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HomeMy WebLinkAbout10 - Second Substantial Amendment to the 2020-21 Annual Action Plan for the Federal Community Development Block Grant ProgramQ SEW Pp�T CITY OF z NEWPORT BEACH cy<i Fo� P City Council Staff Report July 13, 2021 Agenda Item No. 10 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Seimone Jurjis, Community Development Director - 949-644-3232, sjurjis@newportbeachca.gov PREPARED BY: Fauna Shrago, Administrative Analyst, fshrago@newportbeachca.gov James Campbell, Deputy Community Development Director, jcampbell@newportbeachca.gov PHONE: 949-644-3236 TITLE: Resolution No. 2021-64: Second Substantial Amendment to the 2020-21 Annual Action Plan for the Federal Community Development Block Grant Program ABSTRACT: For the City Council's consideration is a resolution to approve a second substantial amendment to the 2020-21 Action Plan for the Federal Community Development Block Grant Program. Under the 2020 federal stimulus plan — Coronavirus Aid, Relief, and Economic Security Act (CARES Act) - the City of Newport Beach (City) is the recipient of additional CARES Act funds through its participation in the U.S. Department of Housing and Urban Development's Community Development Block Grant (CDBG) Program. The City will receive additional CDBG-CV funds from the CARES Act in the amount of $741,079 (CDBG-CV3). The City has drafted a Second Substantial Amendment to the 2020-2021 Annual Action Plan to fund activities and projects that prevent, prepare for, and respond to COVID-19. This Second Substantial Amendment to the 2020-2021 Annual Action Plan is required to notify HUD how the City plans to allocate the CDBG-CV3 funds to projects and activities that meet the eligibility requirements of the CARES Act. RECOMMENDATION: a) Conduct a public hearing to receive comments on the Draft Second Substantial Amendment to the 2020-21 Annual Action Plan; b) Find the approval of the Second Substantial Amendment to the 2020-21 Annual Action Plan exempt from the National Environmental Policy Act (NEPA") pursuant to 24 CFR Part 58, Section 58.34; 10-1 Resolution No. 2021-64: Second Substantial Amendment to the 2020-21 Annual Action Plan for the Federal Community Development Block Grant Program July 13, 2021 Page 2 c) Find the approval of the Second Substantial Amendment to the 2020-21 Annual Action Plan is exempt from the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly; d) Adopt Resolution No. 2021-64, A Resolution of the City Council of the City of Newport Beach, California, Approving a Second Substantial Amendment to the 2020-21 Annual Action Plan for the Federal Community Development Block Grant Program; and e) Authorize the City Manager to: 1. Submit the Second Substantial Amendment to the 2020-21 Annual Action Plan to HUD; 2. Execute the CDBG-CV3 Program Grant Agreement and all related documents on behalf of the City; 3. Authorize the Community Development Director, or his/her designee, to be the official representative of the City of Newport Beach, and to submit required environmental documentation for CDBG projects. DISCUSSION: The City receives a formula grant allocation of CDBG funds each year from the federal government, through the U.S. Department of Housing and Urban Development (HUD). The objective of the CDBG program is to develop viable urban communities by providing suitable housing and expanding economic opportunities for low- and moderate -income residents. Under the 2020 federal stimulus plan - CARES Act, the City initially received $210,324 in "Round 1" CDBG-CV funds to be used for activities that prevent, prepare for, or respond to the impacts of COVID-19. The City Council allocated those funds to an economic development program to assist small business suffering from hardship due to COVID-19. To date the program has assisted 22 businesses with an allocation of $130,000. Several more businesses are currently under review. The City was not allocated any "Round 2" CDBG-CV funds. The City will receive an additional $741,079 of "Round 3" CDBG-CV funding from HUD. These funds are identified as CDBG-CV3. The City has identified activities and projects for low- and moderate -income persons to prevent, prepare for, and respond to COVID-19, including housing instability services and health crisis outreach. 