REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning & Development Department PHIL SKEI, Assistant Director Planning & Development Department BY: MAYRA MERINO, Senior Management Analyst Planning & Development Department SUBJECT ..Title Approve a State and Local Fiscal Recovery Funds (SLFRF) Grant Agreement (Part of the American Rescue Plan Act-ARPA) with Fresno Housing Authority for construction improvements at Promesa Commons, in an amount not to exceed $300,000. (Council District 3) ..Body RECOMMENDATION Staff recommends the City Council approve a State and Local Fiscal Recover Funds (SLFRF) Grant Agreement, part of the American Rescue Plan Act (ARPA), with Fresno Housing Authority for construction improvements at Promesa Commons, in an amount not to exceed $300,000. EXECUTIVE SUMMARY Promesa Commons is a 64-unit multifamily residential development located at 1101 Parkway Drive in Fresno, CA. The project requires improvements to the drainage infrastructure along Olive Avenue on the east side of Highway 99, which are necessary to support future housing units. The funding originally allocated for this project came from the Encampment Resolution Funding (ERF-2R) program, which was approved by City Council on July 27, 2024; however, due to the need to meet funding obligation and performance deadlines, the City now intends to utilize State and Local Fiscal Recovery Funds (SLFRF), part of the American Rescue Plan Act (ARPA), to fulfill this commitment. The Funding change has been agreed upon by the Fresno Housing Authority. BACKGROUND On February 23, 2023, City Council adopted Resolution No. 2023-039, authorizing the department to submit a grant application to California Interagency Council on Homelessness (CAL-ICH) for funding under the ERF-2R program. This funding was designated to help resolve unsheltered homelessness by transitioning individuals in encampments into interim shelters with clear pathways to permanent housing. On June 14, 2023, Cal-ICH awarded the City $17,000,000 for these purposes. City Staff received confirmation from CAL-ICH that expenses associated with permanent affordable housing construction are eligible under the ERF-2R program. On June 27, 2024, City Council approved a $300,000 ERF-2R Agreement with the Fresno Housing Authority for the construction improvements at Promesa Commons. Due to the need to meet funding obligation and performance deadlines, the City has decided to shift the funding source to SLFRF ARPA funds to fulfill the commitment for the Promesa Commons project. Fresno Housing Authority has been notified of this change and agrees with the new funding source and associated requirements. ENVIRONMENTAL FINDINGS On June 25, 2021, the City of Fresno adopted a finding that the proposed project is categorically exempt from the requirements of California Environmental Quality Act (CEQA) pursuant to Class 32/Section 15332 (Infill) of State CEQA Guidelines. None of the exceptions to the exemptions set forth in section 15300.2 have occurred. The project has not changed and as such no further assessment under CEQA is currently required. Additionally, pursuant to the National Environmental Policy Act (NEPA) guidelines, a review of the project activities resulted in a Finding of No Significant Impact. The Housing Authority of the City of Fresno received authorization to use grant funds from the U.S. Department of Housing and Urban Development under Part 58 on September 17, 2021. FISCAL IMPACT There is no impact on the City's General Fund as a result of this action. The agreement will be funded utilizing State Local Fiscal Recovery Funds (Part of the American Rescue Plan Act). Attachment: SLFRF Promesa Commons Agreement