SUBJECT: Continued - Additional Information and Options Requested by Council in Order to Authorize Submission of a Formal Request to the U.S. Department of Housing and Urban Development (HUD) Asking for Voluntary Grant Reductions (VGRs) of Future CDBG and HOME Allocations in Lieu of Repayment from Local Funds; or Authorization to Make the Required Repayments to HUD from Local Funds; or Authorization for a Combined VGR and Local Fund Repayment from Either General Fund or Fund 1020 Affordable Housing, Stemming from the January 2020 HUD Environmental Monitoring Findings and Required Corrective Actions for the Gateway Terrace II Affordable Housing Project REPORT IN BRIEF Provides the City Council with additional options and information that was requested at the October 21, 2024, Council meeting to assist Council in authorizing the City Manager to move forward with a formal request to HUD to voluntarily reduce future CDBG and/or HOME annual allocations, or authorize repayment to HUD from General Fund and/or Fund 1020 Affordable Housing, or authorize a combined Voluntary Grant Reduction and General Fund/Fund 1020 repayment, in order to satisfy HUD’s required corrective action to repay ineligible expenditures of CDBG and HOME and resolve the environmental findings. RECOMMENDATION City Council - Adopt a motion: Voluntary Grant Reduction Only: A. Authorizing the City Manager to submit a formal letter to HUD requesting Voluntary Grant Reductions of both CDBG and HOME allocations, with a full 1-year reduction of CDBG and a 3-year reduction of HOME; or, B. Authorizing the City Manager to submit a formal letter to HUD requesting Voluntary Grant Reductions of both CDBG and HOME allocations, with a 2-year reduction of CDBG and a 3-year reduction of HOME; or, C. Authorizing the City Manager to submit a formal letter to HUD requesting Voluntary Grant Reductions of both CDBG and HOME allocations, with a 3-year reduction for each allocation; Or - Repayment from Local Fund Only: D. Approving a Supplemental Appropriation from the unreserved, unencumbered General Fund balance in the amount of $700,507 to repay the full balance of the ineligible activities; or, E. Approving a Supplemental Appropriation from the unreserved, unencumbered fund balance of Fund 1020 Affordable Housing in the amount of $700,507 to repay the full balance of the ineligible activities; or, F. Approving a Supplemental Appropriation from each of the above unreserved, unencumbered fund balances, General Fund and Fund 1020 Affordable Housing, in amounts as determined by Council up to the amount of $700,507; Or - Combined VGR and Repayment from Local Fund: G. Approving the City Manager to submit a formal letter to HUD requesting Voluntary Grant Reduction of CDBG at a 1-, 2-, or 3-year reduction, and a repayment of $392,593.55 of HOME ineligible activities from the unreserved, unencumbered fund balances of General Fund or Fund 1020 Affordable Housing, or other appropriate local fund, at Council’s discretion for the number of years of CDBG reduction and HOME local repayment source. And - H. Authorize the Finance Officer to make any and all needed budget adjustments and other actions to support the Council’s above determination.

Action Items Agenda Ready Introduced October 24, 2024

Committee: City Council/Public Finance and Economic Development Authority/Parking Authority
Requested by: Development Services Department
Introduced: October 24, 2024
On agenda: November 4, 2024
Passed: November 4, 2024

Where it was heard