10-2 Resolution No. 2021-64: Second Substantial Amendment to the 2020-21 Annual Action Plan for the Federal Community Development Block Grant Program July 13, 2021 Page 3 Proposed Second Substantial Amendment to 2020-21 Annual Action Plan In order to program the annual grant allocation earmarked for a future economic development program and the CARES Act funds to a specific activity, the City must prepare and submit to HUD a Second Substantial Amendment to its 2020-21 Annual Action Plan. The funding levels recommended below anticipate the City will assist approximately 30 people impacted by COVID-19. The funding sources and amounts to be allocated to projects and services to prevent, prepare and respond to COVID-19 are outlined in the table below, and are also reflected in the Amendment, which is included as Exhibit A to Attachment A to this staff report. CDBG-CV3 Funds Category Recommended Administration (subject to 20% grant cap) CDBG Program Administration — A portion of these $24,000 funds will be used to pay the indirect or direct administrative cost including planning the use of funds, and processing all required grant administration documents, monitoring and reporting to HUD in compliance with federal regulations Public Services COVID-19 Prevention, Preparedness and Response $717,079 Services — Provide public services and programs that prevent, prepare for, and respond to COVID-19, which may include comprehensive behavioral and mental health intervention and outreach, emergency subsistence, mobile crisis services and other activities to provide education, testing, vaccinations, diagnosis and treatment, and other materials and supplies necessary to support social distancing, and promote community health, safety and stability Total $741,079 FISCAL IMPACT: This item provides for City Council approval to administer for $741,079 in CDBG-CV3 funds for the 2020-21 fiscal year, for a total of $960,403 in CDBG-CV funds under the 2020-2021 Annual Action Plan. There is no fiscal impact to the General Fund. 10-3 Resolution No. 2021-64: Second Substantial Amendment to the 2020-21 Annual Action Plan for the Federal Community Development Block Grant Program July 13, 2021 Page 4 ENVIRONMENTAL REVIEW: The development of required plans and allocation of CDBG program funds is an administrative activity exempt under 24 FR Part 58, Section 58.34 of the National Environmental Policy Act of 1969 (NEPA), as amended. Staff recommends the City Council find approval of the Second Substantial Amendment to the 2020-21 Annual Action Plan is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. NOTICING: In accordance with the HUD -approved waiver of CPD Grant Program Requirements to Prevent the Spread of COVID-19 and Mitigate Economic Impacts caused by COVID-19, the 5 -day public review and comment period, notice of the public hearing was published on the City's website on July 2, 2021. Notice was also emailed to all parties that have signed up to receive notifications from the Community Development Department. Further, the agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). Subject to a HUD -approved waiver the document was prepared and made available for a review and comment period, which began on July 3, 2021, and concludes with this public hearing before the City Council on July 13, 2021. ATTACHMENT: Attachment A — Resolution No. 2021-64 10-4 Attachment A Resolution No. 2021-64 10-5 RESOLUTION NO. 2021-64 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, APPROVING A SECOND SUBSTANTIAL AMENDMENT TO THE 2020- 2021 ANNUAL ACTION PLAN FOR THE FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM WHEREAS, the City of Newport Beach ("City") participates in the United States Department of Housing and Urban Development ("HUD") Community Development Block Grant ("CDBG") Program; WHEREAS, HUD requires the City to prepare a Five -Year Consolidated Plan for the use of HUD grant programs outlining the use of the CDBG funds and the strategic vision for housing and community development in the City; WHEREAS, the City Council adopted Resolution No. 2020-51 on May 12, 2020, approving the 2020-2024 Consolidated Plan, the 2020-2021 Annual Action Plan, and the Citizen Participation Plan for the CDBG Program; WHEREAS, the 2020-2021 Annual Action Plan appropriates the CDBG annual grant and other available grant funds during the fiscal year; WHEREAS, as a result of COVID-19, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") in March 2020, authorizing $2.2 trillion in stimulus measures to prevent, prepare for, and respond to the COVID-19 pandemic, including making available $5 billion in Community Development Block Grant Coronavirus ("CDBG-CV") funds for CDBG entitlement communities; WHEREAS, on July 14, 2020, the City Council adopted Resolution No. 2020-69 approving the substantial amendment to the 2020-2021 Annual Action Plan and authorizing the City to receive $219,324 in CDBG-CV funds, which is separate and distinct from the City's regular allocation of CDBG funds; WHEREAS, in September 2020, a third round of CDBG-CV funds in the amount of $2 billion was allocated to state and local governments, of which the City will receive $741,079 ("Round 3 Funds"); WHEREAS, a second substantial amendment to the 2020-2021 Annual Action Plan is necessary to appropriate the Round 3 Funds to support activities and services to prevent, prepare for, and respond to the COVID-19 pandemic; Mel Resolution No. 2021 - Page 2 of 4 WHEREAS, in the event of a substantial amendment to an annual action plan, the Citizen Participation Plan normally requires a 30 -day public review period followed by a public hearing prior to adoption; however, in light of COVID-19, HUD