Each year the City of Sunnyvale must submit an Action Plan to the U.S. Department of Housing and Urban Development (HUD) in order to receive its entitled funds under the Community Development Block Grant Program (CDBG) and the HOME Program. This report submits to the City Council for its approval the proposed Action Plan of 2003-04.

On November 28, 1990 President Bush signed the Cranston/Gonzales National Affordable Housing Act of 1990 which reaffirmed the national commitment to provide decent, safe, and sanitary housing for all Americans.

Housing and Community Revitalization Sub-element:

Policy 2.3C.1d.: The City should encourage and assist non-profit housing organizations to develop 100 new low and very low income rental units within the City over the next five years.

In 1981 the Council adopted the Human Services and Outside Group Funding Policies in recognition of the need for community services in the City, which are not directly provided by the City or other public agencies. The Outside Group Funding Policy provides guidelines for addressing funding requests for outside agencies seeking City funding support.

The Action Plan for 2003/04 includes a discussion of the funds from all sources that will be expended in Sunnyvale for affordable housing and support services in the next year. The full Action Plan, as it will be submitted to HUD, is appended as Attachment B. The City will have a total of $2,048,000 in CDBG funds for Fiscal Year 2003/04. This represents $1,548,000 in new grant funds and $500,000 in anticipated program income to be received on housing rehabilitation loans.

The City will have a total of $1,216,016 in HOME funds for Fiscal Year 2003/04. This represents $777,829 in new HOME funds and program income of $438,187, which is to be used primarily to expand the supply of low-income rental housing. HOME funds will be used for acquisition and new construction by non-profit housing development organizations.

The Action Plan provides a listing of all the activities to be undertaken during the program year. These include rehabilitation of single and multi-family homes, the home access program, improvements to sidewalks for ADA accessibility, housing and neighborhood improvement activities described in the Community Development Strategy, and the support facilities and services that are provided by outside groups.

CDBG funds have increased by 13.5% or $184,000 this year. HOME funds have increased by 26% or $160,829. These increases have occurred due to recalculations of the allocation formulas utilizing 2000 Census data. A total of $299,000 is recommended for outside agencies in 2003/04, compared to $265,769 in 2002/03.

2003/04 is the first year of a two-year funding cycle to provide funding to human service agencies. This year, the City received funding proposals from 14 non-profit service agencies, including two agencies that currently do not receive City funding. Two proposals for capital projects were received during this process. The first was submitted by Christian Church Homes, for $1,450,000 of CDBG, HOME and City Housing funds to support the acquisition of Plaza de las Flores, 233 Carroll Street. The acquisition will prevent the conversion of 100 units of affordable senior rental housing to market rate rentals and preserve the affordability of the units for 40 years. The second was submitted by Emergency Housing Consortium (EHC), requesting $50,000 towards the costs of relocation, rehabilitation and renovation of the historic Greeninger house. The facility will provide a service center for runaway and homeless youth in downtown San Jose.

During their January and February meetings, the Housing and Human Services Commission (HHSC) reviewed the performance of each human service agency for FY2001-02 and the current year from July 2002 to January 2003. Presentations were made by all of the outside human service groups requesting funding. During the March meeting the HHSC made funding recommendations, based upon the requests of the agencies, their performance record and the amount of funds available for the 03/04 program year.

The Commission unanimously approved the total loan requested by Christian Church Homes (CCH), a nonprofit corporation, of $1,450,000 for the acquisition of Plaza de las Flores, a senior affordable rental project. The total federal funds presently available for the project are $973,312 (consisting of $100,021 of CDBG funds and a total $873,291 of HOME funds, which includes $145,551 of 02/03PY funding). The balance of approximately $476,688 was recommended to be funded from the City Housing Fund. The request by Christian Church Homes for these funds will be submitted to Council at a later date. Prior to Council consideration of the request, staff, the agency, and CalHFA will complete negotiations of loan terms for all funds to be contributed to the project.

The Commission did not recommend funding of the Emergency Housing Consortium proposal for "House Shelter and Services for Homeless and Runaway Youth" during the 03/04 program year. The Commission supports and would like a progress report on the project, but is not recommending nor committing funds to the project at this time. Staff concurs with the funding recommendations of the Housing and Human Services Commission.

This staff report provides additional information on the Request For Proposals process for fair housing services and landlord/tenant dispute resolution and the recommendation for a provider for both services.

Federal regulations specify that the City must "affirmatively further fair housing" in order to be eligible to receive CDBG and HOME funds. The City must report to HUD each year on the activities that have been undertaken to comply with this requirement. The City is required to report on the progress made towards implementing the actions identified in the City’s Analysis of Impediments to Fair Housing Choice (AI). Funding of a fair housing agency to provide fair housing services (consisting of fair housing education, outreach, counseling, and case investigation) is, therefore, necessary in order for the City to comply with the requirement of affirmatively furthering fair housing.

As part of its review of its fair housing activities, the City completed a reassessment of its contracts for delivery of fair housing services and landlord tenant dispute resolution. In the past, the non-profit fair housing service provider submitted the same application as the other outside group human service agencies. The review and selection occurred in the same manner as the other human service agency providers. However, without competition and without a specific RFP process for this service, there is no way to determine the appropriate level of funding that is needed and no way to insure that comprehensive services are provided to Sunnyvale residents.

