Fund appropriation of $135,000 for human services grants for FY 2025/26 and FY 2026/27, consistent with the current Adopted Budget and 20-year Resource Allocation Plan.
5. Direct staff to adjust the General Fund appropriation for human services grants to an amount determined by the Commission for FY 2025/26 and FY 2026/27 to be included in the FY 2025/26 Recommended Budget.
STAFF RECOMMENDATION
Recommendation
Recommend to the City Council Alternatives 1 and 3: 1) Approve the list of priority needs as stated in the staff report, excerpted from the City’s 2020-2025 Consolidated Plan submitted to the Department of Housing and Urban Development; and 3) Direct staff to adjust the General Fund appropriation for human services grants to $150,000 for FY 2025/26 and FY 2026/27 to be included in the FY 2025/26 Recommended Budget.
JUSTIFICATION FOR RECOMMENDATION
The current list of priority needs is broad enough to encompass virtually all types of human services; therefore, modification of the list does not appear to be necessary. Increasing the supplemental funding amount to $150,000 per year (an increase in $15,000 per year) is recommended as the cost of goods and services has increased rapidly over recent years, and that CDBG public services funding remains very limited. This minor increase can support existing grantees, expand services, and even attract new grantees to providing these critical services in Sunnyvale.
Staff
Prepared by: Jenny Carloni, Housing Officer
Reviewed by: Dennis Jaw, Interim Director of Finance
Reviewed by: Shaunn Mendrin, Acting Director, Community Development
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Reserved for Report to Council
2. Five-Year Human Services Funding Levels
3. Link to Draft 2020-2025 Consolidated Plan