reduced the notice period to five days and authorized the City to determine the form of notice pursuant to the Waivers of Community, Planning and Development ("CPD") Grant Program Requirements to Prevent the Spread of COVID-19 and Mitigate Economic Impacts caused by COVID-19; WHEREAS, on July 2, 2021, the City published a notice on the City's website and sent e-mail notification that the draft second substantial amendment to the 2020-2021 Annual Action Plan would be available to the public for review and comment from July 3, 2021 to July 13, 2021; WHEREAS, a hearing was held by the City Council on July 13, 2021 in the City Council Chambers located at 100 Civic Center Drive, Newport Beach, California. A notice of time, place and purpose of the public hearing was given in accordance with the Ralph M. Brown Act and the Waivers of CPD Grant Program Requirements to Prevent the Spread of COVID-19 and Mitigate Economic Impacts approved by HUD. Evidence, both written and oral, was presented to, and considered by the City Council at this public hearing -,and WHEREAS, the City Council desires to amend the 2020-2021 Annual Action Plan and approve the second substantial amendment to the 2020-2021 Annual Action Plan. NOW, THEREFORE, the City Council of the City of Newport Beach resolves as follows: Section 1l: The City Council hereby approves the second substantial amendment to the 2020-2021 Annual Action Plan as provided in Exhibit A, attached hereto and incorporated herein by reference. Section 2: The City Council does hereby authorize: (a) the City Manager, or his/her designee, to: 1) submit the 2020-2021 Annual Action Plan as amended to HUD; 2) execute the Round 3 Funds grant agreement and all related documents on behalf of the City; and 3) execute all subrecipient agreements with the organizations receiving allocations of CDBG and CDBG-CV funds in the 2020-2021 Annual Action Plan as amended; and (b) the Community Development Director, or his/her designee to be the official representative of the City to administer the program and submit required environmental documentation to HUD for CDBG projects. 10-7 Resolution No. 2021 - Page 3 of 4 Section 3: The recitals provided in this resolution are true and correct and are incorporated into the operative part of this resolution. Section 4: If any section, subsection, sentence, clause or phrase of this resolution is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity or constitutionality of the remaining portions of this resolution. The City Council hereby declares that it would have passed this resolution, and each section, subsection, sentence, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid or unconstitutional. Section 5: The City Council finds the approval of the second substantial amendment to the 2020-2021 Annual Action Plan is exempt under 24 CFR Part 58, Section 58.34 of the National Environment Policy Act of 1969 (NEPA), as amended. Section 6: The City Council finds the adoption of this resolution and the approval of the second substantial amendment to the 2020-2021 Annual Action Plan is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. M: Resolution No. 2021 - Page 4 of 4 Section 7: This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting the resolution. ADOPTED this 13th day of July, 2021. Brad Avery Mayor UAa1*36 Leilani L Brown City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Mme-- C Aaron C. Harp City Attorney Attachment: Exhibit A — Second Substantial Amendment to the 2020-2021 Annual Action Plan 10-9 Community Development Block Grant Program CARES Act Second Substantial Amendment Annual Action Plan FY 2020-2021 This page intentionally left blank. 10-11 NEWPORT BEACH CITY COUNCIL Brad Avery Mayor Kevin Muldoon Mayor Pro Tem Noah Blom Council Member Joy Brenner Council Member Diane B. Dixon Council Member Duffy Duffield Council Member Will O'Neill Council Member 10-12 This page intentionally left blank. 10-13 TABLE OF CONTENTS *1740401111111 LVA ill aIaF-Al � Background.............................................................................................................................................................................. 2 Sources..................................................................................................................................................................................... 2 Useof CDBG-CV3 Funds................................................................................................................................................... 3 AP -15 EXPECTED RESOURCES...........................................................................................................................................5 MatchingRequirements........................................................................................................................................................5 AP -20 ANNUAL GOALS AND OBJECTIVES................................................................................................................... 