PURPOSE

This resolution requests the City Council to approve capital project uses funded with CDBG and include them in the FY 2006-07 Annual Plan and Final Statement of Community Development Objectives and Projected Use of Funds.

BACKGROUND

Burbank submits an Annual Plan and applications for federal funds, including CDBG, pursuant to regulations dated January 5, 1995, covering 24 Code of Federal Regulations Part 91, Consolidated Submissions for Community Planning and Development Programs.  Both the Annual Plan and the Final Statement describe activities/projects planned to accomplish goals and objectives stated in the Consolidated Plan (FY 2003-08).  Activities eligible under the CDBG program must principally benefit persons of low and moderate income, aid in the prevention or elimination of slums and blight, or address community development needs having a particular urgency.  For Burbank, CDBG funds are used for capital improvement projects, public services and program administration.

The Annual Plan and Final Statement of Community Development Objectives and Projected Use of Funds are scheduled for formal submission in May 2006.  Capital project requests are accepted earlier for City approval to allow sufficient lead time to complete pre-development tasks such as project design, preparation of specifications and bid scheduling.  This advanced implementation process permits projects to go forward immediately when federal applications are approved and funds are budgeted by the U.S. Department of Housing & Urban Development (HUD).

ANALYSIS

Burbank�s CDBG entitlement allocation for FY 2006-07 is estimated at $1,350,501 based on the entitlement and HUD reallocated funds for 2005, but is likely to be less since current news from Congress predicts CDBG formula grants will be $3.75 billion nationwide, representing a $400 million decrease compared with 2005. When the Annual Plan and Final Statement are approved in April 2006, capital project approvals will be adjusted to coincide with the actual 2006 entitlement and any HUD reallocated funds. For now, however, CDBG capital project funds are estimated at $965,259. Similarly, program administration and public services funding will be adjusted in April and will be appropriated at the statutory limits of 20 percent and 15 percent, respectively.

FY 2006 CDBG FUND RESOURCES

FY 2006 CDBG FUNDS By CATEGORY

Capital project fund availability and a request for proposals were noticed to departments/agencies on September 26, 2005 and advertised October 1 and 5, with proposals accepted until October 28, 2005.  Three City departments/organizations submitted eight projects totaling $1.32 million in requests, creating a gap of $359,192 compared with available funding (Exhibit A).  For specific proposals, additional information is provided as follows:

Public Works:

1.       The Department�s 2006 proposals are identical with 2005 when City Council      approved $505,148 for use by Public Works, which opted to improve Olive     Avenue between Third and Sixth Streets. However, when 2005 funds were released      by HUD and projects were funded in the federal Integrated Disbursements and        Information System (IDIS), fund availability was insufficient to fully fund Olive          Avenue at $505,148, and was therefore funded at $210,523.

Based on increased material costs, Public Works now estimates the project at approximately $700,000. To meet this new projected cost, staff proposes the following:

2.       Related to the pending City project to construct a new Community Services         Building (CSB), Public Works proposes to provide off-site pedestrian and access        improvements. A project cost of $390,000 includes the demolition and     replacement of existing curbs, gutters, sidewalks, and driveways with new/wider sidewalks, curbs, gutters, ADA pedestrian ramps, a mid-block street crossing, and a     vehicle turn-out.

Build Rehabilitation Industries:

In prior years, Build was awarded CDBG funding to renovate two bathrooms to meet ADA accessibility provisions; install seismic retrofitting; install a new central heating/air conditioning system; and a new roof. In total $91,000 was approved by City Council over a two-year period.

Although Build went out for competitive bids on two separate occasions, the lowest bid exceeded funds available each time. To expedite the completion of these projects, the City approved use of CDBG funds approved for 2005-06 ($78,000) to fill the gap.

Consequently, projects approved for 2005 (Lighting System, Fire Sprinkler System and New Training Rooms) appear again for 2006. [$15,000 remains from funds approved last year. If $84,000 is approved for 2006, there will be a total of $99,000 available to complete the proposed projects].  

Community Development Goals Committee

The Goals Committee met on November 17, 2005, to review proposals and make recommendations.  The Committee�s long-standing rationale for project approvals has been predicated on creating a direct/visual impact, benefiting the appropriate citizenry, or providing funds where resources are limited or non-existent.

Code Enforcement: Based on survey information compiled last year regarding how other localities use/approve CDBG funds for code enforcement activities; and HUD audit confirmation that Burbank�s code enforcement program is in compliance with HUD regulations, the Committee acknowledges the eligibility of code enforcement, but in majority, opposes the use of CDBG to pay for staffing when other priority projects exist that require funds.

Notwithstanding, since this year�s requests are limited to two City departments and one local organization (Build Rehabilitation Industries), which can be fully funded, the Committee recommends that all proposals be fully funded except for Public Works� street improvements, alley/sidewalk and pedestrian ramp construction, which is recommended at $355,808 to be used at the Department�s discretion.

Executive Staff

Executive Staff met on December 7, 2005 to review proposals and finalize their recommendation, which concurs with the recommendation of the CD Goals Committee with one stipulation.

City Council consideration for funding the Community Services Building will not take place until April 2006. Should funding be approved for CSB, concerns may still exist relevant to traffic congestion caused by narrowing Third Street to accommodate improvements and pedestrian safety related to creating a mid-block street crossing. Therefore, Executive Staff recommends that if CSB off-site improvements are approved for $390,000, that the funds be held in abeyance until all issues/concerns are settled. If CSB project funds are not approved, the $390,000 can be utilized for other Public Works projects that are CDBG eligible.

All projects as recommended by the Community Development Goals Committee and the Executive Staff are reflected on Exhibit A, CDBG Capital Projects (Fiscal Year 2006-07).

FISCAL IMPACT

CDBG funds are estimated to total $1.48 million, which is approximately $325,000 (18%) less than 2005 due to a decrease in Program Income. Additionally, based on projected CDBG fund and entitlement reductions nationwide, it is likely that capital project approvals ($965,259) will have to be reduced in April 2006 when federal applications are finalized for submission to HUD.

RECOMMENDATION

Staff recommends that the City Council adopt the proposed resolution.

Enclosures:

▪ Exhibit A � CDBG Capital Projects (FY 2005-06)

▪ Exhibit B � Community Development Goals Committee � Draft Minutes (11/17/05)

▪ CBBG Capital Project Proposals (2006-07)

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