ITEM 8-C
Council Meeting: April 25, 1995
Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Introduction for First Reading an Amendment to the City
of Santa Monica Municipal Code Sections 2.68.010,
2.68.030, 2.68.040, 2.68.050, 2.68.060, 2.68.070, and
2.68.080, Pertaining to Policies and Procedures of the
Community Development Block Grant Program
INTRODUCTION
This report transmits for first reading an amendment to the City
of Santa Monica's Municipal Code sections pertaining to
procedures and policies of the Community Development Block Grant
(CDBG) Program.
BACKGROUND
In 1982, the City Council first adopted a local ordinance that
sets forth specific requirements regulating the use of the
City's annual CDBG entitlement funds received through the U.S.
Department of Housing and Urban Development (HUD). This local
ordinance requires periodic updating in order to remain
consistent with changing HUD policies and procedures. The last
amendment occurred in FY 1988-89 to reflect HUD Housing and
Community Development Amendments of 1987.
Since FY 1988-89, HUD has made a number of changes to the
implementing regulations pertaining to the administration of CDBG
funds. On January 5, 1995, HUD released a final rule
consolidating into a single submission the planning and
application aspects of all HUD entitlement grants, including CDBG
and Home Investment Partnership Act (HOME) program funds. In so
doing, a new Consolidated Plan is required to be developed by the
City and submitted to HUD by May of 1995. This plan will
contain a needs assessment, a five-year strategic plan, and a
one-year action plan that allocates all federal funds for the
upcoming program year. The attached amendment reflects these
Consolidated Plan requirements.
DISCUSSION
The proposed amendment seeks to either revise or fully replace
many of the CDBG requirements stipulated in the current
ordinance. The proposed amendments effect the following changes:
Reiterate the statutory goals established by HUD thereby
ensuring that low- and moderate-income persons are the primary
beneficiaries of CDBG funds and that these funds are used to
provide decent housing, a suitable living environment, and
economic opportunities;
Establish the specific priorities and stipulations
pertaining to the local use of CDBG funds for housing, economic
development, job creation and other community development
activities within the context of the City's Consolidated Plan to
be updated every five years;
Replace the development of a two-year Community Development
Plan with a five-year Consolidated Plan that will identify local
community development and planning needs and priorities;
Amend the community involvement process to lengthen the
Consolidated Plan community review period from fourteen (14) days
to thirty (30) days and to establish a minimum of two (2) public
hearings held prior to the adoption of the Consolidated Plan; and
Replace the annual plan and review requirements to be
consistent with all HUD Consolidated Plan requirements.
FISCAL/BUDGETARY IMPACT
This amendment to Municipal Code sections 2.68.010, 2.68.030,
2.68.040, 2.68.050, 2.68.060, 2.68.070, and 2.68.080 has no
fiscal or budgetary impact. The allocation of all federal funds
including CDBG and HOME will be made within the context of the
City's Consolidated Plan and Citywide budget.
RECOMMENDATION
It is recommended that the accompanying ordinance be introduced
for first reading.
Prepared by: Susan McCarthy, Director
Julie Johnson, Acting Manager
Human Services Division
Community and Cultural Services Department
ORDINANCE NUMBER _____ (CCS)
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AMENDING SANTA MONICA MUNICIPAL
CODE SECTIONS 2.68.010, 2.68.030, 2.68.040, 2.68.050, 2.68.060,
2.68.070 AND 2.68.080 RELATING TO PROCEDURES AND POLICIES
OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS
FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 2.68.010 is
amended to read as follows:
2.68.010 Findings.
The City Council finds and declares:
(a) The Congress of the United States has passed
and the President of the United States has signed the
Housing and Community Development Amendments of 1987,
amending the Housing and Community Development Act of
1974.
(ba) The Housing and Community Development Act of
1974 established a Community Development Block Grant
Program to provide grants to local communities to meet
housing and community development needs principally of
low and moderate income persons.
(c) The Housing and Community Development
Amendments of 1987 have eliminated many requires
concerning applications and planning documents and the
participation of low and moderate income persons in the
planning, development, and implementation of the
community Development Block Grant Program.
(b) The Congress of the United States has passed
and the President of the United States has signed the
National Affordable Housing Act of 1990 which amends
the Housing and Community Development Act of 1974 and
further establishes the HOME Investment Partnership
Program (HOME) to meet affordable housing needs.
(c) Implementing regulations have been amended to
consolidate into a single submission the planning and
application aspects of all HUD formula grants,
including Community Development Block Grants and HOME,
through a final rule issued by the Housing and Urban
Development Department, which became effective January
6, 1995.