6 AP -35 PROJECTS AND ACTIVITIES.................................................................................................................................... 7 AP -90 PROGRAM SPECIFIC REQUIREMENTS.................................................................................................................9 Appendices Appendix A Citizen Participation Appendix B SF -424, SF -424D, Certifications CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 10-14 EXECUTIVE SUMMARY Background Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) which was signed by the President on March 27, 2020, to respond to the growing effects of this historic public health crisis. The CARES Act made available $5 billion in Community Development Block Grant Coronavirus (CDBG-CV) funds to prevent, prepare for, and respond to the COVID- 19 pandemic. As a recipient of Community Block Development Grant (CDBG) funds, the City of Newport Beach is eligible to receive CDBG-CV funds from the U.S. Department of Housing and Urban Development (HUD). The CDBG-CV funds are separate and distinct from the City's regular CDBG funds. CDBG-CV funds must be used to prevent, prepare for, or respond to the COVID-19 pandemic, and may not be used to supplant other funding sources. Additionally, CDBG- CV funds must meet a CDBG program national objective, and the activity must be CDBG-eligible. HUD also provides for communities to accept several regulatory waivers that facilitate the rapid use of CDBG-CV funds. The regulatory waivers and flexibilities are intended to prevent the spread of COVID-19 and facilitate assistance to households and businesses economically impacted by COVID-19. Sources CDBC,-CVFunding — Raind 1 The City of Newport Beach initially received $219,324 in "Round 1" CDBG-CV funds (CDBG-CV1) to be used for activities that prevent, prepare for, or respond to the impacts of COVID-19. City Council held a public hearing in July 2020 to substantially amend the 2020-2021 Annual Action Plan to allocate CDBG-CV1 funds to an Economic Development — CDBG Small Business Grant Program to assist small businesses suffering from economic hardships resulting from the COVID-19 pandemic. CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 2 10-15 The substantial amendment to the 2020-2021 Annual Action Plan was adopted on July 14, 2020 by Resolution 2020-69, allocating CDBG-CV1 funds as follows: Economic Development — CDBG Small Business Grant Program $175,460 CDBG Program Administration $43,864 Total CDBG-CV1 $219,324 CDBC,-CVFunding - Round 2 "Round 2" of CDBG-CV funding (CDBG-CV2) was allocated only to states. Therefore, the City of Newport Beach did not receive CDBG-CV2 funds. MBC,CVFunding - Round 3 The City of Newport Beach will receive the following grant under CDBG-CV "Round 3" funds (CDBG-CV3) from HUD: CDBG-CV3 $741,079 MBC,-CVFunding — All Collectively, the City of Newport Beach is the recipient of the following tota CDBG-CV funds: CDBG-CV1 $219,324 CDBG-CV3 $741,079 Total CDBG-CV $960,403 Use of CDBG-CV3 Funds This Second Substantial Amendment to the 2020-2021 Annual Action Plan allocates CDBG-CV3 funds, to support the CDBG Program. With the overall goal of preventing, CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 3 10-16 preparing for, and responding to COVID-19, the following proposed projects and activities will utilize the CDBG-CV3 funds, subject to the CARES Act and emerging policy from HUD, including program regulations and waivers: COVID-19 Prevention, Preparedness and Response Services $717,079 CDBG-CV Program Administration Total CDBG-CV3 $24,000 $741,079 CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 4 10-17 AP -15 EXPECTED RESOURCES The CARES Act CDBG-CV3 allocation from HUD is in the amount of $741,079. The period of performance for CDBG-CV grants under the law is from March 27, 2020 to September 30, 2022. Table 1 — Expected Resources Matching Requirements The Cares Act allocation of CDBG-CV funds does not require a local matching funds contribution. Note: Information on this page will also be used to update the 2020-2024 Consolidated Plan "SP -35 Anticipated Resources" section, adding the CDBG-CV3 allocation shown in Table 1. CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 5 10-18 Expected Amount Available Narrative NarNarri Program Uses of Funds Program Prior Year P tion Allocation: Income: Resources: Total: CARES Act Public Services allocation of CDBG- $741,079 $0 $0 $741,079 CDBG to CV3 Administration address COVID- 19 Matching Requirements The Cares Act allocation of CDBG-CV funds does not require a local matching funds contribution. Note: Information on this page will also be used to update the 2020-2024 Consolidated Plan "SP -35 Anticipated Resources" section, adding the CDBG-CV3 allocation shown in Table 1. CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 5 10-18 AP -20 ANNUAL GOALS AND OBJECTIVES Table 2 — Goals and Objectives Goal Name Time Period Category Needs Addressed Funding Goal Outcome Indicator