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HomeMy WebLinkAboutItem No. 06 Homekey FundingCity Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 19-694 Agenda Date: 8/11/2020 Status: Approval FinalVersion: 1 File Type: Council Consent Calendar In Control: City Council / Successor Agency Agenda Number: 6) Authorization to Apply for Project Homekey Funding Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE SUBMITTAL OF AN APPLICATION TO THE HOMEKEY PROGRAM. Page 1 City of Lake Elsinore Printed on 8/6/2020 REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Grant Yates, City Manager Prepared By: Nicole Dailey, Assistant to the City Manager Date: August 11, 2020 SUBJECT: Authorization to Apply for Project Homekey Funding Recommendation Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE SUBMITTAL OF AN APPLICATION TO THE HOMEKEY PROGRAM. Background In recent years, homelessness has become one of the most urgent and significant issues facing California. According to the 2020 Riverside County Point-in-Time Count, there are 2,884 homeless individuals in the County, of which 50 are in the City of Lake Elsinore. For the last several years, the City has taken an increasingly proactive approach to address homelessness. In March 2019, the City of Lake Elsinore, in collaboration with the City of Wildomar and the County of Riverside District 1 areas was awarded a $1.5 million grant from California’s new Homeless Emergency Aid Program (HEAP) through the County of Riverside for the House LE/House Wildomar program. This grant is being used to fund a comprehensive regional demonstration project to house chronic homeless individuals through diversion/flex subsidies and rental assistance and provides critical funding for street outreach, law enforcement, housing navigation, enforcement, case management, supportive services into and during housing, and costs of staff, operations, administration, and supplies. With these grant funds, the City in partnership with its non-profit partner, Social Work Action Group (SWAG), and others are finding ways to responsibly provide housing coupled with essential services to persons battling homelessness in our community. These HEAP funds must be expended by June 30, 2021. Then, in June of 2020, the City Council voted to purchase a property located at 215 W. Graham Ave, formerly known as the House of Siloam, for $2,250,000. The property was purchased with the Housing Successor’s Low and Moderate Income Housing Asset Fund (Fund 617) to be used for interim housing in the short-term and permanent extremely low-income housing in the future However, with HEAP funds coming to an end in the next 11 months, the City must seek additional funding sources to continue its efforts. California Governor Gavin Newsom and the California Department of Housing and Community Development has just authorized a $600 million grant as part of Project Homekey to help those experiencing or at risk of homelessness and impacted by COVID-19. More specifically, the Project Homekey Resolution August 11, 2020 Page 2 of 3 funding is being made available to local public entities, including cities, to purchase and rehabilitate housing, including hotels, motels, vacant apartment buildings, and other buildings and convert them into interim or permanent, long-term housing. Of the $600 million in Homekey grant funds, $550 million is derived from the State's direct allocation of the federal Coronavirus Aid Relief Funds (CRF), and $50 million is derived from the State's General Fund. The funding from CRF can be used for capital costs and must be expended by December 30, 2020. Funding from the State’s General Fund can be used for operating subsidies and must be expended by June 30, 2020. The State will disburse funds to cover Homekey-critical costs that are or have been incurred from March 1, 2020, through December 30, 2020. The Notice of Funding Availability (NOFA) was issued on July 16, 2020, and the priority round of applications must be submitted by August 13, 2020. Discussion Following City Council’s approval, the City officially completed the purchase of 215 W. Graham Avenue in early July 2020 and immediately began assessing the property and completing critical repairs. Repairs required included tenting for termites, plumbing and electrical repairs, painting, ADA adaptations, and other required safety improvements for the property. Also, staff has developed a list of other optional or future improvements for the facility dependent on available resources. The City is ideally positioned to apply for Project Homekey based on this recent acquisition and rapid timeline imposed by the State. Staff expects the City and its project to be extremely competitive. Project Homekey presents an opportunity for the City to secure funding for potential use in any or all of the following areas: acquisition reimbursement, rehabilitation and improvements, furnishing, an additional two years of operating support, and, possibly, some long- term planning support. The grant does have requirements for future related operations for the property. However, the State recognizes with such a short timeline and