SUBJECT: Consideration and Approval of Substantial Amendments to the 2019 and 2024 U.S. Housing and Urban Development Annual Action Plans, to Consider Repurposing Remaining Coronavirus Community Development Block Grant (CDBG-CV) Funding Originally Appropriated to COVID-19 Pandemic Response Programming in the 2019 Annual Action Plan; to Consider Repurposing CDBG Funding Originally Appropriated in the 2024 Annual Action Plan; and, to Consider Appropriating Unanticipated Amounts of 2024 Program Year CDBG Program Income to Suitable Eligible Project(s) that will Expedite Expenditures REPORT IN BRIEF Considers and recommends approval of proposed amendments to the 2019 and 2024 U.S. Department of Housing and Urban Development Annual Action Plans involving a change in the use of the remaining 2019 Coronavirus Community Development Block Grant (CDBG-CV) funds and the City’s normal entitlement Community Development Block Grant (CDBG) funds, to activities that will expedite the disbursement of both funding sources to meet approaching HUD expenditure deadlines. Additionally, the 2024 Annual Action Plan substantial amendment considers the prior request of City Council to have the opportunity to evaluate making a change to the use of project funding preliminarily awarded to Sierra Saving Grace Homeless Project’s acquisition/rehabilitation activities and recommends no change to the previously approved use of CDBG funds. RECOMMENDATION City Council - Adopt a motion: 2019 Annual Action Plan Amendment: A. Approving Fourth Amendment (Third Substantial Amendment) to the 2019 Annual Action Plan that moves all remaining, unspent CDBG-CV funds (up to $500,109.69) from all current COVID-19 Pandemic support and response projects to the 2023 program year K/13th Street/Hwy 59 Water-Sewer Main & ADA Improvement project currently in progress, which serves a primarily residential area and prepares and plans for future pandemics by helping to protect the City’s potable water supply; and, B. Creating a new project in the 2019 Annual Action Plan that proposes to add all remaining, unspent CDBG-CV funding (up to $500,109.69) to the 2023 program year K/13th Street/Hwy 59 Water-Sewer Main & ADA Improvement Project. 2024 Annual Action Plan Amendment: Approving the First Amendment to the 2024 Annual Action Plan, to include: C. Allocating $60,327.87 of unanticipated 2024 Program Year program income to a new 2024 project that proposes to provide supplemental CDBG funding to the 2023 program year K/13th Street/Hwy 59 Water-Sewer Main & ADA Improvement Project; and, D. Reallocating the combined total of disencumbered CDBG Prior Year Resources and reductions in budgeted Activity Delivery Costs ($221,867.37) to a new 2024 project that proposes to provide supplemental CDBG funding to the 2023 program year K/13th Street/Hwy 59 Water-Sewer Main & ADA Improvement project; and, E. Reallocating in advance an anticipated $307,913.40 of CDBG Prior Year Resources, which are expected to be returned to the City during the 2024 Program Year, to the new 2024 project that proposes to provide supplemental CDBG funding to the 2023 program year K/13th Street/Hwy 59 Water-Sewer Main & ADA Improvement Project, after a repayment to HUD of unrelated ineligible expenditures with local funds is completed; and, F. Creating a new project in the 2024 Annual Action Plan (Project #14) utilizing the funding reallocated in Actions B, C, and D, above, to provide supplemental funding to the 2023 program year K/13th Street/Hwy 59 Water-Sewer Main & ADA Improvement Project that is currently in progress; and, G. Formally approving 2024 Project #2, and award CDBG funding in the amount of $586,381 to Sierra Saving Grace Homeless Project, for acquisition with rehabilitation of a 1-4 unit property(ies) within the Merced city limits, as preliminarily approved with the original 2024 Annual Action Plan approval in August 2024; and, H. Authorizing staff to finalize and complete all sections of the Annual Action Plan affected by the substantial amendment and submit the amended plan to HUD; authorizing the City Manager to execute all related documents, certifications, and agreements with HUD; and, I. Authorizing the Finance Officer to make any necessary budget adjustments.

Action Items Agenda Ready Introduced January 15, 2025

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Committee: City Council/Public Finance and Economic Development Authority/Parking Authority
Requested by: Development Services Department
Introduced: January 15, 2025
On agenda: February 3, 2025
Passed: February 3, 2025