REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning and Development Department BY: PHILIP SKEI, Assistant Director Planning and Development Department BRANDON SISK, Senior Management Analyst Community Development Division SUBJECT ..Title Actions pertaining to funding provided by the U.S. Department of Housing and Community Development Office of Community Planning and Development (HUD CPD): 1. ***RESOLUTION - Adopting Substantial Amendment 2023-02 to the Fiscal Year (FY) 2023-2024 Annual Action Plan and authorizing submission to the U.S. Department of Housing and Urban Development (HUD) to reprogram $2,580,129.32 in Community Development Block Grant (CDBG) funds; and authorizing the City Manager or designee to sign all implementing documents as approved to form by the City Attorney (Subject to Mayor's Veto) ..Body RECOMMENDATION Staff recommends the City Council adopt Substantial Amendment 2023-02 to the 2023-2024 Annual Action Plan; and authorize the City Manager or designee to sign all necessary implementing documents as approved to form by the City Attorney. EXECUTIVE SUMMARY To further the City's commitment to develop affordable housing and support the relocation assistance of business impacted by the development of affordable senior housing, staff identified funds from CDBG program savings and activities that would not be completed in a timely enough manner to meet the CDBG required timeliness test. The purpose of the substantial amendment is to acquire land for the development of safe and affordable housing for low-income and special needs households and to provide relocation assistance for businesses impacted by the development of affordable senior housing. BACKGROUND The City of Fresno (City) is a federal entitlement community that receives an annual allocation of grant funds from the U.S. Department of Housing and Urban Development (HUD) for the following entitlement programs: * Community Development Block Grant (CDBG) * HOME Investment Partnerships (HOME) * Emergency Solutions Grant (ESG) * Housing Opportunities for Persons with AIDS (HOPWA) As an entitlement community, the City is required to prepare an Annual Action Plan detailing the uses of entitlement funds to meet its affordable housing and community development goals as outlined in its Consolidated Plan. The City is proposing to make a substantial amendment to its Program Year 2023 Annual Action Plan to reprogram $2,580,129.32 in CDBG program savings and projects that would not be completed in a timely enough manner to meet the CDBG required timeliness test. The City is tested by HUD for timeliness sixty days prior to the end of the program year. Timeliness is not met if the amount of entitlement grant funds undisbursed by the U.S. Treasury and available to the City exceeds a ratio of 1.5 of current year entitlement funds. The City currently has a ratio of 3.04 and must expend, document, and drawdown $10.6 million before the next timeliness test. Staff identified activities that would not be expended by timeliness and would, therefore, need to be reprogrammed. With Substantial Amendment 2023-02 the City is forecasted to meet the next timeliness test. Those activities that are being canceled will be reconsidered in the next program year when they are ready to commence. The substantial amendment reprograms $1,580,129.32 in CDBG funds to acquire land for the development of safe and affordable housing. Additionally, $1,000,000 in CDBG funds will be reprogrammed to meet the City's responsibility to provide relocation assistance to businesses impacted by the development of affordable senior housing at the site on Blackstone and Holland Avenues. Staff will bring project specific agreements for land acquisition and relocation assistance to Council for approval at a future date. Citizen Participation * October 13, 2023: Public Notice distributed via Fresno Bee * October 13, 2023: Public notice distributed on social media, through the Housing and Community Development Division (HCDD) email distribution list * October 13, 2023: Draft documents published to HCDD webpage for 30-day public comment period * November 13, 2023: End of 30-day public comment period ENVIRONMENTAL FINDINGS This is not a project for purposes of CEQA pursuant to CEQA guidelines Section 15378 and is exempt for NEPA purposes pursuant to 24 CFR 58.34. LOCAL PREFERENCE Local preference is not applicable because of the use of federal funding. FISCAL IMPACT Adoption of Substantial Amendment 2023-02 will allow the City to expend $2.5 million of entitlement funding. Attachments: Resolution - Substantial Amendment 2023-02