SR-300-002-01 (48)
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CjED:CNS:BS:grsr
Council Meeting 1/12/88
JAN 1 2 1988
Santa Monica, California
TO: Mayor and City Council
FROM: City staff
SUBJECT: Recommendation to Hold Community Development Block
Grant Performance Hearing and to Approve the FY1988-89
community Development program Funding Rationale
INTRODUCTION
This report presents a funding rationale for the City's FY1988-89
Community Development Program for approval by City Council. This
funding rationale serves as a guide to city staff and the City
Council in soliciting proposals and allocating funds for the
coming year f s program. The report further recommends that the
City Council hold a public hearing on the FY1986-87 Community
Development Block Grant-funded portion of the program as required
by the City's local community Development Block Grant Ordinance.
BACKGROUND
Each year the City's Community Development Program allocates
approximately $4 million in local and Federal funds for operating
grants to non-profit human service organizations (Community
Service Projects) and support for capital projects benefiting
lower
income residents and neighborhoods
(Community and
Neighborhood Improvement Projects) .
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/I-A
JAN 12 1986
In the past several years, the program has grown substantially in
size and scope and is now recognized as a major source of support
for important, ongoing community programs.
During the current
year, 39 Community Service Projects ($2.675 million) and 9
Community and Neighborhood Improvement Projects ($1.389 million)
were approved by the City Council. The breakdown of support for
the 1987-88 fiscal year is shown in the table below:
General Prop. Rental Redeve1.
Total CDBG Fund A Rehab Agency GRS
COrnmun1ty & Ne1ghb.
Improvements 1,38B,913 918,518 145,895 -0- 197,000 127,500 -0-
COl"J'lUn1 ty SerV1ces 2,675,021 125.913 l,201),674 342,534 -0- -0- -0-
-
4.063.934 1,044,431 2,352,569 342.534 197,000 127,500 -0-
The Community Development Program has met a number of important
goals since its inception:
(1) it has supported a wide range of
human service, housing and community improvement projects for
residents most in need: (2) it has provided stability to a core
group of non-profit service providers in an era of substantial
decreases in funding from other governmental sources; and (3) it
has fostered a number of innovative programs to respond to unmet
needs and gaps in services in Santa Monica.
The funding rationale for the 1987-88 fiscal year encouraged a
competitive !'unding process to ensure that the city had the
flexibility to allocate its funds to the most needed and
.
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Both ongoing and new programs were evaluated on the same
criteria. As a result, a number of programs were reduced or
el imina ted and several programs were enhanced or added to the
roster of City-funded programs.
Additionally, the City incorporated the use of various new
funding mechanisms to implement the FY1987-88 program. These new
mechanisms, in addition to the traditional one-year grants and
one-time capital projects, included:
(I) Renewable Operating Grants: Approximately 65% of all
grantees were awarded funds in FY1987-88 through renewable
operating grants that provide for continued funding in
FY1988-89, contingent upon satisfactory performance and the
availability of funds. The introduction of this new mechanism
was intended to move toward a two-year funding cycle,
allowing for funding stability for those effective, proven
community programs and increased time for planning efforts in
areas of unmet need. As approved by council, nearly 75% (or
$2.01 million) of current Community Service funds and 40% (or
$556,000) of Community and Neighborhood Improvement funds
have been committed to projects that have priority for
funding in FYI988-89.
(2) Contingency Contracts: Six grantees were awarded funds in
FY1987-88 through contingency contracts which clearly specify
performance standards, over and above the standard workplan
obj ecti ves required for all grantees, which must be met in
order to be considered for funding in FY1988-89. The
performance standards were developed based on identified,
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ongoing deficiencies in the organization's administrative or
service delivery functions. In order to encourage attainment
of these standards, city staff provides technical assistance,
as well as monitoring, during the year which is targeted to
improvement in these areas.
The balance of funds were conuni tted to proj ects for one year
through standard operating agreements or one-time capital
projects.
DISCUSSION
Community and Neighborhood Improvement (CNI) Projects
Based on national priorities of the Community Development Block
Grant (CDBG) Program, this component prioritizes the use of
available funds for housing projects and other community
development activities that benefit lower income residents and
lower income neighborhoods. In the past, this component has
provided core funding for the City's affordable housing efforts,
has supported the acquisition and rehabilitation of facilities
for social and community services, and has enhanced lower income
neighborhoods through revitalization activities. Unlike the
Community Service component, it is more targeted in scope and
supports a small number of more capital-intensive projects. The
Communi ty and Neighborhood Improvement component relies almost
entirely on Federal CDBG funds and a limited amount of Federal
Rental Rehabilitation, Redevelopment Agency and city General
funds.