Provide public Non -Housing Goal 1 for low -and Public Services 2020-2022 Communityservices moderate -income $717,079 30 Persons Assisted Development residents Description: Provide public services and programs that prevent, prepare for, and respond to COVID-19, which may include comprehensive behavioral and mental health intervention and outreach, emergency subsistence, mobile crisis services and other activities to provide education, testing, vaccinations, diagnosis and treatment, and other materials and supplies necessary to support social distancing, and promote community health, safety and stability Goal 2 Program Program 2020-2022 All $24,000 Administration N/A Administration Subject to the CARES Act and emerging policy from HUD A portion of CDBG-CV funds may be used to pay the indirect or direct administrative cost including planning the use of funds, and processing all required grant administration documents, monitoring and reporting to HUD in compliance with federal regulations Note: Information from this page will also be used to update the 2020-2024 Consolidated Plan "SP -45 Strategic Plan Goals" section, adding CDBG-CV3 funds to the Public Services and Program Administration goals. CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 6 10-19 AP -35 PROJECTS AND ACTIVITIES To address the goals and objectives identified in Section AP -20, the City of Newport Beach will invest these funds for the proposed project activities shown in the table below. Table 3 —CDBG-CV3 Project and Activities 1 Project Name COVID-19 Prevention, Preparedness and Response Services Target Area Citywide Goals Supported Public Services Needs Addressed Provide public services for low- and moderate -income residents Funding CDBG-CV3: $717,079 Description Subject to the CARES Act and emerging policy from HUD, including program regulations and waivers, an estimated portion of the CDBG-CV3 funds will be used to provide public services and programs that prevent, prepare for, and respond to COVID-19, which may include comprehensive behavioral and mental health intervention and outreach, emergency subsistence, mobile crisis services and other activities to provide education, testing, vaccinations, diagnosis and treatment, and other materials and supplies necessary to support social distancing, and promote community health, safety and stability Target Date 9/30/2022 Accomplishments Approximately 30 people will benefit from the proposed activities Location Citywide Planned Activities Prevention, Preparedness and Response to COVD-19 Services (30 people) CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 7 10-20 2 Project Name CDBG-CV Program Administration Target Area Citywide Goals Supported Program Administration, CDBG-CV3 Needs Addressed All Funding CDBG-CV: $24,000 Description Subject to the CARES Act and emerging policy from HUD, including program regulations and waivers, a portion of the CDBG-CV3 funds may be used to pay the indirect or direct administrative cost including planning the use of funds, and processing all required grant administration documents, monitoring and reporting to HUD in compliance with federal regulations Target Date 9/30/2022 Estimate the number and type of families that will benefit N/A — Program Administration Location Citywide Planned Activities CDBG-CV3 Program Administration $24,000 CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 10-21 AP -90 PROGRAM SPECIFIC REQUIREMENTS n the implementation of program activities under the CDBG-CV3 Action Plan will follow all HUD regulations and some or all of the waivers made available by HUD concerning compliance matters such as program income, forms of investment, and overall low- and moderate -income benefit (if applicable). Community Development Block Grant -CV Program (CDBG-CV) The following tables address HUD regulatory requirements at 24 CFR 92.220(1)(1) concerning program income and CDBG-CV low- and moderate -income benefit. Table 4 — Program Income 1. The total amount of program income that will have been received before the 0% start of the next program year and that has not yet been reprogrammed 0 2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0 3. The amount of surplus funds from urban renewal settlements 0 4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0 5. The amount of income from float -funded activities 0 Total Program Income: 0 Table 5 — Low- and Moderate -Income Benefit 1. The amount of urgent need activities* 0% 2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low- and moderate -income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low- and moderate -income. Specify the years covered that include this Annual Action Plan. 100% *Note: The amount for Urgent Need activities may change depending on waivers issued by HUD subsequent to this Action Plan amendment. CARES Act Second Substantial Amendment to the 2020-2021 Annual Action Plan 9 10-22 10-23 Summary of Public Comments To be inserted subsequent to the public review and comment period. 10-24 10-25