(ed) The City Council desires to ensure that low
and moderate income persons are the primary
beneficiaries of the Community Development Block Grant
Program.
(de) The City Council desires to ensure that
procedures exist for maximum participation by citizens
in the planning, development, and implementation of the
Community Development Block Grant Program in the City
of Santa Monica for the implementation of all HUD
formula grants, including the HUD Consolidated Plan
requirements, are adopted which examine local community
needs and address those needs in an appropriate manner.
SECTION 2. Santa Monica Municipal Code Section 2.68.030 is
amended to read as follows:
2.68.030 Community Development Block Grant Program
Policies and Restrictions.
(a) Each program or other activity funded by the
Community Development Block Grant Program shall
primarily benefit low and moderate income persons. Each
project or activity funded by the Community Development
Block Grant Program shall give primarily benefit
maximum priority to low and moderate income persons and
shall be consistent with the purposes and policies set
forth in this Chapter.
(b) A program project or other activity funded by
the Community Development Block Grant Program will not
be considered to give maximum priority to low and
moderate income persons unless:
(1) At least 75% of its direct beneficiaries
are low and moderate income persons; or
(2) At least 51% of the population of the
project area benefited by the activities are low and
moderate income persons.
(c) Notwithstanding subdivision (b), the City
Council may, upon a finding of important community need
as set forth in the Community Development Plan, provide
funding to a program or activity if at least 51% of
the direct beneficiaries are low and moderate income
persons.
(c) Community Development Block Grant funds shall
be used to address needs identified in the City's
Consolidated Plan and may include activities to address
affordable housing, community and public services,
accessibility, public facility improvements, economic
development, and other Community Development Block
Grant eligible activities.
(d) No more than 15% of any year's allocation of
Community Development Block Grant funds shall be
expended on public services.
(fe) No more than 20% of any year's allocation of
Community Development Block Grant funds shall be
expended on general administrative costs.
(d) A principal activity of the Community
Development Block Grant Program shall be to address the
housing needs of low and moderate income persons. In
prioritizing programs and activities, the highest
priority shall be given to cost effective programs that
expand affordable housing opportunities to low and
moderate income persons or that improve the ability of
low and moderate income persons to pay for decent
housing through economic development activities.
(e) Any Community Development Block Grant Program
funds used for economic development, including
commercial or industrial development, must directly
create or retain jobs for persons of low and moderate
income or directly impact upon commercial
revitalization in a project area and must be consistent
with the following standards:
(1) At least 75% of funds allocated for
economic development must be allocated to and expended
in project areas composed of at least 51% low and
moderate income residents or must directly and
positively impact upon low and moderate residents of
these area; or
(2) Economic development activities must
assist in creating or retaining jobs for low and
moderate income persons, improve neighborhood
commercial activity in low and moderate income
neighborhoods of the City, or improve opportunities for
small businesses, cooperatives, or community
development corporations or neighborhood organizations
serving low and moderate income persons or project
areas.
The Department of Community and Economic
Development shall develop and implement appropriate
reporting mechanisms to assess the impact of all
economic development activities on low and moderate
income persons and neighborhoods.
(f) No more than 20% of any year's allocation of
Community Development Block Grant funds shall be
expended on general administrative costs.
(g) At least sixty percent (60%) of all CDBG
funds expended pursuant to the City's two year
Community Development Plan will be for activities which
benefit low and moderate income persons. Such
activities will be described in the City's Final
Statement of Projected Uses as submitted to HUD.
SECTION 3. Santa Monica Municipal Code Section 2.68.040 is
amended to read as follows:
2.68.040 Community Development Consolidated Plan.
(a) Expenditure of Community Development Block
Grant funds shall be made only in accordance with the
Community Development Consolidated Plan.
(b) At a minimum, the Consolidated Plan shall be
prepared by the City every five years to identify local
community development and planning needs and shall
contain the following components:
(1) A description of housing and community
development needs identified through relevant
information from previous submissions, other reports
and studies, community input, and consultation with
other local jurisdictions and entities.
(2) A five-year strategic plan that brings
needs and resources together in a coordinated housing
and community development strategy describing actions,
projects, and programs the City plans to initiate or
complete over the next five years.
(3) A one-year action plan, to be adopted
annually, that lists projects and activities the City
will undertake to address priority needs and local
objectives through anticipated HUD formula grants
including Community Development Block Grant. The
Community Development Department of Community and
Economic Development as part of a two year program
planning process for the Community Development Block
Grant Program and shall contain the following
components:
(1) A description of the geographic
boundaries of each program or activity the City intends
to fund.