In January 2003, a study of Fair Housing conditions and services in Santa Clara County was published. Sunnyvale, the other entitlement cities and the County of Santa Clara funded the study. The study recommended strengthening fair housing services through more regional and sub-regional collaboration. A regional fair housing service provider was seen as a means to reduce project costs by eliminating duplication of services and reducing overhead expenditures. Sunnyvale’s AI, approved by Council on February 4, 2003, recognized the value of revising its contracts for the delivery of fair housing services. The AI included recommendations for collaborative efforts with Palo Alto and Mountain View and included additional actions to be undertaken by a fair housing service agency.

Staffs from the Cities of Sunnyvale, Palo Alto and Mountain View have carried out a joint Request for Proposals (RFP) process in an effort to secure the services of a single fair housing agency for the three cities. During February and March, staff initiated a competitive bidding process, which consolidated and refined the services to be provided in each of the cities with the goal to obtain coordinated, cost effective services for each of the cities. The outcome would be to obtain the highest level of comprehensive services throughout the north county region. Each city jointly contributed to both the mailing and newspaper advertisements. The RFP was made available on Sunnyvale’s website. The RFP described the criteria for evaluating the proposals, and the criteria were given points and weighting in an evaluation matrix format. A pre-proposal meeting was held in the Mountain View City Hall. Two proposals were submitted by the deadline of March 17, 2003. Proposals were submitted by Project Sentinel and by Midpeninsula Citizens For Fair Housing (MCFH) in collaboration with Eden Council for Hope and Opportunity (ECHO), a fair housing agency based in Hayward.

Staffs representing the three cities jointly prepared additional evaluation criteria and interview questions, and conducted interviews with each agency on March 21. Each city's staff completed evaluation and rating of each proposer from the knowledge gained in the interviews as well as the written proposals.

The proposal from Project Sentinel was rated substantially above MCFH in the Fair Housing component and in the provision of Landlord/Tenant Dispute Resolution Services. Staff recommends that Project Sentinel is awarded a contract for $30,000 of CDBG funds to provide Fair Housing Services and $3,000 to provide Community Issues and Neighbor Dispute services during the first year of a two-year funding cycle. Project Sentinel is an established fair housing agency, with offices in Sunnyvale and Palo Alto, and provides fair housing and landlord/tenant dispute resolution services for numerous cities in the County. Staff is recommending Project Sentinel because the agency has a strong record in effective community outreach, provides educational materials in nine languages, has a dedicated system that provides them with the capacity to handle phone calls in numerous languages and maintains an updated, well developed web site. Project Sentinel’s proposal was responsive to the proposal requests, well developed and offered creative and innovation responses and actions to address community needs. Although cost is not the overriding factor for this recommendation, the per hour cost of service was 13% below the MCFH proposal. Overall, however, there is little cost differential between the two proposals. The costs provided in the proposals are based on the assumption that all three cities (Sunnyvale, Mountain View and Palo Alto) will be contracting with the same agency. This will allow additional actions to be undertaken from the benefit of cost efficiencies realized from a regional service provider.

Action by the City Council on May 6, 2003 is limited to allocation of the federal funding. However, a proposal for the provision of Landlord/Tenant Dispute Resolution Services was included and evaluated as part of this combined RFP process. This service has been funded through the City’s General Fund. City Council will determine the amount of General Fund support available for this service. Upon completion of the 2003/04 budget process, staff will present a recommendation that Council consider a contract award (not to exceed $99,000, the amount of the bid) for Project Sentinel to provide Landlord/Tenant Dispute Resolution Services.

Preservation of "at risk" units

ADA Sidewalks

Consolidated Plan

Approval of the Action Plan will not generate any new General Fund fiscal commitments. Without an approved Action Plan the City would lose federal entitlement program monies. Within the CDBG program regulations, there are two categories which have maximum spending limits attached to them. These are in the administrative category which can be a maximum of 20% of the grant plus projected program income, and the social service funding which can be a maximum of 15% of the grant plus prior year program income. The proposed Action Plan complies with both of these limits.

The Consolidated Plan regulations require that the residents of Sunnyvale be provided information on the types of affordable housing activities that will be financed with HUD funds. The rules specify a 30-day public comment period. A public notice was printed in the Sunnyvale Sun newspaper on April 2, 2003 indicating the start of a review and comment period. A draft copy of the Action Plan was made available for public review at the One Stop Counter at City Hall and at Sunnyvale Library.

Part of the public comment includes a review by the Housing and Human Services Commission (HHSC). The HHSC held meetings in January, February and March to review the outside group applications, to hear presentations by all agencies, and to finalize funding recommendations. The HHSC reviewed the Action Plan of the Consolidated Plan at its meeting on April 23, 2003 and considered staff recommendations concerning Fair Housing Services and Landlord Tenant Dispute Resolution. Attachment B includes the minutes of the HHSC for the March 26 meeting and the draft minutes of the April 23 meeting.

Prepared by:
Annabel Yurutucu
Housing Officer

1. FY 2003 Annual Action Plan – Update to the City of Sunnyvale Consolidated Plan 2000-2005.
   
2. February 26, 2003, March 26, 2003 minutes and April 23, 2003 draft minutes of the Housing and Human Services Commission.
   
3. Application Summaries-CDBG/HOME Funding Proposals 2003-04 Program Year.