HomeMy WebLinkAboutAGENDA REPORT 1991 0206 CC REG ITEM 09De
MOORPARK ITEM-9 D's
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MOORPARK. CAUFORNIA
PAUL W. LAWRASON JR. CItYCOLX -a Meeting STEVEN KUENY
Mayor of 199 oop ° °PK 09 ' :OORPARK, CALIFORNIA City Manager
BERNARDO M. PEREZ -1 F ? City Council Meeting CHERYL J. KANE
Mayor Pro Tem ACTION: / of 1991 City Attorney
SCOTT MONTGOMERY o ACTION RICK RICHARDS, A.I.C.P.
Councilmember o9 0° Director of
JOHN E. WOZNIAK °o
Councilmember ^Teo , ,� �0 Community Development
LILLIAN KELLERMAN JOHN F. KNIPE
�� City Engineer
City Clerk JOHN V. GILLESPIE
Chief of Police
RICHARD T. HARE.
M E M O R A N D U M City Treasurer
TO: The Honorable City Council
FROM: Donald P. Reynolds, Jr., Management Analyst;
DATE: January 31, 1991
SUBJECT: Consider the Reappropriation of Community Development
Block Grant (CDBG) Funds from Grant Years 1988 - 1990, in
the Amount of $473,716
Staff has been evaluating several options for the City Council to
consider in working towards meeting the HUD expenditure deadline,
which stipulates that the City will spend $445,500 by April, 1991.
Three options have evolved and are presented to the Council in this
report. All three options involve the acquisition of property with
CDBG funds, (which triggers the Uniform Relocation Assistance and
Real Property Acquisition Policies act of 1970, as amended, or the
URA). In one case it could be used for rehabilitation.
After evaluating the potential of each option to meet the HUD
expenditure deadline of April, 1991, staff recommends that the
Council authorize the reappropriation of funds for an intercity
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allocation loan (or "loan") to the City of Santa Paula. This
project-has progressed further than the other options at this time,
and may not disturb current projects that are being developed for
use of CDBG funds.
Background 1
On October 31, 1991, staff reported to the Council that the CDBG
Entitlement program has been required by HUD to meet an expenditure
deadline. The Council authorized staff to pursue an extension to
the deadline from HUD, and to explore the feasibility of a proposed
affordable housing project. The extension would allow the City to
include phase two of the Virginia Colony street improvements the
expenditure reports to HUD. Phase two is estimated to cost
approximately $90,000 which is less than the amount needed. The
exact amount needed to be identified as a projected expense by the
City is $280,960 (as presented in Attachment "A," entitled "Current
Projection of City CDBG Expenditures ").
799 Moorpark Avenue Moorpark, California 93021
:_ -- - -- (805) 529 -6864
On December 19, 1991, staff returned to the Council in order to
provide current information regarding the status of City CDBG
expenditures. The status of expenditures warranted further
consideration by staff of the possibility of an intercity
allocation loan to the City of Santa Paula. Staff estimated that
the amount of this loan could be as high as $300,000, and that
after the bid opening for the Nogales Avenue /Avenida Colonia street
improvement project had been completed, that a more precise amount
could be derived. The bid award closely matches the City
Engineer's estimates.
It was also mentioned in this report that penalties may be imposed
against the CDBG Entitlement program for not meeting the HUD
objective. In the event that this occurs, each participating
agency would receive a portion of the penalty relative to the
portion of funds which were not expended before the deadline.
An intercity allocation loan will not qualify as a program
expenditure unless the city which receives the loan can expend the
funds by April, 1991.
Discussion
Staff has continued to investigate options for the City to consider
in order to meet the HUD objective. Three options have been
identified at this time; 1) assisting the Boys and Girls Club
purchase land for a new site, or rehabilitation of the buildings at
this site, 2) affordable housing land acquisition and 3) an
intercity allocation loan to the City of Santa Paula that will
assist them in acquiring property for a community center. Many
factors have to be evaluated in order to determine which of these
three options can assist the City in meeting the HUD guidelines,
with a minimal impact to past City appropriations. Staff's
analysis of the three options is provided for the Council in
Attachment "B."
Many different scenarios have been analyzed by staff, and the
conclusion is that at least $281,000 must be considered for a
project which can incur costs as soon as possible (Attachment "All).
All three current City options involve land acquisition (the URA
procedures), and one may include rehabilitation. Two of the three
options are clearly eligible for CDBG appropriations; affordable
housing land acquisition and the intercity allocation loan to Santa
Paula. The third option of assisting the Boys and Girls Club, must
first be evaluated in terms of its eligibility (whether CDBG is
used for acquisition or rehabilitation), and the ability of the
proposed site to remain eligible for the life of Club's use of the
facility. Staff's conclusion is that the acquisition project which
has proceeded the furthest at this time, should be considered as
the best option for the City to take in meeting the HUD objective.