(2) Using the best available data, a
description of the economic characteristics of each
neighborhood in which Community Development Block Grant
Program funds are to be expended and the identification
of each neighborhood that will be affected or served by
a program or activity the City intends to fund.
(3) The manner in which low and moderate
income persons will be benefited or affected by
programs and activities the City intends to fund.
(4) The manner in which neighborhoods will
be benefited or affected by programs and activities the
City intends to fund.
(5) The manner in which minority residents
will be benefited or affected by programs and
activities the City intends to fund.
(6) The amount of money the City intends to
allocate for each program or activity.
(7) The estimated cost of general
administration by the City.
SECTION 4. Santa Monica Municipal Code Section 2.68.050
amended to read as follows:
2.68.050 Citizen participation.
(a) Public hearings required by this Chapter
shall be held at times and locations convenient to low
and moderate income persons. All interested persons
shall have the right to express their views and
comments at any and all public hearings.
(b) Prior to the preparation of the Community
Development Plan, a community-wide meeting shall be
held to receive comments on the community development
activities of the City.
(c) Upon completion of the proposed Community
Development Plan, it shall be released to the public no
later than twenty-eight (28) days prior to City Council
action on the Plan in accordance with Section 2.68.060.
A community review period of fourteen (14) days shall
commence with the release of the Plan. All interested
persons may submit written comments during this review
period to the Department of Community and Economic
Development, Community and Neighborhood Services
Division. Written comments received through the end of
the business day of the 14th day of the community
review period shall be transmitted to the City Council.
(d) Notice of any public hearing required by this
Chapter shall be provided as follows:
(1) At least ten (10) days prior to the
public hearing, notice shall be published in
easily-readable type in the nonlegal section of all
newspapers of general circulation in the city. The
notice shall indicate the date, time, place, and
purpose of the hearing. In the case of non-English
newspapers, the notice shall be in the language of the
newspaper.
(2) Appropriate press releases describing
the purpose of the hearing shall be distributed to
newspapers of general circulation in the City, to
newspapers serving low and moderate income
neighborhoods, to television and radio stations, and to
organizations serving low and moderate income persons
in the City.
(3) Radio and television stations shall be
requested to provide public service announcements
indicating the date, time, place, and purpose of the
public hearing.
(4) At least fourteen (14) days prior to the
public hearing, notice of the date, time, place, and
purpose of the public hearing shall be mailed to any
person who has requested to be placed on a Citizen
Participation Mailing List to be maintained by the
Department of Community and Economic Development.
(e) The failure to receive notice by any person
entitled thereto pursuant to this Chapter does not
affect the validity of any action taken pursuant to
this Chapter.
2.68.050 Community Involvement.
(a) The preparation of the Consolidated Plan will
result from a community involvement process that will
provide for and encourage involvement of low income,
very low income, and extremely low income residents and
will encourage participation of all City residents
including minorities, non-English speaking persons, as
well as persons with impaired mobility, vision, or
hearing.
(b) Prior to the adoption of the Consolidated
Plan, a minimum of two public hearings will be held at
convenient times for people who might benefit from HUD
formula grants including Community Development Block
Grant.
(c) The proposed Consolidated Plan will be made
available for a 30 day community review period prior to
its submission to HUD. All interested persons may
submit written comments during this community review
period. Written comments will be incorporated into the
final Consolidated Plan to the extent possible.
(d) Notice of availability of the proposed
Consolidated Plan for the 30 day review period will be
published in easily-readable type in the nonlegal
section of newspapers with general circulation in the
area.
(e) At least fourteen (14) days prior to any
public hearing related to the Consolidated Plan, notice
of the date, time, place, and purpose of the public
hearing shall be published in easily-readable type in
the nonlegal section of newspapers with general
circulation in the area.
(f) Appropriate notices describing the purpose of
any public hearing related to the Consolidated Plan
shall be distributed to newspapers of general
circulation in the City, to newspapers and newsletters
serving low and moderate income neighborhoods, to
television and radio stations, and to organizations
serving low and moderate income persons.
SECTION 5. Santa Monica Municipal Code Section 2.68.060 is
amended to read as follows:
2.68.060 Approval and amendment of Community Development
Consolidated Plan
(a) Prior to the submission to the United States
Department of Housing and Urban Development of a Statement of
Community Development Objectives or similar document, the
proposed Consolidated Community Development Plan shall be
presented to the City Council for its approval. Upon approval,
the Consolidated Community Development Plan shall become the
vehicle for local design, implementation, and evaluation of the
Community Development Block Grant Program.
(b) Prior to taking action on the proposed Community
Development Plan, the City Council shall hold at least one public
hearing. Following the public hearing, the City Council shall
approve the Community Development Plan with such amendments that
it deems appropriate.
