STAFF REPORT

Operations Committee Meeting, April 30, 2008

FY2009 Community Development Block Grant (CDBG) Annual Action Plan (PL08-035)

Consideration of the FY 2009 Community Development Block Grant Annual Action Plan

Speaker: Ms. Tracy Stone-Dino

From:  Jeffrey G. Ulma, Planning Director
Prepared by:  Tracy Stone-Dino, Senior Housing Planner
Approved by:  William B. Coleman, Jr., Town Manager
Approved by:  Benjamin T. Shivar, Assistant Town Manager

BACKGROUND

The Town of Cary is designated as an Entitlement Community by the U.S. Department of Housing and Urban Development (HUD) and is eligible to receive Community Development Block Grant (CDBG) funds. For FY 2009, CDBG funds in the amount of $450,746 have been allocated to the Town for use in addressing the Town’s affordable housing, infrastructure and economic development needs.  These community development needs are identified and detailed in the FY 2005-2009 Consolidated Plan adopted by Town Council April 29, 2004.

As a condition of participation in the CDBG program, the Town is required to prepare and adopt an Annual Action Plan describing how the Town of Cary plans to utilize the CDBG funds it expects to receive on July 1, 2008.  In addition, for previously approved projects that are no longer viable, the Town must reallocate funds to new activities.  For FY 2007-2008, CDBG funds were allocated to rehabilitate a community center and partner with the local YMCA for programming efforts targeted at low- and moderate-income individuals and families.  However, due to an insufficient number of bids needed to proceed, the project was canceled and those funds were added to the new CDBG grant to be reapplied towards FY 2009 projects. This year the unallocated balance ($380,000) within the general funded Affordable Housing Program has also been included in the funds available.

A public hearing was held on April 24, 2008 to solicit comments regarding the use of the FY 2009 CDBG grants.  Additional proposals for the use of these funds were solicited from citizens, developers of affordable housing, non-profit agencies and organizations and Town departments.  Over $1,565,700 in proposals were received for the available $880,746 in funds. These requests are summarized in Attachment A.  A committee comprised of the Town Manager and Planning Department staff reviewed the requests and recommend that Town Council allocate its FY 2009 CDBG funds to the following areas:

              Note: Specific projects and their descriptions are shown in Attachment A.

The list of recommended projects has been included, along with other required information, in a draft Annual Action Plan.  This Annual Action Plan follows the guidelines developed by HUD.  The Operations Committee is requested to recommend approval of the Annual Action Plan and forward it to the full Council for final adoption on May 8, 2008.  Following adoption of the plan, it must be submitted to the HUD by May 16, 2008 in order for the Town to receive its grant funds. Included in this submission are required HUD application forms and certifications to be executed by the Mayor.

Additional information requested by the Operations Committee:

During the discussion on April 30, 2008, committee members requested additional information related to: 1) clarification of the funding selection criteria, 2) the rationale for not providing continuous funding for Hospice of Wake County, and 3) the nature of the funding request from the White Oak Foundation.

(1) Selection Criteria for Nonprofit Applications

The FY 2009 CDBG funds are allocated to address the Town’s affordable housing, public infrastructure and economic development needs.  These needs are identified in the FY 2005-2009 Consolidated Housing and Community Development Plan adopted by Town Council on April 29, 2004.

Accordingly, the FY 2005-2009 Consolidated Plan (per the HUD CFR 24 570.2 and CFR part 570) and executed by the Town of Cary, certifies that the CDBG funds comply with the following three criteria: 1) Maximum Feasible Priority, 2) Overall Benefit, and 3) Special Assessment.

1.      Maximum Feasible Priority: With respect to activities to be assisted with CDBG funds, the Town certifies that it has developed an Annual Action Plan so as to give maximum feasible priority to activities that benefit low- and moderate-income families or aid in the prevention or elimination of slums or blight.  The Action Plan may also include activities which the grantee certifies are designed to meet other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health and welfare of the community, and other financial resources not available.

2.      Overall Benefit: The aggregate use of CDBG funds including Section 108 guaranteed loans during program year FY 2009 shall principally benefit persons of low- and moderate-income in a manner that ensures that at least 70 percent of the amount is expended for activities that benefit such persons during the designated period.

3.      Special Assessment: The Town of Cary will not attempt to recover any capital costs of public improvements assisted with CDBG funds including Section 108 loan guaranteed funds by assessing any amount against properties owned and occupied by persons of low- and moderate-income.

Upon reviewing the non-profit applications, the criteria as stipulated by HUD were used to determine the funding recommendations in the FY 2009 Annual Action Plan. These non-profit organizations primarily assist low- and moderate-income individuals and families in the service area and provide an overall benefit to the community.

(2) Center for Caring (Hospice of Wake County)

In FY 2008, the Town pledged $158,000 (of what was a total request of $500,000 over a three-year period) in CDBG funds towards the construction of the Hospice of Wake County in exchange for six residential beds for very low- and low-income elderly individuals.

Currently, the Hospice of Wake County is undergoing a capital campaign to raise $13 million for this free-standing building to be built in the Town of Cary.  No construction has begun.  Site plan approval from the Town was given on December 28, 2007 but no building permits have been obtained.  Thus, while the CDBG funds have been pledged, the Center for Caring is not in a position to provide the necessary documents to proceed with the requisition of funds from the current budget cycle since they are still in the early stages of this project.

In staff’s view, not providing additional funding in FY 2009 does not jeopardize the Caring Center’s goal to complete construction of the facility in a timely manner.  According to Hospice of Wake County’s Web site, construction is slated to begin June 2008.  Given this timeframe, the FY 2008 funds already pledged will be granted to the Center for Caring in FY 2009.

Providing funding in this upcoming budget year does, however, inhibit the Town’s ability to fund other viable projects that could use the monies more expeditiously.  Additionally, if the funds are pledged but are not requisitioned in a timely manner, this could potentially have a negative effect on future allocations from the U.S. Department of Housing and Urban Development since we must meet certain HUD drawdown requirements.

(3) The White Oak Foundation Request

The White Oak Foundation submitted an application for CDBG funds to extend the water and sewer lines and to construct a Family/Community Resource Building.  The total amount requested was $100,000 for the community center and $150,000 for the water and sewer lines.  The community center would provide space to improve and expand their outreach initiatives that are offered through the White Oak Foundation and White Oak Missionary Baptist Church.

While the White Oak Foundation requested a total of $250,000, staff recommends $100,000 to assist in extending the water and sewer services to that area.  The physical infrastructure would allow the church to leverage additional funds to build the community center.  Currently, the White Oak Foundation serves low- and moderate-income individuals who are elderly and disabled.  Primarily, their clients reside in the service area and are referred to their organization through the Wake County Human Services.

The White Oak Foundation provides outreach initiative in response to the existing needs within that surrounding service area.  By funding this project, the CDBG funds will be maximized and geographically distributed to serve a greater need not currently being met by other non-profit organizations in this area.

Staff Recommendation:  Staff recommends that the FY 2009 Annual Action Plan including the project list and proposed allocation of funds be adopted.  Staff also recommends Council authorize staff to submit the adopted plan to the United States Department of Housing and Urban Development by May 16, 2008.