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FY1988-89 Level of Funding: It is projected that the FY19BB-89
CDBG entitlement may be reduced by as much as 7% (or $70,000) due
to Gramm-Rudman federal budget cuts. In addition, it is
anticipated that no Rental Rehabilitation funds will be available
in the coming year, resulting in an additional $200,000 loss to
the program. The proposed funding rationale assumes that the
General Fund and Redevelopment Agency contributions will be
sustained at current FYl987-8B levels.
Given the projected loss of $270,000 in funds for eNI projects (a
20% decrease over FY1987-88) and the fact that a remaining
$556,000 may be committed through renewable operating grants, it
is proj ected that only $563,000 may be available to sustain
current programs such as the Pice Neighborhood Housing Trust Fund
and other one-time capital projects.
Proposed FY1988-89 Funding Rationale: Given the limited amount
of funds available for CN! projects, the following key elements
should guide the funding process in FYl9BB-89:
(1) Funding decisions will be based on the premise that highest
priority should continue to be given to provide critical
support to the City's affordable housing program. However,
these decisions should be made in the context of the total
housing program and on the extent to which currently
appropriated funds are being utilized.
(2) Special consideration will be given to proposals that address
the housing needs of very low income persons, including
families and senior citizens in Santa Monica.
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(3) Other eligible capital proj ects will be considered if they
can be shown to meet a clearly identified and critical
community need.
Special consideration may be given to
one-time eligible projects that will provide stable, improved
facilities for non-profit organizations providing direct
services to low income persons.
(4) Since FY1988-89 represents the 'Imid-point" in a two-year
funding cycle, requests for one-time support will be
prioritized over requests
continued, ongoing funding.
for new programs requiring
(5) In making difficult funding decisions, the following minimum
eligibility requirements and selection criteria will be used:
Minimum Eligibility Requirements
o If the project is to be implemented by an outside agency,
the agency meets the basic eligibility requirements for
grantees detailed on pages 11 and 12 of this report.
o The project primarily benefits low and moderate
persons by ensuring that at least 75% of its
beneficiaries are of low or moderate income: or,
income
direct
o The project primarily benefits low and moderate income
persons by ensuring that at least 51% of the population of
the proj ect area benefited by the proj ect are low and
moderate income persons.
o The project meets Federal eligibility definitions for
CDBG-funded projects.
Selection Criteria
Each eligible project will then be assessed on the extent to
which:
o The project will result in long-term benefit to low and
moderate income residents;
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o The project provides evidence that the proposed program or
proj ect does not duplicate other programs or proj ects in
the community:
o The proposed funding structure leverages City funds with
funds from other sources:
o The project shows long-term potential for a cash return on
the COBG investment and does not require ongoing COBG or
city support for maintenance;
o If the project is to be implemented by an outside
organization, the proposal includes documentation of
current administrative capacity to implement community
development projects and to sustain the project operations
throughout the life of the project, as well as experience
with similar government-assisted programs;
o The implementing agency presents a program that includes
both administrative procedures and a viable implementation
plan for timely execution of the project:
o If a currently-funded project, the agency requesting
funding fully justifies additional support based on timely
expenditure of currently appropriated funds:
o For any housing rehabilitation programs, the program
conforms to HUD program performance standards with an
administrative cost cap of 15% of the total funds
requested:
o For one-time housing acqu.isition/rehabilitation projects,
the total project cost 1S reasonable with the subsidy
request not exceeding $35,000 per unit, at least 75% of the
existing tenants affirm in writing interest in
participating in the program, and the project benefits a
high percentage of very low and low income households.
(*Note: Recently enacted federal requirements concerning
the elimination of lead-based paint hazards may impact the
per unit cost subsidy request.)
Community service projects
Community Service projects are implemented through the award of
operating grants to local, non-profit organizations providing
human services in the community.
Funded categories of service
have included: counseling and advocacy, independent living
services, health care services I legal services, employment and
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training.. emergency assistance.. crime prevention.. citizen
participation, and social service information and referral.
These services have been targeted to a broad range of groups
including youth, families.. adults, seniors, disabled persons.. and
women. In addition, special priority has been given to no or
low-income persons and minority residents in need of services.
In FYl987-88, the funding base for Community Service proj ects
shifted to primary dependence on the General Fund due to the
elimination of the Federal General Revenue Sharing program and
continued decreases in CDBG funding. In addition to major
General Fund support, this component relies on additional support
from CDBG public service funds (up to 15% of each year's
entitlement) and Proposition A funds for paratransit services.
FYl988-89 Level of Funding: As previously mentioned, there may
be a reduction in the overall COBG entitlement and, therefore, a
commensurate reduction in CDBG public service funds of
approximately $10,000. Proposi tion A support is expected to
remain relatively stable in the coming year.
