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SR-407-000-03 (4) CCS:HS:JR:SL:F:\HSD\SHARE\CDBG HUD\Staff Reports\FY 2001-02 Con Plan Amendment.doc Council Meeting: March 26, 2002 Santa Monica, California TO: Mayor and City Council FROM: City Staff SUBJECT: Public Hearing and Approval of an Amendment to the Consolidated Plan (FY 2000-05) as Required by the U.S. Department of Housing and Urban Development (HUD) INTRODUCTION This report recommends the City Council hold a public hearing to approve an amendment to the Consolidated Plan (Attachment I) as required by the U.S. Department of Housing and Urban Development (HUD). BACKGROUND The City’s Consolidated Plan (FY 2000-05) was adopted by City Council and submitted to HUD in June 2000 and specifies the City’s overall housing and community development needs. The City’s One-Year Action Plan, which is a component of the Consolidated Plan, is submitted annually to HUD and delineates the City’s specific projects and activities for one-year use of CDBG and HOME funds in order to meet these needs. According to Federal regulations, the City “shall amend its approved plan whenever it makes one of the following decisions: 1) to make a change in its allocation priorities or a change in the method of distribution of funds; 2) to carry out an activity, using funds from any program covered by the Consolidated Plan (including program income), not previously described in the action plan; or 3) to change the purpose, scope, location, or beneficiaries of an activity.” DISCUSSION An amendment to the City of Santa Monica’s Consolidated Plan is necessary in order to allocate CDBG program income, not previously described in the Action Plan, and make a change in its allocation priorities in order to expedite the expenditure of CDBG funds for affordable housing projects. CDBG program income of $2 million for FY 2001-02 was projected in the FY 2001-02 Action Plan. However, three properties assisted with CDBG earthquake funds were recently sold by the property owners, resulting in unanticipated additional program income of $1.4 million, which staff proposes to allocate to eligible costs associated with new construction and acquisition/rehabilitation of multi-family properties for low-income and very low-income persons. In addition, prior year CDBG funds ($220,000) had been allocated to the Pier Access Elevator project as indicated in the FY 1998-99 One-Year Action Plan. This proposed project was to make the pier accessible for people with disabilities. Since the building of an accessible elevator from the ground floor to the pier deck is one of the provisions in the current signed lease agreement with the new tenant, staff now proposes to reprogram the $220,000 to eligible costs associated with new construction and acquisition/rehabilitation of multi-family properties for low-income and very low-income persons. This is consistent with one of the housing priorities identified in the Consolidated Plan, which is to expand the supply of housing affordable to lower and moderate-income households, particularly for renters. In the Proposed FY 2002-03 Action Plan, which will be going to City Council on June 18, staff will propose the reallocation of unobligated CDBG funds, as well as approximately 40% of the FY 2002-03 CDBG entitlement, to the Virginia Avenue Park Expansion project, which is currently underfunded and scheduled for construction in FY 2002-03. BUDGET/FINANCIAL IMPACT Community Development Block Grant (CDBG) funds in the amount of $1,620,000 are proposed to support new construction and acquisition/rehabilitation of multi-family properties for low-income and very low-income persons. Funds are available in account C19005002.589000. RECOMMENDATION City staff recommends the City Council hold a public hearing and approve an amendment to the Consolidated Plan (Attachment I) as required by the U.S. Department of Housing and Urban Development (HUD). Prepared by: Barbara Stinchfield, Director Julie Rusk, Human Services Manager Susan Lai, Senior Administrative Analyst Community and Cultural Services Department Jeff Mathieu, Director Bob Moncrief, Housing and Redevelopment Manager Martin Kennerly, Administrative Services Officer Resource Management Department Attachment I - Amendment to the Consolidated Plan (NOT AVAILABLE VIA ELECTRONICALLY) Amendment to Consolidated Plan (FY 2000-05) Submitted to the U.S. Department of Housing and Urban Development HUMAN SERVICES DIVISION Community and Cultural Services Department HOUSING AND REDEVELOPMENT DIVISION Resource Management Department 1685 Main Street, Room 212, Santa Monica, California 90401 Telephone (310) 458-8701 FAX (310) 458-3380 TDD (310) 458-8696 Website: www.human-services.santa-monica.org February 2002 5 6