SR 06-25-2019 3E
City Council
Report
City Council Meeting: June 25, 2019
Agenda Item: 3.E
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To: Mayor and City Council
From: David Martin, Director, Building & Safety
Subject: Adopt Grant Resolution - Hazard Mitigation Grant Program
Recommended Action
Staff recommends that the City Council adopt the attached resolution authorizing:
1. The submittal of a Hazard Mitigation Grant Program (HMGP) sub-application to
CalOES/FEMA requesting grant money to fund a program that will assist
property owners with the retrofit of seismically vulnerable soft -story buildings.
2. The City Manager, or designee, to execute all necessary documents associated
with this HMGP, or subsequent HMGP applications, to apply for the grant, accept
the grant, if awarded, and accept all grant renewals, if awarded.
Summary
The City of Santa Monica in 2017 implemented one of California’s most comprehensive
efforts to mandate seismic safety strengthening of vulnerable buildings. The Planning
and Community Development Department seeks to submit a Hazard Mitigation Grant
Program (HMGP) application requesting up to $6.75 million from the Federal
Emergency Management Agency (FEMA). Securing a FEMA grant would encourage
property owners’ timely compliance with the City’s seismic retrofit program and increase
the number and pace of completed retrofits in the City. Council authorization to subm it
the application is required as part of the submittal.
The application submittal deadline is July 5, 2019. The final amount of an awarded grant
could be less depending on the number of applications received by FEMA. An awarded
grant authorizes the funds for a period of three years. If awarded, the grant money will
be used to assist (i.e. reimburse) property owners with a percentage of the costs to
retrofit seismically vulnerable soft-story buildings. A portion of any awarded money
would also be used towards administrative and operating costs of managing the retrofit
program. Options for managing the program are still under consideration and may
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include hiring a consultant or reallocating existing resources for the duration of the
grant period and any subsequently awarded grant periods.
Discussion
The State of California Office of Emergency Services (CalOES) is eligible for FEMA
Hazard Mitigation Grant Program (HMGP) funding as a result of the declaration of a
federal disaster for the 2018 wildfires in Butte, Ventura, and Los Angeles counties. The
HMGP is aimed at providing funding for projects that reduce or eliminate the impacts of
future disasters, including the mitigation of earthquake hazards. Funding from HM GP
grants does not need to be used to mitigate the specific disaster that initiated the
emergency declaration.
The City implemented its Seismic Retrofit Program (‘Program’) in March 2017, where
nearly 2,000 commercial and multi-family residential buildings were identified as
potentially seismically vulnerable in need of structural retrofit. The Program mandates
compliance timeframes, depending on building type, in which a property owner must
complete a structural retrofit. The requested FEMA grant, if awarded, would provide
reimbursable funds to property owners for design, engineering, and construction costs
associated with retrofitting their properties in compliance with the Program. Funding
assistance would incentivize property owners and increase the number and pace of
completed building retrofits, which is the goal of the Program. Lastly, awarded grant
money would also provide the City with funds to assist with administrative, monitoring,
and operating costs to improve the success of the Program.
The City has contracted with m6 Consulting for services associated with the HMGP,
including preparation of the subapplication, the required benefit -cost analysis, and
assistance with the development of the grant program. m6 has provided similar services
to the cities of West Hollywood, Beverly Hills, and Oxnard in completing FEMA HMGP
application submittals. Costs associated with m6’s consulting services are considered
reimbursable costs by FEMA should the grant be awarded.
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City’s Financial Commitment
Pursuant to the FEMA grant requirements, the City must commit to a 25% match in
funding. The requested$6.75 million grant would require a City match of $2.25 million
for an overall project budget of $9 million. Property owners participating in the grant
program would fund a significant portion of the City match. FEMA considers the money
spent by property owners on the balance of a retrofit project after grant subsidization to
qualify towards the City’s local match commitment. A portion of the required local match
would also be met through already budgeted expenses incurred by the City in
administering the grant program, including staff/consultant time dedicated to program
management, plan review, permit-related services, and inspections.
The local grant program will be developed in a manner where staff time spent on the
program, including plan review and permitting costs, will be tracked closely; and, the
reimbursement amounts to property owners will be established at a level that ensures
the 25% local match is appropriately met entirely through these a ctivities. A letter from
the City Manager’s office committing to meet the local match requirements of at least
25% is required to be submitted with the application and is included as Attachment A to
this report.
