Title
Planning and Building Department, Affordable Housing Unit, recommending the Board:
1) Adopt and authorize the Chair to sign Resolution 181-2026 for the submittal of an application to the California Department of Housing and Community Development (HCD) for authority to expend HCD Community Block Development Grant (CDBG) Program Income, Recaptured Funds, and Program Income Administrative Funds under the CDBG Investment Partnerships Program; and, if approved and contingent upon County Counsel approval, the execution of a Standard Agreement, any amendments thereto, and of any related documents necessary to participate in the HCD CDBG Program; and
2) Approve and authorize the Chair to sign a budget transfer amending the Fiscal Year 2026-27 Adopted Budget increasing special department expenses and decreasing contingency by $83,685 in the Affordable Housing Unit budget. (4/5 vote required)
FUNDING: HCD CDBG Program Income, Recaptured Funds, and Program Income Administrative Funds - 100%.
Body
DISCUSSION / BACKGROUND
The CDBG Program is a federally funded initiative administered at the state level by HCD. Its purpose is to help local governments develop viable communities by providing housing, improving living environments, and expanding economic opportunities, particularly for low- and moderate-income individuals and families.
As part of the Planning and Building Department (Department), Affordable Housing Unit’s (Housing Unit) participation in the CDBG Program, certain activities funded with CDBG dollars are paid back to the County over time. This revenue, known as Program Income, includes funds such as loan repayments, interest repayment, or fees that are directly generated through CDBG-funded projects. Under federal and state regulations, this Program Income must be treated as additional CDBG funding and used only for eligible community development activities. In 2023, the State of California established uniform policies and procedures governing how Program Income is tracked, reported, and reused to ensure compliance with the federal requirements that accompany these funds.
The Housing Unit has accumulated Program Income through previously funded CDBG activities. The Board of Supervisors is being asked to adopt a resolution authorizing the submission of a Program Income application to HCD and approving the use of up to $836,062 in available Program Income for eligible CDBG activities. The current Fiscal Year 2026-27 budget includes appropriations of $752,377. Since the budget was developed, the account balance has increased by $83,685. The department is requesting a budget transfer to increase appropriations by this amount, allowing the County to fully utilize the available funds to support Owner-Occupied Rehabilitation activities. The activity proposed for funding is Single-Unit Residential Rehabilitation (Activity 14A) (Owner-Occupied Rehabilitation), which aligns with the core CDBG objective of providing safe and decent housing for residents-particularly those who meet low- and moderate-income criteria.
If approved, the resolution authorizes the Director of the Department, or an approved designee, to execute the grant agreement, process fund requests, submit required reporting documents, and take all necessary actions to administer the program on behalf of the Housing Unit. This administrative authority allows the County to efficiently implement the rehabilitation program and ensure compliance with state and federal requirements.
Through this action, the Housing Unit reaffirms its commitment to maintaining safe and adequate housing stock and continues its long-standing practice of using federal community development resources responsibly and transparently. Reinvestment of Program Income back into eligible local activities strengthens the County’s ability to serve residents in need while maximizing the impact of funds that originated from prior CDBG investments.
It should be noted that the Housing Unit is requesting to utilize $1,000,000 in Program Income funds; however, of the requested amount, $836,000 is already accounted for in the CDBG County account, and the remaining amount is the projected amount to be used based on the average repayments from the previous four (4) years. Per guidance from HCD, counties are requested to prepare Resolutions with an anticipated amount of funds for approximately three (3) years but can only loan out what is reflected in the County account.
ALTERNATIVES
The Board may choose not to approve and adopt the Resolution. If the Resolution is not adopted, the Department would not have the authority to use the CDBG Program Income, Recaptured Funds, or Program Income Administrative Funds, and these funds would therefore not be available to support the County’s Owner-Occupied Rehabilitation Program. In addition, without approval to expend these funds, the County may be required to return or remit the CDBG Program Income to HCD.
PRIOR BOARD ACTION
N/A
OTHER DEPARTMENT / AGENCY INVOLVEMENT
County Counsel
CAO RECOMMENDATION
Approve as recommended.
FINANCIAL IMPACT
There is no impact to the County’s General Fund. The County will utilize $1,000,000 in CDBG Program Income to fund the Owner-Occupied Rehabilitation Program, an eligible CDBG activity. Program Income is defined as gross revenue generated by the use of CDBG funds (repayment of loans and interest), including revenues earned from utilizing Program Income itself.
The proposed Budget Transfer will amend the Fiscal Year 2026-27 Adopted Budget, increasing special department expenses and decreasing contingency by $83,685 in the Housing Unit budget.
CLERK OF THE BOARD FOLLOW UP ACTIONS
1) The Clerk of the Board will secure the Chair's signature on the original copy of the Resolution.
STRATEGIC PLAN COMPONENT
Safe and Healthy Communities
Priority: Develop a continuum of support and housing opportunities for unhoused individuals
Action Item: Develop a comprehensive plan for affordable housing opportunities
CONTACT
Jennifer Morris, Sr. Administrative Analyst
Planning and Building Department