National City Council heard how the city intends to spend an estimated $744,200 in federal Community Development Block Grant funding along with $470,687 in federal HOME Investment Partnerships Program entitlement funds for 2022-23 during a May 3 meeting.
The CDBG program, federally funded by the Department of Housing and Urban Development, provides annual grants to develop housing and expand economic opportunities in urban communities for low and moderate-income residents.
The HOME Investment Partnerships Program, also federally funded, specifically provides grants to state and local governments to create affordable housing for low-income households.
Together, the CDBG and HOME funds represent a combined amount of federal dollars available for National City to improve public services and community development.
In 2021, city councilmember Mona Rios said the funding appears to have slowly diminished over the past decade with slightly less available to the city each year. That pattern apparently held true again this year.
This year, if HUD allotments are received as anticipated, the city will garner about $40,000 less in CDBG funds and about $46,000 less in HOME funds— that leaves staff with less to allocate toward the community.
Housing Programs Manager Angelita Palma said the estimated funding recommendations were approved by City Council on March 15 at the first of two public hearings. There has since been a 30-day public review period.
Out of the HOME funding, $374,373 is slated for use on affordable housing projects by the housing authority along with an additional $49,245 in set-aside funds, and 47,069 to be used on HOME program administration.
Items the CDBG funding will be used for include $108,840 for program administration by the housing authority along with another $6,500 in set-aside funding, and $40,000 for CSA San Diego County. CSA San Diego County is a nonprofit organization which promotes and enforces fair housing laws and equal housing opportunities.
The majority of the CDBG funds, $588,862 will go toward paying off the fire station loan.
Councilmember Mona Rios asked for clarification on paying off that loan as the payment is over $30,000 more than was paid last year for the same loan.
“There was almost $32,000 added to that amount and I wonder if that speeds up the payoff date, or if that will still happen in fiscal year 2024,” Rios asked.
The city, Palma explained, refinanced the loan “a number of years ago” and expects to pay off the loan entirely in fiscal year 2023-24.
Housing Authority Director Carlos Aguirre clarified: when the loan was refinanced about five years ago, the length of the loan was not shortened but it freed up dollars to spend on other projects.
“We got an average of about $100,000 extra dollars per year to spend on CDBG activities for the life of the loan. It didn’t recalc the time period, it just reduced the amount of liability over time,” Aguirre said.
After HUD releases the final recommendations, staff will make the necessary adjustments to CDBG and HOME allocations, Palma said.
“Staff will then submit the annual action plan to HUD and will return to ratify the final entitlements and appropriations at the next available city council meeting,” Palma said.
