MEETING DATE:
April 28, 2026
SUBJECT:
Title
RESOLUTION NOS. 2026-9579 & 2026-9580 - ADOPTION OF PROGRAM YEAR 2026-2027 CDBG ANNUAL ACTION PLAN AND SUBSTANTIAL AMENDMENTS TO 2023-2024 AND 2025-2026 ANNUAL ACTION PLANS
Body
Recommendation
Recommendation
ADOPT a resolution approving the City’s PY 2026-2027 Annual Action Plan, authorizing submittal to the U.S. Department of Housing and Urban Development (HUD), and authorizing the City Manager to finalize and execute all related implementation documents.
ADOPT a resolution approving Substantial Amendments to the PY 2023-2024 and PY 2025-2026 Annual Action Plans, authorizing submittal to HUD, and authorizing the City Manager to finalize and execute all related implementation documents.
Body
Board or Commission Action
On March 24, 2026, the City Council conducted a public hearing to review the Draft PY 2026-2027 Annual Action Plan and proposed Substantial Amendments to the PY 2023-2024 and PY 2025-2026 Annual Action Plans, and authorized release of the documents for a 30-day public comment period. The public comment period was conducted from March 20 through April 22, 2026.
Executive Summary
The U.S. Department of Housing and Urban Development (HUD) allocates annual Community Development Block Grant (CDBG) funding to entitlement jurisdictions for eligible activities benefiting low- and moderate-income (LMI) residents. Funds must be used in accordance with the City’s Consolidated Plan (ConPlan), which was approved on May 13, 2025, and runs through June 30, 2030.
The City conducted the required public hearing and 30-day public comment period for the PY 2026-2027 Annual Action Plan (AAP) and Substantial Amendments. Funding priorities reflect community input gathered during the ConPlan development process, and supplemental outreach conducted during the AAP public comment period.
The City will receive $685,579 in CDBG entitlement funding and will utilize approximately $496,937 in reinstated prior-year funds, bringing the total available funding to $1,182,516.
Discussion
HUD requires the City to adopt a five-year Consolidated Plan (ConPlan) and an Annual Action Plan (AAP). The current ConPlan (approved May 13, 2025) identifies the following priorities:
• Public Infrastructure & Community Facility Improvements
• Affordable Housing
• Public Service
• Planning and Administration
The draft PY 2026-2027 AAP and Substantial Amendments to PY 2023-2024 and PY 2025-2026 were released for a 30-day public review period from March 20 through April 22, 2026, with a public hearing held on April 28, 2026.
Public service funding recommendations are based on a competitive application process evaluated by multiple staff members, community input from the Consolidated Plan, and AAP outreach efforts. Due to funding limitations and the HUD public services cap, not all eligible applications were recommended. The following table outlines the Summary of Proposed 2026-2027 Activities and recommended funding levels.
|
Program |
Activity Description |
Funding |
|
Program Administration |
Program staffing, compliance and reporting |
$108,500 |
|
|
Affirmatively Furthering Fair Housing |
$28,500 |
|
|
Total Program Administration |
$137,000 |
|
Housing Affordability Programs |
Owner-occupied rehabilitation, accessibility improvements, and housing preservation assistance |
$100,000 |
|
Public Services |
Senior rental assistance and wraparound support |
$30,000 |
|
|
Youth/family rental assistance and housing stabilization |
$25,000 |
|
|
Meal delivery for seniors |
$18,500 |
|
|
Food distribution services for youth and families |
$14,000 |
|
|
Senior transportation services |
$15,000 |
|
|
Total Public Services Activities |
$102,500 |
|
Community Facility Improvements |
Senior Activity Center HVAC and resiliency improvements; facility accessibility and system upgrades |
$346,079 |
|
Neighborhood Infrastructure Improvements |
Richmar Park Phase 2 improvements, Bradley Park improvements, neighborhood lighting, pedestrian and ADA improvements in LMI areas |
$496,937 |
|
Total PY 2026-2027 Activities |
$1,182,516 |
Notable items for the Proposed 2026-2027 Activities include two public service providers with the capacity to support San Marcos seniors and families with rental assistance. Program details and program qualifications are included in Attachment 5. Additionally, the AAP includes funding dedicated to an owner occupied rehab program that supports the City to meet dedicated Housing Element requirements and supports City Council’s goals.
Timeliness Requirement: HUD requires timely expenditure of CDBG funds. The city has prioritized construction-ready projects and prepared substantial amendments to reallocate funding from planning activities to capital improvements, supporting compliance with HUD timeliness standards.
The following table outlines a Summary of Proposed Substantial Amendments to support timely expenditure of CDBG funds and align available resources with current project costs and implementation priorities.
|
Project |
Original Budget |
Amended Budget |
Change |
Revised Funding Sources |
|
Bradley Park Master Plan |
$250,000 |
$0 |
-$250,000 |
Project removed |
|
Neighborhood Lighting Improvements |
$26,676 |
$26,676 |
- |
$26,676 (PY 2025 Entitlement) |
|
Richmar Park Phase 2 |
$839,776 |
$1,200,000 |
+$360,224 |
$490,861 (Prior-Year Funds); $496,937 (Restored HUD Funds) |
|
Senior Activity Center HVAC Rehabilitation |
$1,156,899 |
$1,500,000 |
+$343,101 |
$445,425 (PY 2025 Entitlement) |
|
Program Administration |
$140,729 |
$140,729 |
- |
$114,581 (PY 2025 Entitlement); $25,878 (Prior-Year Funds) |
Following City Council approval, the AAP and Substantial Amendments will be submitted to HUD. Upon approval, funding will be available through a reimbursable grant beginning July 1, 2026.
Environmental Review
The activities associated with this item involve program planning and administrative actions and are not considered a “Project” under the California Environmental Quality Act (CEQA) pursuant to Section 15378 of the CEQA Guidelines. Environmental reviews will be conducted for individual projects as required prior to implementation, including compliance with applicable federal environmental requirements.
Fiscal Impact
CDBG funding is administered as a reimbursable federal grant program. The City’s $685,579 entitlement allocation will be programmed into the FY 2026-2027 Operating Budget. This Annual Action Plan reflects the City’s second repayment installment of $496,937 as part of a three-year repayment obligation. Failure to adopt the Annual Action Plan would result in the loss of federal funding.
Attachment(s)
1. Resolution 2026-9579 AAP 2026-27 Adoption
2. Resolution 2026-9580 SUB AMEND 2023-24, 2025-26 Approval
3. AAP 2026-27
4. Substantial Amendment - AAP PY 2025-26, PY 2023-24
5. Rental Assistance Program Qualifications
Prepared by: Quinton Hufferd, Senior Management Analyst
Submitted by: Quinton Hufferd, Senior Management Analyst
Reviewed by: Sylvia Solis Daniels, Housing and Neighborhood Services Director
Approved by: Michelle Bender, City Manager