The City of Santa Paula reports that the environmental documents
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have been completed for the acquisition of a site for a community
center. The URA process has been initiated and a tentative
agreement between the City and the property owner is being
developed. This option is the best for the City to consider at
this time, because the risk of not meeting the deadline is reduced
by Santa Paula's progress. This option is also a favorable choice,
because current appropriations are not deleted, just delayed.
Detailed Consideration of the Intercity Allocation Loan Option
An intercity allocation loan (loan) does not by itself constitute
an expenditure for the County Entitlement CDBG program. Santa
Paula must be able to show the expenditure before April. The loan,
when repaid to the City, will be part of HUD's evaluation of
project progress and will be subject to the same expenditure
requirements.
Santa Paula has been very cooperative in discussions about the loan
option. Two aspects of the administration of the loan have
surfaced as a result of these discussions; time frame for repayment
and responsibility for meeting the deadline. Currently, a proposed
repayment schedule of the loan has been discussed as a partial
repayment spread over a three year period. Because of the time
allotted for this process to occur between now and March 30, 1991,
Santa Paula prefers that if a loan is made, and they cannot spend
the funds before the deadline (through no fault of the City of
Santa Paula) and a penalty is assessed against the CDBG Entitlement
program, that the penalty be applied to Moorpark's future funding,
not to Santa Paula's. This same risk applies to Moorpark, should
the Council decide against a loan, and the selected option takes
too long for the City to complete.
Impact on Future Appropriations
Programs have to be developed which would include the additional
funds proposed as repayment of an intercity loan. On January 9,
1991, staff recommended that street improvements receive large
amounts of funding, so that 1000 of construction could be funded by
CDBG. If projects are developed which exceed current CDBG funding
levels, then consideration for use of loan repayments may be
included in the development of these proposals.
The affordable housing land acquisition project will have had 9
months to progress towards planning permit approval, (which is when
funds are available from 1992 CDBG appropriations in September).
The Council can consider postponing funding for this project until
March, which allows the City planning staff a better opportunity to
evaluate the proposed project, (assuming that the developer files
for a development permit in the near future).
In addition to the purchase of property, the Boys and Girls Club
may request financial assistance for the rehabilitation of the
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structures at the site. Once Club eligibility is established there
may be other projects which can be considered by the Council as
part of the March 20, 1991, public hearing.
Recommendation:
That the City Council:
1) Reappropriate $287,056 of past CDBG appropriations as follows:
A) Reappropriate $30,366 from public improvements and
$75,000 from affordable housing projects (for a total of
$105,266) to an intercity allocation loan to the City of
Santa Paula for CDBG program year 1988/89;
B) Reappropriate $20,000 from public improvements and
$117,000 from affordable housing projects (for a total of
$137,000) to an intercity allocation loan to the City of
Santa Paula for CDBG program year 1989/90;
C) Reappropriate $44,790 from affordable housing projects to
an intercity allocation loan to the City of Santa Paula
for CDBG program year 1990/91.
2) Authorize staff to meet with the City of Santa Paula
representatives and arrange an agreement for an allocation
loan of CDBG funds from Moorpark to the City of Santa Paula as
soon as possible;
3) Authorize staff to return to Council in the near future
(targeting February 20, 1991), with a draft allocation loan
agreement and request approval of this document for the
Mayor's signature;
4) Allow staff to continue working with the Boys and Girls Club
of Moorpark in determining the eligibility of CDBG assistance
to the Club for future consideration of City CDBG
appropriations.
Attachments:
A) Current Projection of City CDBG Expenditures
B) Analysis of Three Options for the City in Meeting the HUD
Objective
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ATTACHMENT A
SCENARIO CURRENT PROJECTION OF
CITY EXPENDITURES
(without Allocation Loan to the City of Santa Paula)
PROD. PROJECT NAME
TOTAL
EXPENSES
SUB
4/91
4/91 GRANT
PERC. PROJECT
TOPIC & GRANT YEARS
AMOUNT
TO DATE
BALANCE
PROJ.EXP.
YEAR TOTAL
EXP. TOTAL
FACIL. Street Improvements
289832
0
289832
133660
133660
46.12%
186/87/88/89/90
Casa Pacifica /AHA
25000
0
25000
0
0
0.00%
1990
Food Bank Wrhse. Acq.
5000
0
5000
0
0
0.00%
1990
HSNG. CEDC Land Acq.
75000
* 0
75000
0
0
0.00%
1987
Networking for Hsq.
5000
0
5000
0
0
0.00%
General Affd. Hsg.
236790
0
236790
0
0
0.00%
'88/89/90
P'SRVS Senior Life Line
5480
0
5480
5480
5480
100.00%
1989
Senior Nutrition
20000
10000
10000
6000
16000
80.00%
'89/90
Vocational Training
6000
700
5300
1500
2200
36.67%
1989
Literacy Program
8000
3500
4500
1200
4700
58.75%
1989
Legal Services
7000
0
7000
2000
2000
28.57%
1990
Homeless Ombudsman
500
0
500
500
500
100.00%
1990
..........................
Subtotals
..............................
683602
14200
669402
.........
