COMMUNITY DEVELOPMENT BLOCK GRANT
(CDBG) PROGRAM

The City of Paso Robles annually receives about $335,000 in CDBG funds. This includes about $285,000 in funds received directly from the U.S. Department of Housing and Urban Development (HUD) and an average of $50,000 in funds from repaid CDBG-funded residential rehabilitation loans that were made between 1988 and 1994.

The CDBG (Community Development Block Grant) Program is closely regulated by an array of detailed federal regulations. Some of the most important provisions among these regulations are as follows:

• A requirement that no less than 70% of each year’s allotment of CDBG funds be used for projects or programs that benefit low income persons (from households earning 80% or less of the County’s Median Income);
• A provision that the City may use up to 30% of each year’s allotment of CDBG funds for projects that “eliminate blight”;
•  Limitations on the types of projects or programs that may be undertaken with CDBG funds;
•  A limitation restricting the amount of CDBG funds spent on public services to no more than 15% of the City’s annual allotment;
• Restrictions against using CDBG funds to pay for projects or programs that have already been initiated;
•  Requirements that CDBG-funded projects be completed in a timely manner (generally within 1.5 years of their award);
•  Requirements to comply with federal environmental laws, labor laws (prevailing wages), and procurement regulations.

Eligible Projects and Programs

The following is a brief list of the most common eligible uses of CDBG funds. It is not a complete list. A complete list can be found in Sections 24 CFR 570.201, 202, and 203 of the Code of Federal Regulations, a copy of which can be obtained either from the Housing Programs Office or this link to the GPO website.

• Acquisition of property for public facilities or for housing restricted to low income persons;
•  Construction of street improvements for public facilities or for housing that is restricted to low income persons;
•  Construction or rehabilitation of public and quasi-public buildings and facilities;
•  Operations of public services (but not for paying for the cost of on-going governmental services);
•  Rehabilitation of commercial buildings provided that the work done is limited to renovation of the exterior or to correct a building code violation.

Per Sections 24 CFR 570.200 and 570.207 of federal regulations, CDBG funds may not be used for the following:

• Payment of development impact fees for buildings;
•  Construction costs for new housing (that’s what HOME funds are for);
•  Construction or rehabilitation of buildings used for general government purposes (CDBG funds may be used for other public facilities);
•  Maintenance of streets and other public facilities.

Consolidated Plan

Federal regulations governing the CDBG, Home Investment Partnership Act (HOME) and Emergency Shelter Grant (ESG) Programs require that recipients prepare a five-year “Consolidated Plan.” The purpose of the Consolidated Plan is to identify the recipients’ greatest housing and community development needs, to establish strategies priorities for using federal funds to meet these needs, and to set forth annual action plans to best use these funds to meet these strategies and priorities.

HOME and ESG funds will be briefly discussed in the “Programs and Funding” Section. For these federal funding programs, the City of Paso Robles is a member of an organization classified by HUD as an “urban county.” This organization operates under a three-year “Cooperation Agreement” among the County of San Luis Obispo, the City of Paso Robles, and other participating cities in the County.

Under the Cooperation Agreement, the County prepares the Consolidated Plan (with participation by the cities), acts as the direct recipient for CDBG, HOME, and ESG funds. Also under the Cooperation Agreement, the City of Paso Robles is guaranteed a certain annual percentage of CDBG funds allotted to the County, based on a formula that considers population and income profiles.

Percentages of HOME and ESG funds are not allotted to each of the participating jurisdictions. However, the County and the participating cities agree to cooperate in determining how HOME and ESG funds will be allocated on an annual basis.

The 2005 Consolidated Plan lists the following strategies and priorities for use of CDBG, HOME and ESG funds:

Affordable Housing Strategy

Priority #1: Increase availability of affordable and decent rental housing for low- and moderate-income households.

Priority #2: Increase first-time home ownership opportunities for low- and moderate-income households.

Priority #3: Maintain and upgrade existing neighborhoods and housing units occupied by low-income households.

NOTE: The federal definition of low and moderate income (80% or less of County Median Income) applies to all of the above.

Addressing Homelessness

Priority #1: Provide needed emergency shelter facilities and related services.

Priority #2: Prevent homelessness by enabling people to obtain or retain decent affordable housing and supportive services.  

Economic Development Strategy

Priority #1: Provide businesses the technical assistance to enable micro-enterprises to create and/or retain jobs.

Priority #2: Provide financial assistance to existing small businesses for expansion and to start-up businesses.

Public Facilities and Services Strategy

Priority #1: Provide assistance to communities and neighborhoods that consist primarily of low- and moderate income persons and cannot afford necessary public facilities or services.

NOTE: The federal definition of low and moderate income (80% or less of County Median Income) applies to this priority.

Annual CDBG Application Cycle

Late August A Request for Proposals are published and distributed to persons/organizations on County’s mailing list.

Early October  Applications must be submitted to the City’s Housing Division and/or the County Planning Department. Applications received after the deadline date indicated on the Request for Proposals will not be considered by the City of Paso Robles.

September/October  The County of San Luis Obispo conducts several public “needs” hearings at various locations throughout the County, including one in the North County, either at the Paso Robles Library or at Atascadero City Hall. The purpose of these hearings is to receive public comments regarding what is perceived to be the greatest housing and community development needs for the County and those cities participating in the CDBG program.

November/December  Paso Robles’ City Council reviews the CDBG applications received and makes a recommendation as to which applications should be listed in the DRAFT Annual Action Plan (prepared by the County). The City Council makes such recommendations to form the basis for future discussion, and the recommendations are not to be considered final funding decisions.

December The County of San Luis Obispo publishes the DRAFT Annual Action Plan to begin a public review period that is at least 30 days.

January The County of San Luis Obispo conducts several public workshops at various locations throughout the County, including one either at Paso Robles Library or at Atascadero City Hall. The purpose of these workshops is to explain and receive public comments on the Draft Annual Action Plan.

Early February  The City Council conducts a public hearing on the City’s portion of the Annual Action Plan and makes a final decision about which CDBG applications will be funded in the coming year. At this hearing, the City Council also makes a recommendation to the County Board of Supervisors regarding which applications for HOME and ESG funds should be approved.

March The County Board of Supervisors conducts a public hearing on the County-wide Annual Action Plan.

May  The County submits the Annual Action Plan to HUD for its review and approval.

July-August  HUD approves the Annual Action Plan.

Sept-October  CDBG funds become available for use.

It should be noted that CDBG funds may not be obligated via contract or other method of purchase, nor may they be released for a particular project or program until the following have occurred:

• HUD has executed a grant agreement with the County.
• The City and County have executed a Subrecipient Agreement for each year’s allotment of CDBG funds.
• The City has executed a Subrecipient Agreement with those organizations that requested CDBG funds
• The City has completed appropriate federal and state environmental review documents.