SR-101408-13E13-E
October 14, 2008
Council Meeting: October 14, 2008 Santa Monica, California
CITY CLERK'S OFFICE -MEMORANDUM
To: City Council
From: Mayor Pro Tempore Bloom
Date: October 14, 2008
13-E: Request of Mayor Pro Tem Bloom that the City Council urge the State
Legislature and Governor Arnold Schwarzenegger to restore full funding
for the Emergency Housing and Assistance Program (EHAP) to the 2009-
2010 state budget. Without this funding, which was vetoed by Governor
Schwarzenegger, armories in Culver City and West Los Angeles (and
elsewhere in the region and throughout California) may not be able to
operate, thus creating a health crisis among the homeless population. The
Council is also requested to communicate and request similar resolutions
from each of the 88 cities of Los Angeles County and each of its Councils
of Government, particularly the Westside Cities Council of Governments.
13-E
October 14, 2008
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SHAW~YODER,rn~.
LE61SLAiIVE AOVOC ACY
ASSOCIATION MANAGEMENT
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OCT 14 2008
To: P. Lamont Ewell, City Manager
Kate Vernez, Assistant to the City Manager for Community and Government Relations
City of Santa Monica
From: Andrew Antwih, Tressa Wallace
Shaw 1 Yoder, Inc.
Re: State Funding in the 2008.09 State Budget Act for Homeless Assistance
Date: October 9, 2008
There are two primary types of funding programs in the state budget that provide assistance to the
homeless: capital development funding for temporary and supportive housing and operations funding for
services: This memo will discuss the Governor's recent action to eliminate funding for the Emergency
Housing Assistance Program (EHAP), one critical source of flexible funding used by local agencies to fund
the operating costs associated with providing shelter and other assistance for the homeless. We will also
identify other sources of state funding (and federal funds that are distributed by state agencies) that may be
used for homeless assistance.
EHAP
The Emergency Housing Assistance Program (EHAP) receives funding from multiple sources and is placed
into two accounts for grant distribution. The EHAP is administered by staff at the state Department of
Housing and Community Development (HCD) for a program that allocates grant funds to assist in providing
direct client housing, including facility operations and administration, residential rent assistance, leasing or
renting rooms for provision of temporary shelter, capital development activities of up to $30,000 per site,
and administration of the award (limited to 5 percent). This account is usually fully funded by the state's
General Fund, proposed this year in the Legislature's Budget at $4 million, and was subject to the
Governor's line-item veto.
Governor's Line Item Veto
The Governor used his line item veto authority to eliminate all state support for the EHAP, The Governor
had originally proposed in May of 2008 to reduce EHAP funding by 10% ($401,000). This would have left
$3.599 million.
We have not been able to ascertain the Governor's motive for making this cut other than what's in his veto
message. All of the legislative budget staff we have spoken to were very surprised that the full amount of
funding for this program was vetoed. EHAP has been fully funded at the $4 million level for 15 years, and
this is apparently the first year it has received any cuts.
In speaking with staff at HCD, we learned they may look for ways within their existing budget to provide the
grant money removed from this program. We will continue to monitor this and report any resolutions made
by the department.
Tel: 916.446.4656
Fax: 916.446.4318
1415 L Street, Suite 200
Sacramento, CA 95814
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Legislative Background on EHAP Cuts
When this item was heard in the Assembly Budget Subcommittee #4 on May 21, 2008, legislative staff
reported that the Emergency Housing Assistance Program (EHAP) currently helps to fund local homeless
shelters, providing a portion of the funding for about 19,000 shelter spaces each year. This 10 percent cut
will, in essence, eliminate the state's portion of"funding for 10 percent of those spaces.
Assembly Budget Committee staff further commented that "the State currently provides about 10 percent of
the overall funding for local homeless shelters. This cut could have a detrimental impact on HCD's ability to
support homeless shelters. During tough economic times, these facilities often see an increase in usage,
making this a bad time for such reductions."
Both the Assembly and the Senate Budget Subcommittees #4 voted to restore full funding to the EHAP
program. As a result, the Budget Act that was submitted by the Legislature to the Governor's desk that
would have fully funded the program at $4 million: Here is the Governor's veto message (emphasis
added):
Item 2240-105-0001-For transfer, as an expenditure, upon order of the Director
of Finance, to the Emergency Housing and Assistance Fund. 1 delete this item. I
am reducing this item by $401,000 fo reinstate the budget-balancing reduction to
the state grant program for local emergency shelters that 1 proposed. I am further
reducinp this item by $3,599,000.
While the budget bill provides for a modest reserve in 2008-09, it fails to make the
necessary statutory spending reductions and revenue increases needed to
eliminate the state's structural budget deficit going forward. At the same time,
constitutional requirements, federal law and court required payments drive the
majority of the spending in any budget, and limit my ability to reduce spending. As
a result, 1 have an obligation to reduce spending when my veto power is adequate
to do so. Consequently -- and in order to further ensure that this budget remains in
balance -- I am taking the difficult but necessary action reflected in this veto to
further control state spending.
