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    23.    
City Council Regular
Meeting Date: 06/23/2020  

SUBJECT:
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM 2019-2020 ANNUAL ACTION PLAN SUBSTANTIAL AMENDMENT 
RECOMMENDATION:
  1. Approve the proposed Substantial Amendment to the 2019-2020 Annual Action Plan for the Community Development Block Grant Program. 
     
  2. Authorize the City Manager to execute all agreements and related documents pertaining to the submission. 
     
  3. Adopt A Resolution entitled: A RESOLUTION OF THE CITY OF CHINO HILLS, ADOPTING A BUDGET AMENDMENT FOR FISCAL YEAR 2019-20 INCREASING THE COMMUNITY DEVELOPMENT BLOCK GRANT FUND BY $245,261 FOR THE CARES ACT FUNDING ALLOCATION.
BACKGROUND/ANALYSIS:
On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security (CARES Act) was signed into law to respond to the growing effects of COVID-19. The CARES Act made available $5 billion in Community Development Block Grant Coronavirus (CDBG-CV) funds. Of this amount, the Department of Housing and Urban Development (HUD) allocated $2 billion based on the fiscal year 2019-2020 Community Development Block Grant (CDBG) formula as part of the first round of fund allocations; the City of Chino Hills' allocation is $245,261.  HUD will allocate the remaining $3 billion based on needs as follows; $1 billion to states and insular areas, and $2 billion to state and local governments at the discretion of the HUD Secretary. 

The CDBG-CV special allocation enables communities to effectively address the impact of COVID-19 on their communities, especially low and moderate-income residents. The CDBG-CV special allocation is governed through HUD; therefore, as an entitlement city, the City of Chino Hills must comply with HUD prescribed statues and regulations to add this special funding to the current 2019-2020 Annual Action Plan. 

The City's Citizen Participation Plan states that the Annual Action Plan will need to be formally amended whenever there is a "substantial amendment" defined as (1) a substantial change to the purpose, scope, location or beneficiary of an activity or (2) any cumulative change equal to or in excess of 25% of the City’s entitlement funds for that program year. Both of the requirements were met as a result of the CARES Act allocation. 

The substantial amendment to the City's 2019-2020 Annual Action Plan will result in the allocation of CDBG-CV funds in the amount of $245,261, including $49,050 for administrative costs, as described below:
 
  
Proposed Project  Original Allocation New Allocation Description
Microenterprise Business Grant Program $0 $245,261
Provide grants in the amount of $2,500 to small businesses with five or fewer employees who demonstrate financial need or negative impact as a result of COVID-19. Businesses must be private for-profit operating legally within the City. Non-profit entities and home-based businesses are not eligible.   
 

The City will partner with a consultant that not only has CDBG knowledge, but experience with microenterprise business programs to manage the program. An implementation date has not been determined, but the City will work closely with the consultant to quickly develop application and submission requirements that not only meet CDBG requirements, but makes it as easy as possible for the applicant.  Grants will be awarded on a first-come, first-served basis. HUD continues to issue new guidance on the use of COVID-19 funds. The City will monitor the program and modify program requirements as new guidance is released. 

Currently, this is the only funding that was allocated to the City of Chino Hills through the CARES Act. If additional funding is received, the City may look to implement other programs including an Economic Development Business Grant Program. The details of the program are to be determined, but businesses would need to demonstrate that jobs for low- and moderate-income individuals are being created or retained with the funds.   

As stated in the newly amended Citizen Participation Plan and waiver received from HUD, substantial amendments to the Action Plan for COVID-19 activities require a public hearing with citizens given an opportunity to comment and review for a period no less than five days. The Substantial Amendment was noticed for public review June 15, 2020 through June 22, 2020. Any public comments received will be included in the final report.   

 
ENVIRONMENTAL (CEQA) REVIEW:
This proposed action is exempt from review under the California Environmental Quality Act California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA regulations (14 California Code Regulations §§ 15000, et seq.) because it constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, this action does not constitute a " project" that requires environmental review (see specifically 14 CCR § 15378 (b)(4-5)).
 
FISCAL IMPACT:
Community Development Block Grant funds are provided by the U.S. Department of Housing and Urban Development.  The proposed budget amendment will increase the expenditure and revenue budget in the Community Development Block Grant Fund by $245,261. There will be a zero net effect on fund balance. There is no impact to the General Fund with this item. 
Attachments
2019/2020 Annual Action Plan Substantial Amendment
Resolution
Exhibit No. 1 - Budget Amendment

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