AGENDA CAPTION:
Title
Receive a staff presentation and provide direction on whether to bring forward an amendment to the Community Development Block Grant “CDBG” Disaster Recovery Action Plan to cancel the Reimbursement and Rental Rehabilitation programs and reallocate funding to infrastructure projects.
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Meeting date: August 16, 2022
Department: Planning and Development Services
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Fiscal Note:
Prior Council Action: September 6, 2016, City Council approved Resolution 2016-104R approving the CDBG-Disaster Recovery (CDBG-DR) Action Plan, including $2.5 million in funding for a Rental Rehabilitation program. June 4, 2019, City Council approved Resolution 2019-69R reallocating $1 million from the CDBG-DR Rental Rehabilitation program to a new CDBG-DR Reimbursement program for individuals.
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Background Information:
In 2016 City Council approved a Rental Rehabilitation Program as part of the initial CDBG-Disaster Recovery Action Plan, and in 2019 moved $1 million from that program to establish a Reimbursement Program for individuals. Staff is now bringing both programs forward for City Council direction on next steps. Both programs now appear to be infeasible. Costs must be justified as necessary and reasonable in HUD programs, and this does not appear to be possible in both programs.
The Rental Rehabilitation Program has $659,000 remaining. It was to have paid for repairs to 1-4 unit rental properties, in exchange for which the landlord would then be required to rent to people with incomes less than 80% of the area median income, at affordable rents (no more than 30% of their income), for five years. This program was marketed in March and September 2017, May and August 2018, and January 2019, and had no applicants. At the time the program was limited to properties in the floodplain.
Now the Rental Rehabilitation Program could be expanded to the whole city; however, it is not anticipated that any eligible applicants will apply, considering that none did earlier. This program is only for repairs still not completed since the 2015 floods. Damage must be from the 2015 floods; due to the passage of time it will not be possible to know for certain that the damage to an applicant’s property actually was from those floods or later events.
The Reimbursement program has $1 million available. It was to have paid a maximum of $50,000 or 50% of the 2014 (pre-flood) appraised value to reimburse individual home owners for repairs they had contracted out, for damage done by the 2015 floods. In order to be eligible, home owners must currently have incomes of less than 80% of the area median income.
Reimbursements are only allowed for up to one year after the flood event (or up to three years after if an extension is granted by HUD). This means the repairs must have been made before October, 2016 (or with an extension, October 2018). If owners have not kept their receipts and before pictures, per the program design, the City would send an estimator out to look at the claimed repair; however, it will be impossible to ascertain when the repair was completed or what was actually repaired.
As an alternative, staff recommends reallocating funding to CDBG-DR stormwater infrastructure projects that reduce the risk of flooding in neighborhoods. Two projects need additional funds: Midtown and Blanco Gardens. If an additional $1.7 million is allocated, engineers will determine the relative priority of the project components and select the actions to be taken. The reallocation is needed now so these project components can be constructed by mid-2024 and be closed out prior to the end of the CDBG-DR grant.
The Midtown project is currently unfunded, and includes up to three individual components that will address flooding within the Midtown neighborhood, add regional stormwater detention, protect an important evacuation route, and increase conveyance of floodwater in a regional channel. This project would benefit 82 households in a Census Tract that contains approximately 48% people with low to moderate incomes.
The Blanco Gardens project is funded, but one component had to be removed due to lack of funding. This component would further reduce flood risk in the Blanco Gardens neighborhood. Overall, this project benefits 420 households in a Census Tract that contains approximately 69% people with low to moderate incomes.
If City Council directs staff per the recommendation, staff will bring forward an amendment to the CDBG-DR Action Plan to make these changes. The amendment process will include a public hearing and a fourteen day public comment period prior to Council’s final consideration. In addition to the required notifications in the newspaper, staff generally create a press release and social media postings and will be sure to do so for this topic.
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Recommendation:
Staff recommends providing staff direction to bring forward an amendment to the CDBG-DR Action Plan to cancel the Reimbursement and Rental Rehabilitation programs and reallocate the funding to stormwater infrastructure programs.