Subapplication Review Process
CalOES acts as the applicant to FEMA in the grant process for the HMGP. The City
serves as the subapplicant. The deadline for the City to submit the subapplication to
CalOES is July 5, 2019. The deadline for CalOES to submit the application to FEMA is
November 12, 2019. Subapplications are reviewed by CalOES to ensure minimum
criteria are met and the most cost-effective projects are selected for funding. CalOES’
review criteria include the adoption of a Local Hazard Mitigation Plan, a satisfactory
cost-benefit ratio, details of how a project independently achieves hazard mitigation,
and demonstrating the ability to complete the project within the grant’s 36 -month
performance period.
Following the submittal of the subapplication to CalOES, a series of requests for
Information (RFI) to the City may occur to clarify or supplement information in the effort
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towards preparing the most desirable program application to forward to FEMA. Once
CalOES completes its review the subapplication is forwarded to FEMA to verify for
compliance with federal laws and regulations. A key element of FEMA’s review is a
‘benefit-cost analysis’ that is used to determine the cost-effectiveness of the project.
The FEMA review process can typically take between 4-6 months. Therefore, the City
expects grants to be awarded in spring 2020 (is this right?)
Proposed Retrofit Grant Program
The Retrofit Grant Program proposed is a rebate program that will assist property
owners of soft-story buildings identified as Priority 2 (more than two stories and less
than 16 units) and Priority 3 (16 or more units) building types in the City’s Seismic
Retrofit Program. Priority 2 and Priority 3 building types were selected for this grant
program because of the compliance dates for when these retrofits must be complete d,
and due to the characteristics of these building types and their ability to achieve the
required benefit-cost ratio required by FEMA for grant eligibility.
Interested property owners of Priority 2 and Priority 3 buildings would submit an
application to the City expressing an interest in participating in the rebate program.
Upon City confirmation of a project’s eligibility, applications will be forwarded to FEMA
for review and funding approval. An environmental and historic preservation regulatory
compliance review by FEMA will occur as part of its project approval process. FEMA
approval is required prior to permit issuance and commencing construction. Pursuant to
FEMA funding guidelines, grant money may only be used for projects that have not
started construction at the time of FEMA’s approval of the project. Retrofit projects that
have already begun construction or have been completed are ineligible for FEMA
reimbursement.
Reimbursement to property owners of FEMA-approved applications is broken up into
two phases. The first is for reimbursement of a percentage of the costs associated with
retrofit design, such as hiring an engineer and developing construction drawings and
structural calculations. The second is for reimbursement of construction costs suc h as
hiring a contractor, construction materials, and third party inspections. FEMA requires
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that projects are completed within 36 months of FEMA approval prior to issuance of
reimbursement. The compliance dates established in the City’s seismic ordinance for
Priority 2 and Priority 3 building types requires retrofit work to be completed by
September 2023, and October 2023, respectively, which align closely with FEMA’s 36 -
month requirement and an expected award date of early 2020 for this grant application.
The exact amount of each rebate will be determined through a City screening process
and will be based on the number of applications submitted to the City from interested
property owners. It is anticipated that design rebates may be up to $5,000 or 75% o f
design cost, whichever is less; and construction rebates may be up to $17,000 or 40%
of construction costs, whichever is less.
Grant money received for the Retrofit Grant Program would also be used to fund the
City’s administrative and operating costs of managing the grant program. The logistics
of how the program will be managed are still under consideration and may include the
hiring of a consultant or the reallocation of existing resources for the duration of the
three-year grant period, and any subsequently awarded grant periods. A primary
responsibility of this role would be to ensure the program maintains compliance with
FEMA requirements.
Other Funding Sources
Later this year another HMGP application period will open for funding associated with a
different federal disaster declaration. The Building & Safety Division will continue to
monitor CalOES’ website to submit another NOI to request additional funding for the
retrofit of other building types in the City. Additional analysis will be required to
determine whether other building types subject to the City’s seismic retrofit program,
such as Priority 5 (soft-stories, 7 to 15 units) and Priority 6 (soft-stories, less than 7
units) can achieve the benefit-cost ratio required by FEMA for grant funding eligibility.
According to CalOES staff and discussions with the City’s grant-writing consultant, it
has proven difficult to obtain the required ratio for soft -story buildings of 15 units or less.
Nevertheless, staff will continue to explore this opportunity to assist property owners
where possible.
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Financial Impacts and Budget Actions
Staff seeks authority to apply for a Hazard Mitigation Grant from FEMA to assist
property owners with the costs to retrofit seismically vulnerable buildings. If awarded,
staff will return to Council for specific budget actions.
