TO: ADAM PIRRIE, CITY MANAGER
FROM: BRAD JOHNSON, COMMUNITY DEVELOPMENT DIRECTOR
DATE: MARCH 25, 2025
Reviewed by:
City Manager: AP
SUBJECT:
Title
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM - BUDGET AMENDMENT FOR 2024-25 (FUNDING SOURCE: COMMUNITY DEVELOPMENT BLOCK GRANT FUND)
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SUMMARY
The Community Development Block Grant (CDBG) Program is a federal program that provides funding to cities and counties to carry out programs and projects designed to benefit low- and moderate-income people. The City has an unallocated CDBG balance of $115,785 from rollover funds from previous years and program income from Housing Rehabilitation loan payoffs.
Due to the uncertainty of future CDBG funding, the Los Angeles County Development Authority (LACDA) has requested that the City fully allocate its unallocated balance to current 2024-25 CDBG programs. This will allow the City to preserve the funds; without doing so, the federal government could recapture the unallocated balance. The City may extend the 2024-25 contract to utilize these funds in 2025-26.
Staff recommends a budget increase of $65,785 for the Housing Rehabilitation and Energy Efficiency Grant Program from $149,740 to $215,525 and an increase of $50,000 for the Job Creation and Business Incentive Program from $50,000 to $100,000.
RECOMMENDATION
Recommended Action
Staff recommends the City Council appropriate $65,785 in the unallocated Community Development Block Grant program balance to the Housing Rehabilitation and Energy Efficiency Grant Program and $50,000 to the Job Creation and Business Incentive Program, and authorize staff to allocate any new funds proportionally as necessary.
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ALTERNATIVES TO RECOMMENDATION
In addition to the staff recommendation, there are the following alternatives:
A. Approve the 2024-25 CDBG budget with changes.
B. Request additional information.
FINANCIAL REVIEW
The proposed budget amendment will increase the 2024-25 CDBG fund allocation from $217,343 to $333,128 using unallocated CDBG funds.
The staff cost to prepare this report is estimated at $500 and is included in the operating budget of the Community Development Department. Staff cost to administer the CDBG Housing Rehabilitation Program is reimbursed by LACDA from the program funds.
ANALYSIS
The CDBG Program is a Federal Block Grant Program that began in 1974, which provides funding to cities and counties to carry out programs and projects designed to benefit low-income persons. As a member of an Urban County Agreement, Claremont receives its CDBG funding from LACDA. LACDA performs many of the administrative tasks required to comply with the Federal regulations of the CDBG program.
Proposed 2024-25 CDBG Budget Amendment
Due to the uncertainty of future federal funding, LACDA has requested that its Urban County Agreement members fully allocate their unallocated CDBG balance to the current fiscal year programs. By allocating the funds, the City can preserve the funds if the federal government attempts to recapture any unused CDBG money. LACDA has informed the City that if it does not expend the funds by the end of 2024-25, LACDA can extend this fiscal year’s programs for an additional year. The City could then utilize 2024-25 and 2025-26 funds next fiscal year, assuming the City still receives the 2025-26 funds.
Staff has continued to experience an increased interest in the City’s Housing Rehabilitation and Energy Efficiency Grant Program, which assists low- and moderate-income households to pay for much-needed maintenance, repairs, or energy efficiency improvements. Therefore, staff recommends an increase of $65,785 for the Housing Rehabilitation and Energy Efficiency Grant Program from the unallocated CDBG balance.
On September 24, 2024, the City Council approved a $50,000 forgivable loan for the business Uno Tre Otto, so no additional funds remain for that program. Staff requests an increase of $50,000 for the Job Creation and Business Incentive Program to allow the City to issue additional forgivable loans to eligible businesses.
The third CDBG-funded program is the Senior Case Management Program. The federal government limits public service programs to fifteen percent of the fiscal year’s allocation, so the budget cannot be increased for this program.
Due to the funding's unpredictability, staff also requests the authority to allocate any future funds that may come from housing rehabilitation loans proportionally to the Housing Rehabilitation Loan and Energy Efficiency Grant Program and the Job Creation and Business Incentive Program.
The unallocated CDBG balance includes the rollover funds from previous years and program income from Housing Rehabilitation loan payoffs. The approved 2024-25 CDBG budget, as well as the amended budget resulting from the allocation of $115,785 in unallocated CDBG balance is detailed in the table below.
|
Project/Program |
Approved Budget |
Proposed Amended Budget |
|
Housing Rehabilitation Program |
$ 149,740 |
$ 215,525 |
|
Senior Case Management Program |
$ 17,603 |
$ 17,603 |
|
Job Creation & Business Incentive Program |
$ 50,000 |
$ 100,000 |
|
Total Allocated |
$ 217,343 |
$ 333,128 |
|
Unallocated CDBG Balance |
$ 115,785 |
$ 0 |
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following: City Priorities, Sustainability Plan, Economic Sustainability Plan, General Plan, and the 2024-26 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by: Prepared by:
Brad Johnson Alex Cousins
Community Development Director Senior Management Analyst