The City of Garden Grove receives annual entitlement grants from HUD funding sources, including an annual Community Development Block Grant (CDBG) and an Emergency Solutions Grant (ESG). On March 26, 2019, City Council adopted the FY 2019-2020 AAP, which includes the use of CDBG and ESG funds for the period of July 1, 2020 through June 30, 2020.  HUD rules require a substantial amendment be made to the AAP if an activity is to be carried out that was not previously described in the AAP. 

On March 27, 2020, the U.S. President signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act. A portion of these relief funds were allocated to HUD entitlement cities. As a result, the City will be receiving a supplemental allocation of $1,194,311 in CDBG-CV funds and $602,486 in ESG-CV funds to assist low-income Garden Grove residents affected by the Novel Coronavirus (COVID-19).

This Substantial Amendment proposes to expand the following programs to assist businesses and residents affected by COVID-19: Small Business Assistance Program, Meals on Wheels Program, and the ESG Rapid Rehousing and Homeless Prevention Programs. In addition to expanding current programs, the City will be implementing a Family Food Box Program, the Community Services Meal Program and will purchase Personal Protective Equipment (PPE) for Garden Grove first responders.

Additionally, City Staff is recommending an amendment to the City’s CPP to allow the public notice and comment period to be decreased to 5-days when amending the Consolidated Plan or AAP during local, state or national emergency declarations. The public noticing and comment period is a time in which the public can review and comment on drafted versions of the Consolidated Plan, AAP, or CPP. The amendment to decrease the public comment period from 30-days to 5-days during an emergency declaration enhances the City’s ability to respond to emergencies, while still providing an opportunity for the public to comment on amendments to the Consolidated Plan and/or AAP.

The City currently offers a Small Business Assistance Loan (SBA) Program through the CDBG allocation, designed to stimulate economic growth and job creation. The City provides 0% interest loans of up to $25,000 to small businesses who hire a minimum of 1 low-income worker. In order to assist small businesses that are impacted by COVID-19, City Staff has amended the SBA Program Guidelines to increase the maximum loan amount for the SBA Program to $50,000 in exchange for hiring 2 low-income workers. The City is also implementing the Jobs 1^st Program, which allows a grant of up to $25,000 to small businesses who retain low-income jobs for 3 months.

In addition, the City will allocate funding to expand the Meals on Wheels Program to include those impacted by COVID-19. The City currently provides CDBG funding to Meals on Wheels Orange County (OC), who provides meals to the Garden Grove senior population. The additional funding will allow resources for Meals on Wheels OC to deliver pre-packaged meals to seniors impacted by COVID-19.   

City Staff is implementing a Community Services Food Distribution Program that will provide prepackaged meals from local restaurants to Garden Grove low-income residents affected by COVID-19. Pick-up dates and times will be scheduled through the Family Resource Centers.   

Community Action Partnership of Orange County (CAPOC) will be providing prepackaged groceries for low income Garden Grove families through the Food Box Program. Pick-up dates and times will be scheduled through the Family Resource Centers.   

The City is recommending an allocation of CDBG funds to purchase Personal Protective Equipment (PPE) for Garden Grove first responders. In order to keep Garden Grove first responders and the general public safe during COVID-19, additional PPE equipment will be necessary to deliver public services to the community.

The City will be expanding homeless services through the additional allocation of ESG-CV funds. Activities that will be funded are Homeless Prevention, which assists individuals who are at risk of becoming homeless with rental assistance and financial stability services to maintain their permanent housing; Rapid Rehousing, which assists individuals who are literally homeless with rental assistance and wrap around stability services to get individuals into permanent housing; and Street Outreach, which connects the homeless population to services and resources.

The amendment to the CPP to decrease the public noticing and comment period to 5-days when amending the Consolidated Plan or AAP is necessary during local, state or national emergency declarations. The normal process for an amendment to the Consolidated Plan or the AAP requires a 30-day public noticing and comment period, which does not give the City the flexibility to respond urgently in an emergency. In response to COVID-19, HUD has allowed the City to request a waiver to decrease the public notice and comment period to 5-days and amend the CPP.

There is no impact to the General Fund.  The additional appropriation requested will be funded by Federal CARES Act, which is a one-time distribution of CDBG-CV and ESG-CV funds in the amount of $1,194,311 and $602,486 respectively.  There will be no impact to the fund balances of the perspective funds.

It is recommended that the City Council:

• Appropriate $1,194,311 in CDBG, Fund 161, for the SBA forgivable loan program, administration costs, and public services.  Any unused appropriation will be carried over to FY 2020-21 up to the timeline for use established by the CARES Act to be used for the same programs. 
• Appropriate $602,486 in ESG, Fund 164, for rental assistance, homeless prevention, and street outreach.  Any unused appropriation will be carried over to FY 2020-21 up to the timeline for use established by the CARES Act to be used for the same programs.
• Direct staff to submit the Substantial Amendment to HUD.
• Authorize the City Manager to execute agreements, and make modifications as appropriate thereto, on behalf of the City.