Prepared By: Ariel Socarras, Building and Safety Manager
Approved
Forwarded to Council
Attachments:
A. Attachment A - Local Match Fund Commitment Letter
B. Resolution
C. Written Comments
City Manager’s Office
1685 Main Street, Room 209
Santa Monica, CA 90401
July 1, 2019
California Governor’s Office of Emergency Services
Hazard Mitigation Grants Program Unit
3650 Schriever Ave
Mather, CA 95655
RE: LOCAL MATCH FUND COMMITMENT LETTER
DR-4407 Subapplication Funding Match Commitment Letter
Dear State Hazard Mitigation Officer:
As part of the Hazard Mitigation Grant Program process, a local funding match of at least 25% is required. This
letter serves as the City of Santa Monica’s commitment to meet the local match fund requirements for the
Hazard Mitigation Grant Program.
SOURCE OF NON-FEDERAL FUNDS: LOCAL
AGENCY
FUNDING
OTHER
AGENCY
FUNDING
PRIVATE
NON-PROFIT
FUNDING
STATE
AGENCY
FUNDING
NAME OF FUNDING SOURCE: City of Santa Monica General Fund
FUNDS AVAILABILITY DATE: July 15, 2019
PROVIDE EXACT MONTH/DATE/YEAR OF AVAILABILITY OF FUNDS
FEDERAL SHARE AMOUNT REQUESTED: $6,750,000
MUST MATCH $ AMOUNT PROVIDED IN SUBAPPLICATION
LOCAL SHARE AMOUNT MATCH: $2,250,000
MUST EQUAL A MINIMUM OF THE 25% FEDERAL SHARE REQUESTED
FUNDING TYPE: Administration, Consulting Fees, Permitting
EXAMPLES: ADMINISTRATION, CASH, CONSULTING FEES, ENGINEERING FEES,
FORCE ACCOUNT LABOR, AGENCY PERSONNEL, PROGRAM INCOME, ETC.
If additional federal funds are requested, an additional local match fund commitment letter will be required.
Please contact Robert Woodward, Project Consultant at (805) 379-1015 with questions.
Sincerely,
Rick Cole
City Manager
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City Council Meeting June 25, 2019 Santa Monica, California
RESOLUTION NUMBER _________ (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF SANTA MONICA AUTHORIZING THE CITY MANAGER TO SUBMIT
A LETTER OF COMMITMENT OF MATCHING FUNDS AND ALL OTHER
NECESSARY DOCUMENTS FOR A HAZARD MITIGATION GRANT APPLICATION
FOR THE RETROFIT GRANTS PROGRAM TO THE FEDERAL EMERGENCY
MANAGEMENT AGENCY (FEMA) AND SUBJECT TO ITS AWARD TO ACCEPT THE
GRANT AND ALL GRANT RENEWALS AND EXECUTE ALL DOCUMENTS
NECESSARY TO ACCEPTANCE
WHEREAS, as a result of the declaration of major federal disaster DR-4407 due
to 2018 wildfires in Northern and Southern California, the State of California is eligible for
Hazard Mitigation Grant Program (HMGP) funding aimed at reducing the risk of loss of
life and property from future disasters; and
WHEREAS, federal funding is provided under the Robert T. Stafford Emergency
Assistance and Disaster Relief Act (Stafford Act) through FEMA and the California
Governor’s Office of Emergency Services (Cal OES); Cal OES is responsible for
identifying program priorities, reviewing applications and forwarding recommendations for
funding to FEMA; FEMA has final approval for activity eligibility and funding; and
WHEREAS, the federal regulations governing HMGP Projects are found in Title 44
of the Code of Federal Regulations (44 CFR) Part 206, and the Uniform Administrative
Requirements for Federal Awards are found in 2 CFR Part 200; and
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WHEREAS, a letter committing at least 25% matching funds is required as part of
the grant application; the matching funds must be from a non-federal source and must be
in place at the time of application submittal; and
WHEREAS, the match would consist of an amount not to exceed $2.25 million
over the three-year grant period; a significant portion of this match would be provided by
eligible property owners who participate in the grant program in the form of owner -paid
design and construction costs; a portion of the required match would also be provided by
costs incurred by the City in administering the grant program, including time dedicated to
program management, plan review, permit-related services, and inspections; and
WHEREAS, the $6.75 million grant will be used to provide rebates for retrofit
design and construction costs to owners of soft-story buildings identified as Priority 2
(more than two stories and less than 16 units) and Priority 3 (16 or more units) building
types in the City’s Seismic Retrofit Program; a portion of the grant will also be used to
fund the City’s administrative and operating costs of managing the grant program
(separate from the administrative and operating costs counted towards the City’s match).