150340
164540
24.07%
Intercity Allocation Loan
287056
Projected Expenditures for the
City with Allocation
Loan
451596
66.06%
* Status of CEDC reimbursement
request
is uncertain
at this time
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ATTACHMENT B
ANALYSIS OF THREE OPTIONS
FOR THE CITY TO CONSIDER
IN MEETING THE HUD OBJECTIVE
The following will summarize the three options mentioned in the
January 30, 1991, staff report to Council regarding the City's
ability to meet the HUD expenditure objective of $445,500 spent by
April, 1991.
Option 1- Assistance for the Boys and Girls Club Site Acquisition
Project Description: CDBG funds would be used to assist the Club
with a down payment for a site that has been identified for a new
Club location. This site is one of three proposed sites to be
opened in 1991.
Milestones: Prior to receiving CDBG funds from the City, the
following milestones will have to be completed:
A) Eligibility
Research needs to be completed in order to identify the
proposed site's beneficiary income eligibility. Staff
requested this information from the Club, but has not
received it as of the date of this report.
B) Environmental Clearance
The project site will have to be evaluated in terms of
environmental impacts to the site and surrounding
community. A preliminary assessment indicates that a
consideration of historical preservation may be involved
in this process, because some buildings are more than 50
years old.
C) URA
The City has adopted a CDBG Relocation /Acquisition
policy, (based on the URA) and this policy will apply to
assistance to the Club for site acquisition. Any
acquisition steps which have already been taken must be
evaluated in terms of meeting the URA policy. In the
event that the regulations have not been followed, the
Club and property owner will have to re -start this
process following the guidelines. It is staff's
understanding that escrow has already be opened for the
C:
site acquisition, and that URA regulations have not been
followed so far.
Summary No work should be initiated on this proposal until the
City and HUD are satisfied that the project is eligible, and will
remain eligible for a long period of time. Once this criteria is
met, than the environmental review can be initiated. Once all
environmental concerns have been addressed, HUD requires a 30 day
public comment for projects of this nature, but during this period,
the URA procedures can be initiated. It is not clear at this time,
if both parties will agree to re -start an appraisal /acquisition
procedure at this juncture.
Option 2- Affordable Housing Land Acquisition
Proiect Description: To assist CEDC in acquiring land for 100 low
and moderate income rental units. A loan of $400,000 of City funds
has been requested, $236,790 of these funds would come from the
Entitlement program.
Milestones: Prior to receiving funds from the City, the following
milestones will need to be completed.
1) Developer must file for a development permit from the
City planning staff;
2) City must make a determination that this project is
feasible based on its use of the land, design standards,
and impact on the surrounding neighborhoods;
3) Environmental clearance must be completed after the
development project has filed its plans with the -City;
4) Land Acquisition in compliance with URA regulations can
be initiated after a preliminary assessment of the
environmental review has been completed.
Summary: Staff has been waiting for the developer to file for a
permit, which was initially scheduled to be filed before the first
of the year. In December, the planning staff requested that the
escrow be extended, in order to allow time for permit processing.
This was accomplished, but because the permit has not been filed,
time for the planning staff is eroding. It is doubtful that the
CDBG and URA regulations could be accomplished before April.
Postponement of funding for the program can wait until September,
1991.
Option 3- Intercity Allocation Loan to The City of Santa Paula
Proiect Description• The City would enter into agreement with the
City of Santa Paula, to loan previously allocated CDBG funds Santa
Paula which would be put use on a project in this City. The
allocation loan will not satisfy the HUD objective unless Santa
Paula can expend the funds by April, 1991. Funds would be repaid
to Moorpark over a period of grant years (which has not yet been
determined). Moorpark would then hold a public hearing to
reappropriate the loaned funds for existing projects, or new
programs. The repaid funds would be subject to HUD expenditure
criteria, and the City should have a plan for their use before
repayment begins.
Milestones: The following are proposed milestones for this
project.
1) Close this public hearing and reappropriate funds as
recommended by staff;
2) Santa Paula City Council will consider accepting the
proposed allocation loan from Moorpark hold in a public
hearing format;
3 ) Santa Paula and Moorpark staff will modify past city CDBG
applications to the County pursuant to each agency's
council action;
5) County staff will assist the cities in preparing the
proposed agreement;
6) County staff will request approval of the modifications
from the County Board of Supervisors;
7) Representatives from County, City of Santa Paula, and
Moorpark will meet and prepare an agreement, the
agreement will then be executed;
8) Santa Paula will repay the City pursuant to conditions
outlined in the agreement.
Project Summary- project has been developed with two
objectives: 1) to assist the CDBG Entitlement program in meeting
the HUD expenditure deadline and; 2) to allow the City to continue
to consider projects which received appropriations in past years.
The Santa Paula allocation loan option has proceeded further than
the other options, and has closely followed CDBG and URA
regulations in completing these milestones. Therefore, it has been
identified to be the project most likely to come to fruition prior
to the April deadline. The Santa Paula loan repayment may be used
by Moorpark for options not selected at this time.
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