MEETING DATE:
MAY 13, 2025
SUBJECT:
Title
RESOLUTION NOS. 2025-9434 & 2025-9435 - APPROVAL OF THE COMMUNITY DEVELOPMENT BLOCK GRANT 2025-2029 CONSOLIDATED PLAN AND 2025-2026 ANNUAL ACTION PLAN
Body
Recommendation
Recommendation
1. OPEN, CONDUCT and CLOSE a public hearing regarding the proposed use of federal Community Development Block Grant funds for the 2025-2029 Consolidated Plan and 2025-2026 Annual Action Plan.
2. ADOPT resolution approving the City’s 2025-2029 Consolidated Plan and 2025-2026 Annual Action Plan, authorizing the submittal of the plans to the U.S. Department of Housing and Urban Development and authorizing the City Manager to approve and execute all related implementation documents.
3. ADOPT resolution approving the substantial amendments to the 2018-2019, 2019-2020, 2020-2021, 2021-2022, and 2022-2023 Annual Action Plans, authorizing submittal of the Plans to the U.S. Department of Housing and Urban Development and authorizing the City Manager to improve and execute all related implementation documents.
Body
Board or Commission Action
On May 12, 2020, the City Council approved Resolution No. 2020-8753 approving the 2020-2025 Community Development Block Grant Consolidated Plan and 2020-2021 Annual Action Plan (Vote: 5:0).
On April 8, 2025, the City Council conducted a public hearing approving proposed goals for the Community Development Block Grant 2025-2029 Consolidated Plan and 2025-2026 Annual Action Plan, and opened a 30-day public comment period for the proposed 2025-2029 Consolidated Plan and 2025-2026 Annual Action Plan to solicit input, beginning April 14, 2025 (Vote: 5:0).
Relevant Council Strategic Theme
Quality of Life
Executive Summary
The City of San Marcos receives annual Community Development Block Grant (CDBG) entitlement funds from the U.S. Department of Housing and Urban Development (HUD) to support projects and programs that benefit low- and moderate-income (LMI) individuals and households. To remain eligible for this funding, HUD requires jurisdictions to adopt a five-year Consolidated Plan and submit an Annual Action Plan each program year.
Discussion
The current Consolidated Plan, approved in 2020, expires on June 30, 2025. The proposed 2025-2029 Consolidated Plan outlines strategic goals to guide CDBG investments over the next five years (July 1, 2025 - June 30, 2030). The accompanying 2025-2026 Annual Action Plan identifies the specific programs and activities that will be funded in the upcoming program year to address identified community needs.
Community Input: To ensure the plan reflects local priorities, City staff conducted a Community Needs Assessment from September through November 2024. This outreach effort included public surveys, stakeholder meetings, and consultations with service providers to gather input on current challenges and gaps in services or infrastructure. The information collected was used to develop the draft goals and funding strategies included in the Consolidated Plan and Annual Action Plan.
On April 8, 2025, the City Council held a public hearing to review the proposed goals and authorize the release of the draft documents for public comment. The plans were published on the City’s website on April 14, 2025, initiating a 30-day comment period. This public review window will close at the conclusion of the public hearing held on May 13, 2025.
Estimated Program Funding: For Program Year (PY) 2025-2026, the City anticipates receiving approximately $662,806 in CDBG funds, this number is an estimate based on prior year allocations. An additional $2,011,656 in available funds from previous years brings the total estimated available funding to $2,674,462.
Strategic Goals and Funding Priorities
The 2025-2030 Consolidated Plan identifies the following goals based on community feedback:
• Public Infrastructure and Facility Improvements (Capital Improvement): Includes streetlight installation, sidewalk reconstruction, ADA improvements, and upgrades to parks and community centers in LMI neighborhoods.
• Affordable Housing: Supports housing rehabilitation and infrastructure to enable new affordable housing development.
• Public Services: Funds programs serving youth, seniors, individuals experiencing or at risk of homelessness, and people with disabilities.
Below is a summary of the proposed activities for the 2025-2026 Annual Action Plan.
|
Activity |
Activity Description |
Recommended Funding |
|
Administration |
Program Admin and Planning |
$106,561 |
|
|
Fair Housing |
$26,000 |
|
|
Total Administration Activities |
$132,561 |
|
Public Services |
Latinx victim advocacy services |
$14,000 |
|
|
Senior Nutrition Program |
$20,000 |
|
|
Rental assistance for low-income seniors |
$20,000 |
|
|
Homeless Prevention and rental assistance |
$20,000 |
|
|
Youth Services and family wraparound services |
$15,000 |
|
|
Domestic violence support programs |
$10,000 |
|
|
Total Public Services Activities |
$99,000 |
|
Capital Improvement |
New Funding |
$431,245 |
|
|
Prior Funding Available |
$2,011,656 |
|
|
Total Capital Improvement Activities |
$2,442,901 |
|
|
Total PY 2025-2026 Activities |
$2,674,462 |
Program Administration - $132,561
HUD limits spending in this category to 20 percent of the annual allocation. Funding will support City staff in managing the CDBG program, including planning, reporting, financial oversight, and compliance. Of this amount, $26,000 will be allocated for fair housing education and legal support services.