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Manager, or his or her designee, is authorized to submit a
Hazard Mitigation Grant application to FEMA in the amount of $6.75 million for the Retrofit
Grant Program, along with a letter of commitment to provide up to $2.25 million in local
matching funds and all other necessary documents, and subject to its award, to accept
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the grant and all grant renewals and negotiate, enter into, and execute all documents
necessary to evidence, secure, and implement the award.
SECTION 2. The City Manager, or his or her designee, is authorized to provide to
the California Governor’s Office of Emergency Services such assurances and
agreements as are required in connection with the Hazard Mitigation Grant application
and, if awarded, its acceptance.
SECTION 3. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
_________________________
LANE DILG
City Attorney
Danielle Leidner-Peretz
Director, Government Affairs &
External Relations
danielle@aagla.org
213.384.4131; Ext. 309
June 21, 2019
Via Electronic Mail
Hon. Mayor Gleam Davis and Members of Santa Monica City Council
1685 Main Street, Room 209
Santa Monica, California 90401
Re: Hazard Mitigation Grant Program (Agenda Item 3E)
Dear Hon. Mayor Davis and Members of the Santa Monica City Council:
The purpose of this letter is to express the Apartment Association of Greater Los Angeles’
(AAGLA) support of the Council’s consideration of providing financial relief to property owners that
incur the substantial cost of compliance with the City’s mandatory Seismic Retrofit Program. While
we are supportive of Council’s advancement of a grant resolution to obtain up to $6.75 million in
grant program funding through the Federal Emergency Management Agency (FEMA) Hazard
Mitigation Grant Program, we suggest that far more be done to alleviate the enormous cost burden
of seismic retrofitting to be borne solely by the City’s rental property owners.
AAGLA represents thousands of small rental housing providers. Many of our members are
retired seniors that worked regular 9-5 jobs for decades, scrimping and saving to afford their small
investment in rental property that secures and supplements their retirement and at the same time
provides affordable housing to their neighbors. Some of our members are multi-generational
immigrants that chose to make a small community investment as their way to house themselves
and others. Our members are regular people that are providing affordable rental housing to their
communities and are your constituents. They are the types of owners that the City desires all rental
property owners to be, responsible, caring and reasonable.
It is indisputable that ensuring that buildings are structurally sound to withstand the impact of
an earthquake and mitigate the loss of life resulting from a natural disaster is critically important.
The Seismic Retrofit Program addresses a vital societal need, but the associated costs are currently
entirely imposed upon the City’s rental property owners. Costs of seismic retrofitting per building
can range from $50,000 to $150,000 or more depending upon type of construction and number of
parking spaces.
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We applaud the City’s efforts to provide property owners with FEMA grants. However, as
indicated in the City Council report submitted by the Buildings and Safety Director, only soft-story
buildings identified as priority 2 (more than two stories and less than 16 units) and priority 3 (16 or
more units) building types in the City’s Seismic Retrofit program would be eligible for the proposed
rebate program. The report noted that additional analysis must be conducted to determine if smaller
priority 5 (soft-story, 7-15 units) and priority 6 (soft-stories, less than 7 units) can meet FEMA grant
funding eligibility. Additionally, the report indicated that there may be opportunities for funding
through a different federal disaster declaration and the opportunity to request additional funding for
other building types subject to the City’s seismic retrofit program.
We appreciate the Council’s efforts in applying for a FEMA grant and establishing a rebate
program that would potentially provide eligible property owners with design rebates of up to $5,000
or 75% of the design cost, whichever is less, and construction rebates of up to $17,000 or 40% of
construction costs, whichever is less. Small property owners, those with priority 5 or 6 properties,
however, would not be eligible for the program and will be financially burdened by the costs
associated with the City’s seismic retrofit program. We ask that the Council continue to explore
multiple avenues to provide property owners with financial assistance and relief in achieving
compliance with the seismic retrofit program, including other grant programs or loans.
AAGLA also urges Council to revisit allowing property owners to pass-though and share a
portion of these seismic retrofitting costs with renters, which is permissible in surrounding cities such
as Los Angeles and Pasadena. We also encourage the City to finance or find ways to finance low
cost loans for property owners that do not have the resources to pay for seismic retrofitting of their
buildings.
Thank you for your consideration of our suggestions and recommendations for ways to
provide property owners with much needed financial relief in meeting the requirements of the City’s
mandatory Seismic Retrofit Program. If you have any questions, please call me at (213) 384-4131,
Ext. 309 or electronic mail at danielle@aagla.org.
Very truly yours,
Danielle Leidner-Peretz
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REFERENCE:
Resolution No. 11179
(CCS)