(b)(c) The City Council may approve amendments to the
Consolidated Community Development Plan. Any amendments made
after the initial approval of the Consolidated Community
Development Plan shall be approved following public hearing as
provided for in this Chapter if the amendment either individually
or in combination with previous amendments concerns more than ten
percent of the current year's entitlement amount.
SECTION 6. Santa Monica Municipal Code Section 2.68.060 is
amended to read as follows:
2.68.070 Program review.
(a) The City Council shall be provided with an
annual Grantee Performance Report containing the
following information:
(1) A description of the progress made on
each program or activity funded by the Co=unity
Development Block Grant Program during the period
covered by the report, including a description of the
objectives that have been achieved, the amount of
service or assistance provided, the location or area
where service was provided, the total number of persons
receiving service or assistance, and the total number
of low and moderate income persons receiving service or
assistance.
(2) The total amount of funds expended for
each program or activity during the period covered by
the report including the amount expended for
administration.
(3) The total amount of any allocated but
unexpended community Development Block Grant Program
funds, the year the funds were allocated, and the
program or activity for which the allocated funds
remain unexpended.
(4) The total amount of unexpended and
unallocated Community Development Block Grant Program
funds.
(b) The report required by this Section shall be
made available to the City Council on or before January
31st of each year covering the activity for the
previous program year.
(c) On or before January 31st of each year, the
City Council shall hold a public hearing for the
purpose of reviewing the performance of the Community
Development Grant Program during the previous program
year. The public hearing shall be held in conjunction
with the Department of Community and Economic
Development's written presentation of the Community
Development Program funding rationale for the next year
to the City Council.
(d) Any interested person may file with the
Department of Community and Economic Development a
written complaint concerning the Community Development
Block Grant Program or any program or activity funded
by the Community Development Block Grant Program. The
Department of Community and Economic Development shall
provide a written response to the complaint within
fifteen (15) working days of the filing of the
complaint.
2.68.070 One-Year Action Plan and Annual Review.
(a) The One-Year Action Plan will be prepared
annually to describe the federal resources, including
Community Development Block Grant, expected to be
available to address the priority needs and specific
objectives identified in the Consolidated Plan's five-
year strategic plan.
(b) The One-Year Action Plan will provide a
description of the activities to be undertaken during
the next program year to address priority needs. This
description of activities shall estimate the number and
type of households that will benefit from the proposed
activities; the geographic areas to which funds will be
directed; the specific local objectives and priority
needs that will be addressed by the activities using
HUD formula grant funds, including Community
Development Block Grant funds, and program income the
City expects to receive during the program year; and a
target date for completion of the activity.
(c) A performance report describing the
activities undertaken in the prior program year will be
prepared and submitted to the Department of Housing and
Urban Development no later than September 30th of the
following program year. This report will detail the
expenditures incurred and program accomplishments of
the One-Year Action Plan in the prior program year.
The City will make copies of this report available to
the community in sufficient time as to permit citizens
to comment on the report prior to its submission to
HUD. Notification of availability of this report will
be made in easily readable type in the nonlegal section
of newspapers with a general circulation within the
area.
SECTION 7. Santa Monica Municipal Code Section 2.68.080 is
amended to read as follows:
2.68.080 Information available to the public.
All records maintained by the City in connection
with the Community Development Block Grant Program
shall be available to the public in accordance with the
California Public Records Act. The City shall provide
to residents without cost a reasonable number of copies
of the Consolidated Community Development Plan, any
proposed Consolidated Community Development Plan or
amendment thereto, the Statement of Objectives, the
annual Grantee Performance Report, the reports required
by Section 2.68.070, and this Chapter.
SECTION 8. Any provision of the Santa Monica Municipal Code
or appendices thereto inconsistent with the provisions of this
Ordinance, to the extent of such inconsistencies and no further,
are hereby repealed or modified to that extent necessary to
affect the provisions of this Ordinance.
SECTION 9. If any section, subsection, sentence, clause, or
phrase of this Ordinance is for any reason held to be invalid or
unconstitutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby
declares that it would have passed this Ordinance, and each and
every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether
any portion of the ordinance would be subsequently declared
invalid or unconstitutional.
SECTION 10. The Mayor shall sign and the City Clerk shall
attest to the passage of this Ordinance. The City Clerk shall
cause the same to be published once in the official newspaper
within 15 days after its adoption. This ordinance shall become
effective after 30 days from its adoption.
APPROVED AS TO FORM:
____________________________
MARSHA JONES MOUTRIE
City Attorney