Public Services - $99,000
HUD limits spending in this category to 15 percent of the annual allocation. Public service providers were solicited through a competitive application process that was published on February 3 and closed on March 3. A total of 16 applications were received requesting $594,828 in public service funds. Applications were recommended for funding based on HUD requirements and alignment with Consolidated Plan identified needs.
Capital Projects - $431,245 (new funds) + $2,011,656 (prior years)
Capital improvements represent the largest share of proposed funding. Projects include:
Senior Activity Center HVAC Improvement including a new cooling system, Bradley Park improvements, LMI Neighborhood Lighting Improvements to include pedestrian lighting improvements in income-qualifying residential locations, and the completion of Richmar Park Phase 2 Improvements to include a new mini-pitch system, shade structure, and other park features. Capital project expenses vary based on material and labor costs and will be comprehensively budgeted and planned to leverage external funding sources to accomplish all community development goals.
Substantial Amendments: HUD is finalizing their monitoring of program years 2020-2021 and 2021-2022 and requires the City to refund $1,490,811.83 into CDBG eligible capital projects over the next three years using non-federal sources. Beginning July 2025, the first of three payments of $496,937 will be reimbursed to the City’s CDBG line of credit to allocate to eligible activities.
The reimbursement will fund older program years, which are in threat of expiring. A substantial amendment is required to utilize expiring older program year funding first and substantially amending $300,713 from PY 2023-2024 from Richmar Park to the Senior Center HVAC activity. Additionally, the City will refund ineligible citywide ADA activities and minimal program administration activities in Program Years 2018-2019, 2019-2020, 2020-2021, 2021-2022, and 2022-2023 Annual Action Plans, totaling $1,490,811. These funds will be reallocated into eligible capital projects as noted above including the Senior Center HVAC, Bradley Park, LMI neighborhood lighting, Richmar Park and eligible future capital projects. Staff have implemented new systems, in coordination with HUD staff, to ensure all future capital program receives HUD pre-approval prior to project bidding. Additional details are included in Attachment 3.
Following the public hearing, staff will finalize the PY 2025-2029 Consolidated Plan and PY 2025-2026 AAP and prepare for submission to HUD once the entitlement allocation is announced and modifications are completed. Once approved by HUD, CDBG funding will be made available through a reimbursable grant starting July 1, 2025.
Environmental Review
The activity performed under these actions are not a “Project” as defined under Section 15378 of the CEQA Guidelines; and, is therefore not subject to environmental review pursuant to CEQA Guidelines section 15060(c)(3).
Fiscal Impact
There will be no impact on general funds. CDBG is a cost reimbursement program, requiring the City to pay costs upfront and then submit for reimbursement on a quarterly basis. CDBG funding will be programmed into the City’s CDBG Operating Budget ($662,806 in Fund 207) and the Capital Improvement Program Budget ($2,011,656) following HUD’s final allocation announcement. Repayment installments will be paid for with non-federal funds. Failure to submit an AAP will result in the loss of federal funds.
Attachment(s)
1. Resolution approving the City’s 2025-2029 Consolidated Plan and 2025-2026 Annual Action Plan, authorizing the submittal of the plans to the U.S. Department of Housing and Urban Development and authorize the City Manager to approve and execute all related implementation documents.
2. City Council Resolution, approving the substantial amendments to the 2018-2019, 2019-2020, 2020-2021, 2021-2022, and 2022-2023 Annual Action Plans, authorizing submittal of the Plans to the U.S. Department of Housing and Urban Development and authorizing the City Manager to improve and execute all related implementation documents.
3. PY 2025-2029 Consolidated Plan & PY 2025-2026 Annual Action Plan
4. Citizen Participation Plan 2025
5. FY 2025-26 Annual Plan Supplement
Prepared by: Quinton Hufferd, Sr. Management Analyst
Submitted by: Quinton Hufferd, Sr. Management Analyst
Reviewed by: Sylvia Solis Daniels, Housing and Neighborhood Services Director
Approved by: Michelle Bender, City Manager