To: Honorable Mayor and Members of Town Council
From: David L. Corliss, Town Manager
Title
Discussion/Direction: Possible Town Participation in Community Development Block Grant (CDBG) Program
Body
______________________________________________________________________
Executive Summary
The Town was notified by the US Department of Housing and Urban Development (HUD) of its eligibility to participate in the Community Development Block Grant (CDBG) program. The Town is required to respond by September 23, 2019 to inform HUD of its intent to either accept or defer entitlement program status.
The CDBG program is focused on providing benefit to low and moderate income persons in the community. Staff has summarized the following benefits and concerns related to acceptance of HUD entitlement status.
The Town declined to participate in the CDBG program in 2015 and again in 2017 due to concerns with Affirmatively Furthering Fair Housing (AFFH) rules that could arguably impact local zoning and planning powers. These rules are still in place today. Douglas County ended its entitlement status in 2016 due to concerns with HUD rules tied to CDBG funds.
Staff is seeking direction from Town Council in order to respond to HUD by the stated deadline. Council can choose to either accept the entitlement status or decline to participate as in the past. Note that Douglas County administered the CDBG program for the Town in previous years. If the Town accepts entitlement status at this time, it will be responsible for the administration of the program and its requirements. This memo provides additional background information related to the CDBG program, including program requirements, so that Council can provide direction for responding to HUD.
Discussion
HUD notified the Town in a letter (Attachment A) dated August 8, 2019 that Castle Rock meets population criteria to qualify for the Community Development Block Grant (CDBG) program. At least 70% of grant proceeds, estimated to be $222,000 for Castle Rock in 2020, must be used for activities that meet one of the following criteria:
• benefit low and moderate income persons
• prevent or eliminate slums or blight
• address community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available
In the past, CDBG funds have been used within Castle Rock to complete alleyway improvements and make curbs ADA accessible, as well as to support public service programs. Castle Rock was a grantee community under Douglas County for these projects. The letter from HUD notes that a legally binding agreement between the Town and Douglas County would be required if any ongoing HUD projects remain. However, there are no outstanding obligations related to previous HUD financial commitments at this time. Other examples of eligible activities that qualify for CDBG funding include:
• Acquisition of real property
• Relocation and demolition
• Rehabilitation of residential and non-residential structures
• Construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes
• Public services, within certain limits
• Activities relating to energy conservation and renewable energy resources
• Provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities
Acceptance of HUD entitlement status also involves AFFH compliance. The AFFH Fact Sheet (ATTACHMENT B) defines that the purpose of affirmatively furthering fair housing means:
“taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics. Specifically, affirmatively furthering fair housing means taking meaningful actions that, taken together, address significant disparities in housing needs and in access to opportunity, replacing segregated living patterns with truly integrated and balanced living patterns, transforming racially and ethnically concentrated areas of poverty into areas of opportunity, and fostering and maintaining compliance with civil rights and fair housing laws. The duty to affirmatively further fair housing extends to all of a program participant’s activities and programs relating to housing and urban development.”
AFFH rules require the Town to utilize an Assessment of Fair Housing (AFH) tool that assesses fair housing issues related to patterns of integration and segregation; racially and ethnically concentrated areas of poverty; disparities in access to opportunity; and disproportionate housing needs as well as the contributing factors to these issues. Application of the AFH tool could impact local zoning and planning powers. It was largely due to these concerns that the Town of Castle Rock and Douglas County chose to defer entitlement status in the past.
Colorado CDBG Entitlement Cities & Counties
As identified by HUD at <https://www.hud.gov/states/colorado/community/cdbg>, the Colorado entities that have accepted entitlement status include:
|
• Adams County |
• Colorado Springs |
• Jefferson County |
|
• Arapahoe County |
• Commerce City |
• Lakewood |
|
• Arvada |
• City & County of Denver |
• Longmont |
|
• Aurora |
• El Paso County |
• Loveland |
|
• Boulder |
• Fort Collins |
• Pueblo |
|
• City & County of Broomfield |
• Grand Junction |
• Thornton |
|
• Centennial |
• Greeley |
• Westminster |
Examples of CDBG funded projects accomplished by these entities include housing rehabilitation and sewer line replacement (Centennial); energy efficiency grants (Englewood); street/sidewalk accessibility improvements (Centennial); establishing a high school mentoring program to empower students from low-income communities to graduate high school (Arapahoe County); low-income, senior, and special needs housing plus homebuyer assistance (Fort Collins); and, park/playground improvements (Lakewood). Additionally, Westminster’s 2019 Annual Action Plan (ATTACHMENT C), showing planned use of CDBG funds and program overview is attached for reference. This also serves as an example of the extensive requirements of CDBG program planning and administration. As stipulated by CDBG, each of these projects benefits low/moderate income qualified residents of entitlement area.
As stated in the letter received from HUD, “Should Castle Rock elect to receive these CDBG funds, the Town must follow a citizen participation plan and prepare a Consolidated Plan (Plan) that includes a housing and homeless needs assessment, housing market analysis, strategic plan, action plan and certifications. The Plan must be submitted to this office between November 15, 2019 and August 16, 2020”. A portion of grant proceeds from the initial award can be used to reimburse costs associated with preparing the Plan.
Staff Recommendation
Staff recommends that the Council direct staff to reply in favor of accepting HUD entitlement status for 2020. If at any time prior to contract execution with HUD, the Town Council determines that the CDBG requirements are inappropriate for Castle Rock, the Council can choose to exit the program.
Possible Motions
“I move to direct staff to notify HUD of its intent to accept entitlement status and to bring back to Council for consideration a proposed local CDBG program.”
OR
“I move to direct staff to notify HUD of its intent to defer entitlement status.”
Attachments
Attachment A: Letter Regarding Town’s Entitlement Status
Attachment B: AFFH Fact Sheet
Attachment C: Westminster 2019 CDBG Action Plan