While the total amount of support to be made available from the
city's General Funds cannot be determined until the city.s
overall fiscal situation is assessed as a part of the FYl988-89
budget process, the proposed rationale assumes that, if possible,
the total funding base will be sustained at the current level,
with additional support for justifiable cost-of-living requests.
However, it is important to note that providing this support will
be tied to the city's ability to generate additional general
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revenues during the coming year which are required to meet these
and other funding needs.
Assuming a constant base of funding, approximately $2.675 million
may be available for FY1988-89 projects. Of this base, 75%
($2.01 million) may be committed to renewable operating grants,
13% ($343,000) are restricted Proposition A funds, and only 12%
are currently awarded through one-year or contingency contracts.
Proposed FYl988-89 Funding Rationale: Given that only a small
percentage of the current funding base may be available for
redistribution on a competitive basis, the following funding
guidelines are proposed:
(1) Funding priority will be given to those currently-funded
grantees that were awarded renewable operating contracts in
FY1987-88. Funding will be contingent upon the availability
of funds and the ability of the agency to fully document its
success in meeting contracted workplan objectives in the
current year. Agencies will be required to submit an
abbreviated request for funding consisting of a budget,
workplan, a narrative explaining any proposed changes, and a
description of grantee workp1an performance for the current
year.
(2) Grantees on one-year or contingency contracts will be
required to complete the standard request for proposal.
Furthermore, current grantees on contingency contracts will
be required to submit detailed justification for continued
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funding support, including documentation of progress in
meeting contracted performance standards.
(3) Because FY1988-89 represents the second year of a modified
two-year funding cycle in which major planning efforts are
being undertaken in specified service areas (e.g., youth,
legal services, information and referral), requests for new
or expanded programs will not be accepted. While the
Community Development Program is intended to foster
innovations and improvements in service delivery, initiating
new ongoing proj ects mid-way in the two year funding cycle
and prior to completion of maj or planning efforts that may
yield specific recommendations for improved programs is not
recommended. Therefore, it is recommended that consideration
of funding proposals for new, ongoing programs be deferred
until the completion of these studies in order to maximize
the possibility of some support for these efforts in
FY1989-90.
(4) Additional requests for funds from currently-funded grantees
will be considered for cost-of-living increases with priority
given to the justifiable increases to remedy salary
inequities for direct service staff or specific, documented
program cost increases that, if not funded, will result in
decreased administrative or program delivery functions.
Priority will be given to those agencies serving a high
percentage of lower income clients due to the lack of
fee-generating capacity of those agencies.
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(5) Requests
from
currently-funded
grantees
for
one-time
expenditures or projects
that do not require sustained
funding in future years will also be considered.
Priority
will be given to those agencies requesting $5,000 or less for
one-time items such as equipment purchases, professional
services or activities that will improve the agency's
efficiency, self-sufficiency, or ability to collaborate with
other agencies in the areas of administration, planning,
outreach or service delivery) .
(6) While the funding rationale provides for funding stability
and the maintenance of current programs, program design
improvements to be implemented through the reallocation of
staff resources or creative use of volunteers are encouraged
especially if the changes result in:
o increased outreach and case-finding services to low-income
and minority clients and those isolated residents who are
not assessing services currently (e.g., frail elderly and
disabled residents);
o improved services that encourage client self sufficiency
and the ability to live independently (e.g., money
management for homeless or elderly clients, handyperson and
home clean-up services for elderly and disabled
individuals);
o collaborative efforts between agencies resul ting in
improved direct service delivery and elimination of service
duplications.
(7) In reviewing proposals, the following minimum eligibility
requirements and selection criteria will be used:
Minimum Eligibility Requirements
o The applicant has non-profit, tax-exempt status under
section 501(c)(3) of the Internal Revenue service Code or
Section 23701(d) of the California State Franchise Tax Code
at the time of application.
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o The grantee is in compliance with the civil Rights Act of
1964 and the Rehabilitation Act of 1973, as amended, which
bars discrimination in the hiring of staff or provision of
services on the basis of race, religion, sex, age, national
origin, disabilities, or sexual preference; and provides
assurances that it will comply with all Federal and local
provisions regarding political and lobbying activity.
o The grantee is a private, non-profit organization located
in or serving Santa Monica.
o The grantee has formal approval of its Board of Directors
to submit a proposal for city support.
Selection criteria
Each eligible project will then be assessed according to the
extent the organization can:
o document progress towards meeting FYl987-88 contracted
levels of service to Santa Monica residents;
o incorporate program design improvements that result in
improved outreach, case-finding, and services that
encourage independent living and self sufficiency;
o provide a minimum of 20% of the total budget for the Santa
Monica program from non-City sources, thus lending to the
financial stability and the ability to sustain itself as
part of the community services network;
o provide a cost-effective budget that is consistent with the
amount of service provided to Santa Monica residents.