EHAP Capital Development
The EHAPCD (for Capital Development) provides grant funds for capital development activities for
emergency shelters, transitional housing, and safe havens that provide shelter and supportive services for
homeless individuals and families. This account is normally funded by annual appropriations in the budget
act from state housing bond sources: Proposition 46 (Housing and Emergency Shelter Trust Fund Act of
2002) and / or Proposition 1 C (Housing and Emergency Shelter Trust Fund Act of 2006).
The recently enacted 2008-09 State Budget contained an appropriation of $200 million in Proposition 46
bond funds for a variety of housing related programs. However, there was no specific "sub-allocation" to
the EHAPCD. Proposition 1 C requires no annual appropriations through the budget; rather, the HCD can
access funds on a "continuing" basis. At this point, the final allocation of all available Prop 1 C and Prop 46
funds has not been determined by HCD. However, the Department of Finance advises us that they
anticipate $24 million of Prop 1 C money will be dedicated to EHAPCD.
Previous EHAPCD Notices of Funding Availability (NOFA's) have generally been for $31 million annually of
Prop 1C and Prop 46 funds and HCD apparently has no current plans to change that amount. We presume
HCD will draw the remaining NOFA balance of approximately $7 million from Prop 46 funds. Applications
are generally accepted until the end of January. The next NOFA will be sent to the Director of HCD by
October 10, 2008, and should be posted on the website by the end of the October. We will continue to
monitor this to determine funding availability.
The HCD staff anticipates that this will be the final year with Prop 46 funding the EHAPCD and possibly
only two additional rounds in the future, containing Prop 1 C funds (2009-10 and 2010-11, depending on
potential unencumbered funds available for reallocation). After that there will be no more EHAP Capital
Development funds unless another bond is passed.
The following are additional programs that provide resources for homeless assistance..
Multifamily Housing Program -Facilities for Homeless Youth
The state Department of Housing and Community Development (HCD) also administers grants under the
Multifamily Housing Program (MHP) for Homeless Youth. These funds flow to HCD from Proposition 46
and Proposition 1C and are used for construction of new facilities, rehabilitation of existing facilities, or the
acquisition and rehabilitation of permanent rental housing, and the conversion of nonresidential structures
to rental housing. Eligible Projects must have commitments of Mental Health Services Act (Proposition 63)
funds for supportive services, and typically require rent subsidies as well. HCD staff reports that there is
currently $20 million available for statewide grants.
Federal Emergency Shelter Grant Program
We also learned from staff at the Los Angeles County Emergency Food and Shelter Program that there is a
federal program called the Federal Emergency Shelter Fund which provides Los Angeles County with
approximately $5.5 million that can be used for operational needs, and may bean additional resource to
receive grants previously provided by EHAP.
The Federal Emergency Shelter Grant offers grants that are eligible for the following expenses:
1. Operations (OPS)
2. Essential Services (ES)
3. Homeless Prevention Activities (HP)
4. Renovation/Rehabilitation/Conversion (RR)
5. Supervisory Shelter Administration (SSA)
6. Grant Administration (GA)
OPERATIONS (OPS): FESG funds can cover a broad array of emergency shelter and
transitional housing costs.
Eligible Expenses:
a. Staff shelter Maintenance/Repairs (Staff salaries including benefits; maintenance
supplies, repairs and maintenance service conducted by outside service providers;
and ground maintenance service).
b. Personnel performing basic crowd control and activities insuring facility operations are
running safely, such as: security personnel, intake/greeters staff. "Facility Monitors"
(Staff salaries and benefits).
c. Security services and equipment.
d. Shelter rent or lease payments (Facility mortgage payments are not eligible).
e. Fuel, oil, and wood for heating or cooking.
f. Shelter facility insurance (property/liability).
g. Utilities.
h. Food for meals provided on site to shelter residents.
i. Shelter furnishings, (beds, tables etc,).
j. Shelter Vouchers (evidence of site control required).
Proposition 63
The Budget includes $1.49 billion in Mental Health Services Act (MHSA) funds for Proposition 63, of which
$100 million is committed by counties to the MHSA Housing Program. This funding is in addition to $300
million identified by counties in 2007-08. This program makes funding available through the California
Housing Finance Agency (CaIHFA) to develop permanent supportive housing serving persons with serious
mental illness who are homeless or at risk of homelessness.
CalWorks Homeless Assistance Program
The CaIWORKS Homeless Assistance Program did not receive any "cuts" however the funding is slightly
less due to a smaller caseload. It is funded at approximately $17,000,000.
California. Department of Education
The California Department of Education receives federal funding under the McKinney Vento Homeless
Children Education Program. These funds are available to school districts throughout the state on a
competitive grant basis. The 2008-09 State Budget identifies roughly $8.5 million for this program.
The purpose of the program is to (1) facilitate the enrollment, attendance, and success in school of
homeless children and youth; and (2) ensure homeless children and youth have equal access to the same
free, appropriate, public education as provided to all other students. Services provided cannot replace the
regular academic program and must be designed to expand upon or improve services that are part of the
school's regular academic program.