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HUD CPD Reallocations Community Development Advisory Committee – 12.15.22 Presentation Overview 2 • Review procedural requirements • Review Council investment policy • Program performance updates (impacted programs) • Staff reallocation recommendations • CDAC discussion, consensus, and action Procedural Requirements 3 • Underspent/underutilized funds and program income must be allocated in a timely manner • Annual Action Plan Substantial Amendment required for reallocations • Public participation per the Citizen Participation Plan • CDAC recommendations to Council (today’s discussion) • Council direction on recommendations (January/February) • Council vote on Annual Action Plan Substantial Amendment (Spring) Council Investment Policies 4 1. Apply future CDBG program income or remnant funding to sustain Physical Improvement Program 2. Apply future HOME program income or remnant funding to sustain Tenant Based Rental Assistance 3. Apply future CARES Act program income or remnant funding to Public Services for Vulnerable Populations 4. Limit annual grant applications to Public Services for Vulnerable Populations (15% CDBG allocation) 5. Utilize solicitations, cooperative purchasing, or IGAs for all other investments 5 Master Services Agreement Performance $3,394,008 allocated (under contract) - $2,260,190 expended - $269,297 in review = $864,521 original allocation remaining + $2,627,915 to contract (HOME ARP/ESG) = $3,492,436 remaining Forecasted to run out in November 2024 based on current service demand • FY 2021-22 Accomplishments: – 20,000 units of service – 5,756 case management – 5,753 shelter bed nights – 3,335 employment services – 1,334 calls to 24/7 line – 852 persons housed – 739 housing navigation services Pandemic Small Business Assistance Performance 6 $300,000 allocated (round 1) + $653,110 allocated (round 2) = $953,110 total allocation - $280,595 expended - $370,686 in review = $301,829 remaining Contract expired 11/1/22 • 32 businesses assisted • 71 jobs retained • $15,735 median amount of assistance ($7,392/job) • COVID connection more difficult to show for businesses 7 Tenant Based Rental Assistance Performance $1,256,694 allocated (under contract) - $314,120 expended - $280,764 in-process = $661,810 left under contract + $394,410 (FY 2020-21 not under contract) + $320,192 program income not under contract = $1,376,412 remaining Funding forecasted to run out in June 2024 based on current lease commitments • 90 individuals in 45 households rehoused • Median rent = $1,220; median bedrooms = 1 • Applicant processing time is 1.5 weeks • Approval to lease-up time is 9 weeks • 5 households currently looking, 3 renewed First Time Homebuyer Program Performance 8 • $686,496 allocated, $0 expended • Market conditions inhibited ability to implement • MAG Housing Update October 2022 data*: – Sales transactions under $300,000 have decreased by 75% since 2011 – From 2017-2022 median sale price increased 93% – In areas of poverty there was a 126% increase – Median sale price for single family units is around $435,000 – Over the past 5 years, an average of 25% of sales were cash – In areas with poverty at 25% or more, 26% of the sales were cash – 26% of the housing stock in the region is either seasonal or investor- owned – 1.2% of housing stock is short-term rentals *Source: https://azmag.gov/Programs/Maps-and-Data/Land-Use-and-Real-Estate/Housing-Data-Explorer CDBG Reallocation Recommendations 9 • FYs 2019-20 & 2020-21 – $2,037.52 (FY 2019-20) and $2,358 (FY 2020-21) remnant, eligible for public services (CARES Act Waiver eligible) – Staff Recommendation: Reallocate to CASS for Master Services Agreement • FY 2021-22 – $79,324.62 remnant and $66,086.39 program income; – Council Policy: Reallocate to Physical Improvement Program (future projects TBD) CDBG Reallocation Recommendations 10 • CV-1 – $2,581.82 remnant – Council Policy: Apply to Public Services – Staff Recommendation: Reallocate to CASS for Master Services Agreement to sustain services • CV-3 – $417,440.83 remnant – Council Policy: Apply to Public Services – Staff Recommendation: Reallocate the CASS for Master Services Agreement to sustain services ESG Reallocation Recommendations 11 • FY2019-20 – $20,473.12 remnant – Utilized by CAP for Rapid Rehousing (clean-up item) • FY2020-21 – $14,384.22 remnant – Utilized by CAP for Rapid Rehousing (clean-up item) • Staff Recommendation: • Propose new Council Policy that all new or remnant ESG funds after FY 2021-22 be allocated to CASS for the Master Services Agreement for long-term sustainability HOME Reallocation Recommendations 12 • Program Income – $320,192 on hand – Council Policy: Apply to Tenant Based Rental Assistance – Staff Recommendation: Reallocate to A New Leaf for TBRA • FY2021-22 – $686,496 unspent – Staff Recommendation: Reallocate to A New Leaf for TBRA for sustainability • Staff Recommendation: • Propose new Council Policy that all new HOME funding be allocated to the TBRA for long-term sustainability (approximately $700K/year) Summary of Staff Recommendations 13 Amount Program Year Reallocate To $2,037.52 CDBG FY 2019-20 CASS for MSA $2,358.00 CDBG FY 2020-21 CASS for MSA $79,324.62 CDBG FY 2021-22 COG for Physical Improvement Program $66,068.39 CDBG Program income COG for Physical Improvement Program $2,581.82 CDBG-CV1 FY 2020-21 CASS for MSA $423,091.14 CDBG-CV3 FY 2020-21 CASS for MSA $20,473.12 ESG FY 2019-20 CAP for Rapid Rehousing* $14,384.22 ESG FY 2020-21 CAP for Rapid Rehousing* $686,496.00 HOME FY 2021-22 A New Leaf for TBRA $320,192.00 HOME Program Income A New Leaf for TBRA $1,617,006.83 Total Requested Reallocation *Funding has already been expended, this is a clean-up item Action Requested 14 • Approve staff reallocation recommendations for presentation to the City Council • Approve recommended new allocation policies: 1. Allocate future HOME program funds to TBRA 2. Reallocate FY 2021-22 and onward remnant funds to the Master Services Agreement