growing unpredictability in this field, that they will remain flexible in its requirements and processes for this grant. As such, staff held a pre- application consultation on August 6, 2020, to discuss its areas of concern to help us navigate the process and future requirements. Staff is committed to ensuring the City maintains full control of the use of this property in the short- and long-term. The grant allows for up to $200,000 from the State per door for capital costs and up to $24,000 per door for an operating subsidy each year. The first $100,000 per door for capital costs requires no match. The next $50,000 per door requires a 1:1 match and the final $50,000 per door requires a 2:1 match. Matching contributions may be obtained from any source. City staff hereby recommends the adoption of the proposed resolution approving staff to proceed with an application for the grant that does not exceed $4,000,000. Staff will submit a priority application by August 13, 2020. If awarded, funds will be allocated in August or September and staff would immediately begin to complete all rehabilitation and furnishings by December 30, 2020, with hopes of using the facility for housing within 90 days. Fiscal Impact None at this time. If awarded, the total project cost would not exceed $4,000,000 and would be covered by Project Homekey with any applicable match coming from previously expended Project Homekey Resolution August 11, 2020 Page 3 of 3 funds. Exhibits A – Resolution RESOLUTION NO. 2020-___ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE SUBMITTAL OF AN APPLICATION TO THE HOMEKEY PROGRAM Whereas, the Department of Housing and Community Development (Department) has issued a Notice of Funding Availability (“NOFA”), dated July 16, 2020, for the Homekey Program (“Homekey” or “Homekey Program”). The Department has issued the NOFA for Homekey grant funds pursuant to Health and Safety Code section 50675.1.1 (Assem. Bill No. 83 (2019-2020 Reg. Sess.), § 21.); and Whereas, City of Lake Elsinore (“Applicant”) desires to apply for Homekey grant funds. Towards that end, Applicant is submitting an application for Homekey funds (“Applicant”) to the Department for review and consideration; and Whereas, the Department is authorized to administer Homekey pursuant to the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31 of the Health and Safety Code). Homekey funding allocations are subject to the terms and conditions of the NOFA, the Application, the Department-approved STD 213, Standard Agreement (“Standard Agreement”), and all other legal requirements of the Homekey Program. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Applicant is hereby authorized and directed to submit an Application to the Department in response to the NOFA, dated July 16, 2020, and to apply for Homekey grant funds in a total amount not to exceed $4,000,000. That amount includes $3,000,000 for capital expenditures (as allowed under Health and Saf. Code, § 50675.1.1, subd. (a)(1)-(6)) and $312,0000 for a capitalized operating subsidy (as allowed under Health and Saf. Code, § 50675.1.1, subd. (a)(7)). Section 2. If the Application is approved, Applicant is hereby authorized and directed to ensure that any funds awarded for capital expenditures are spent by December 30, 2020, and that any funds awarded for capitalized operating subsidies are spent by June 30, 2022. Section 3. If the Application is approved, Applicant is hereby authorized and directed to enter into, execute, and deliver a Standard Agreement in a total amount not to exceed $4,000,000, any and all other documents required or deemed necessary or appropriate to secure the Homekey funds from the Department and to participate in the Homekey Program, and all amendments thereto (collectively, the “Homekey Documents”). Section 4. Applicant acknowledges and agrees that it shall be subject to the terms and conditions specified in the Standard Agreement, and that the NOFA and Application will be incorporated in the Standard Agreement by reference and made a part thereof. Any and all activities, expenditures, information, and timelines represented in the Application are enforceable through the Standard Agreement. Funds are to be used for the allowable expenditures and activities identified in the Standard Agreement. CC Reso No. 2020 - ___ Page 2 of 2 Section 5. Grant Yates, City Manager, or his or her designee, is authorized to execute the Application and the Homekey Documents on behalf of Applicant for participation in the Homekey Program. Section 6. This Resolution shall take effect from and after the date of its passage and adoption. Section 7. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. Passed and Adopted on this at a regular meeting of the City Council of the City of Lake Elsinore, California, this 11th day of August 2020. Brian Tisdale Mayor Attest: Candice Alvarez, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that Resolution No. 2020- ___ was adopted by the City Council of the City of Lake Elsinore, California, at the Regular meeting of August 11, 2020, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Candice Alvarez, MMC City Clerk