Further, for those agencies currently receiving funds under
one-year or contingency contracts, each project will also be
assessed according to the extent that it can:
o clearly identify its Santa Monica target population and
document the continued need for services;
o provide access to services for
including appropriate geographic
operation, physical accessibility,
cultural sensitivity;
o effectively serve minority, low-income and disabled
residents and other groups most in need of services;
Santa Monica residents
location and hours of
bi-lingual capacity and
o demonstrate community support through its ability to
procure community resources (e.g., fundraising, use of
volunteers, donated services);
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. .
. '
o if on a contingency contract, the degree of success in
meeting the specific program performance standards
contained in the 1987-88 contract with the city.
proposals for one-time expenses or projects will be assessed
on the extent that:
o the proposed expenditures are, in fact, non-recurring;
o documentation can be provided to substantiate the amount of
the proposed expenditures;
o the organization has fully explored alternative means of
funding;
o the proposed expenditures will have a defineable impact
upon improving the management/administrative capability
and/or service delivery of the agency, or encourage
collaborative efforts among agencies.
Funding Timeline
Based on Federal and local requirements for the program and
consistent with the City1s FY1988-89 budget process, the
following timeline will be used to implement the funding process:
Community Needs Forum - "It's Time to Plan"
12-5-87
Discussions regarding Funding Rationale with
city commissions
12-87
CDBG Performance Hearing by City Council
1-12-88
Council Approval of CD Program Funding Rationale
1-12-88
"Requests for Proposals" Available to Public
1-15-88
workshop on Proposal Preparation
1-27-88
Deadline for Submittal of Proposals
2-29-88
Transmittal of Proposal Summaries to Commissions
3-4-88
Community Development Plan Draft Available to
Council, Commissions and Public
4-21-88
Administrative Hearing on community Development
Plan Draft
5-5-88
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Transmittal of Proposal Community Development
Plan to Council
5-9-88
Budget Hearings and Council Approval of Community
Development Plan and CDBG statement of objectives
5-24-88
BUDGETARY/FINANCIAL IMPACT
Recommendations included in this report will have no budgetary or
financial
impact
on
the
current
year's
budget.
All
recommendations
for
specific
funding
appropriations
and
allocations will occur in the context of the Fiscal Year 1988-89
budget process.
RECOMHENDATIONS
City staff recommends that the City Council:
(1) hold the
scheduled public hearing to hear public comment on the 1986-87
community Development Block Grant Program~
(2) approve the
funding rationale as specified in the staff report~
and ( 3 )
authorize the City Manager to implement the grant funding process
within the time1ines specified.
Prepared by: Barbara stinchfield, Community Development Manager
Department of Community and Economic Development
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. .
- ~ .,. " ,~n I
! ~~: _ City ~f Santa Monica - ~ ~~ ~l
~ ):;- NOTICE OF PUBLIC HEARING ,; .~. ~1..1
! - ~~~. 1986.87 COMMUNITY DEVELOPMENT '~f~ 'j
BLOCK GRANT
PERFORMANCE ASSESSMENT ~- '1 f -
The CIty Couneil of the City of Santa M_iea will hold. puhlie hearill8 to
l'eYIew pl'OJnlm PI"Ofll'"I _d NIIeM perforPUUlee of the City'l CoDllllun,ty:
DeYelopment Block Gn.t (CDBC) PJ'OII'UD. The City Counell iDvil'" re- :
adeD18 to comment on the perf_ce of the 1986-87 PJ'OII'8Q1 winch
ended on June 30th. I
THE PUBLIC HEARING illeheduled for TUESDAY, JANUARY 12,1988
at '2'130 p.m.
i
It wall be held an the Caty Hall Council Chaoaber at 1685 Main Street., Sao-
ta Monica, California.
I
The purpose of the hearill8 11 to pl'OVlde citizenl an Opportunity 10 eom- i
menl on the recent accompli.hmen.. of the CoQlmunity Development pro-!
gram and U&illt the elly Couned lD deeidinl how 10 'pend CDBG fuadl in,
the fUlure.
,
,
I
The annual Grantee Perfonnanee Report (CPR), wbieh revie_ the'
pr-ogrelll of aU CDBG proice.. and progrlllU during 1986-81, hu heeD
prepared by .he Depllrlmea. 01 Communi.y 81Jd Eeonomic Development.
TO. ohwn a 'ree copy o' tbe CPR or obtai. more in'ormation reprdtq.
the public hearing, pleate conrad the Dept. of CGmlDunity and Ecollomic.
De..elopment, City Hall, 1685 Main Street, Room 206, telephone 458- i
8701. i
The meetUll 'acihty il wheelcbair aee_ihle. If you have -y .pec...l da.- I
.bdaty-relat~ needa luch al I~ laft81l8le interpreting, pleale contact the
City'l Offic.. 'or the Dillabled at 458-8701. '
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