| | | | | | | | Agenda Item - 3.b.
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
| To: | Scott C. Stiles
| From: | Lisa L. Kim
| | Dept.: | City Manager
| Dept.: | Economic Development
| | Subject: | Approval of Substantial Amendment No. 2 to the 2019-20 Annual Action Plan for the use of funding from the Department of Housing and Urban Development. (Action Item) | Date: | 10/8/2019 |
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| | | | | | | | OBJECTIVE
The purpose of this memorandum is to request City Council conduct a public hearing and approve Substantial Amendment Number 2 to the City of Garden Grove’s Fiscal Year 2019-20 Annual Action Plan (AAP), and authorize transmittal of the attached Substantial Amendment Number 2 to the City of Garden Grove’s Fiscal Year 2019-20 AAP to the U.S. Department of Housing and Urban Development (HUD). |
| | | | | | | | BACKGROUND
The City of Garden Grove receives annual entitlement grants from three HUD funding sources, including an annual Community Development Block Grant (CDBG) allocation. On March 26, 2019, the City Council adopted Fiscal Year 2019-20 AAP, which includes the use of CDBG funds for the period from July 1, 2019 through June 30, 2020. HUD rules require a substantial amendment be made to the AAP if the budget for any planned activity described in the AAP is to be changed by 30 percent or more of the entitlement award for that entitlement program, for that program year.
This Substantial Amendment proposes to add $1,542,000 in non-federal funds for the Beach/Trask Sewer Improvements Project, in addition to the $400,000 in CDBG funds already allocated to this project. |
| | | | | | | | DISCUSSION
In Fiscal Year 2011-12, four properties on Thackery Drive were purchased using CDBG funds with the intention of creating jobs via the development of a resort hotel. The timeline for completion of the hotel project has since been extended and may require some redesign of the site plan. With the extended timeline beyond the period approved by HUD, it is necessary to repay the fair market value of the properties purchased with CDBG funds back to the City’s local account with HUD.
City staff has completed an appraisal of the properties purchased and have determined that the fair market value of the properties is $1,542,000.
HUD rules require that the repayment of these funds be made by completing a CDBG eligible project using non-federal funds in the amount of the required repayment. This repayment obligation will be met by using $1,542,000 in in Sewer Capital Funds (fund 631) to complete the Beach/Trask Sewer Improvements Project. |
| | | | | | | | FINANCIAL IMPACT
The City’s adopted FY 2019-20 budget already includes $1,542,000 in Sewer Capitol Funds for the completion of the Brookhurst/Trask Sewer Improvements Project. This substantial Amendment is required because the use of these funds was not specifically called out in the adopted 2019-20 AAP. Therefore, this substantial amendment will have no effect on the adopted budget. |
| | | | | | | | RECOMMENDATION
It is recommended that the City Council:
- Conduct a public hearing and accept public comments regarding proposed Substantial Amendment Number 2; and
- Direct staff to transmit Substantial Amendment Number 2 to the Department of Housing and Urban Development.
By: Allison Wilson, Neighborhood Improvement Manager
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| ATTACHMENTS: | | Description | Upload Date | Type | File Name | | Substantial Amendment Number 2 | 9/20/2019 | Executive Summary | SUBSTANTIAL_AMENDMENT_#2_Without_Public_Notices.pdf |
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