To: Board of Supervisors of Sonoma County and Board of Commissioners of the Community Development Commission
Department or Agency Name(s): Sonoma County Community Development Commission
Staff Name and Phone Number: Tina Rivera, 565-4774
Vote Requirement: 4/5th
Supervisorial District(s): Countywide
Title:
Title
Homekey Hotel Purchase - Sebastopol Inn
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Recommended Action:
Recommended action
Adopt a budget resolution amending the Community Development Commission’s fiscal year 2020-2021 adopted budget in the amount of $6,200,000 for the receipt of Homekey State funding and expenses associated with the purchase, capital improvements, and operations of the Sebastopol Inn in the amount of $6,200,000. (4/5th Vote Required)
end
Executive Summary:
On August 18, 2020 the Board of Supervisors approved Resolution No. 20-0303 which granted Community Development Commission staff the authority to submit applications to Project Homekey. Staff submitted two applications; one for the Hotel Azura in Santa Rosa and another for the Sebastopol Inn. On November 10, 2020 the Commission provided a report to the Board that noted approval of the Hotel Azura application in the amount of $8,800,000 in capital and acquisition funds and $1,056,000 in operating funds from Project Homekey. The report also noted that the application for the Sebastopol Inn was on the waiting list. The California Department of Housing and Community Development has approved Sonoma County’s Homekey application for the Sebastopol Inn has been for $6,200,000. This funding will be used for the purchase, capital improvements, and operations of the Sebastopol Inn.
This item requests approval of a budget resolution amending the Community Development Commission’s fiscal year 2020-2021 adopted budget to accommodate receipt of Homekey funding and expenses, and identifies the opportunity to revise the use of existing Community Development Block Grant (CDBG) Disaster Relief (DR) Corona Virus (CV), in the amount of $370,000 to support COVID-19 homeless services within the community of Sebastopol.
Discussion:
Project Homekey is administered by the California Department of Housing and Community Development (HCD). A total of $600 million in grant funding has been made available to local public entities to purchase and rehabilitate hotels and motels to provide housing for individuals and families experiencing homelessness or at risk of experiencing homelessness and who are impacted by the COVID-19 pandemic. The program encourages applicants to convert the properties into permanent, long-term housing. The program is highly competitive and oversubscribed; HCD has received $1.1 billion in applications. The deadline for expending capital funds is December 30, 2020 and the deadline for expending Project Homekey operating subsidies is June 30, 2022.
On July 16, 2020 the State of California Department of Housing and Community Development (HCD) announced that it is making $550 million available through a Notice of Funding Availability (NOFA) for the Homekey Program. The Homekey Program is funded with federal Coronavirus Relief Funds (CRF), which must be spent by December 30, 2020. In addition, the state is providing $50 million in General Funds to provide initial operating subsidies under the program, which state must be expend by June 30, 2022. Of the total funding available, $91 million is set aside for Bay Area communities.
Staff submitted two applications by the August 13, 2020 deadline. The first application was to purchase the 44-unit Hotel Azura at 635 Mendocino Avenue and expend an overall total of $16,474,549 in combined Project Homekey and local funds. The application was approved for $8,800,000 in capital and acquisition funds and $1,056,000 in operating funds from Project Homekey.
The Sebastopol Inn is a 2-story motel structure consisting of 31 efficiency hotel rooms, 22 of which have kitchenettes. The application for Project Homekey funding for the Sebastopol Inn was approved in November 2020 in the amount of $6,200,000 for acquisition costs. The total project cost is $10,302,704 including acquisition, development and Project Homekey operating subsidy. As previously described, Project Homekey funding is substantially oversubscribed. The purchase and sale agreement for the Sebastopol Inn is for $6,191,135 which will be funded by Project Homekey dollars.
The 2020 Point in Time Count found that the number of homeless/unsheltered in Sebastopol a city of approximately 7,300 has increased to 129 from 101 in 2019 which marked a year of significance increase in homelessness from 2018 where there were only 60 homeless identified as residing unsheltered in Sebastopol. The Policy Lab at University of California Berkeley found that in West County, high utilizers of government services, supports including homeless services, behavioral health, and human services have a higher level of acuity, and this acuity requires more resources. COVID has amplified the need for safe, non-congregate shelter and housing for our community’s most vulnerable individuals experiencing homelessness, including the growing number of homeless individuals in Sebastopol. Staff has identified the opportunity to direct $370,000 of the Community Development Block Grant Coronavirus (CDBG-CV) grant already received to support COVID-19 homeless services within the community of Sebastopol.
Given the 11/10/2020, Board review of the $2,963,500 and acceptance of the initial allocation of $1,854,341, included description that the use of funds would be to provide rental assistance to tenants and landlords who have been impacted as a direct result of COVID-19, staff will return to the Board with an item to formalize use of funds revisions. The acquisition of the Sebastopol Inn along with the $370,000 CDBG-CV investment will aid the county’s efforts to limit the spread of Coronavirus amongst the county’s unsheltered population.
Prior Board Actions:
November 10, 2020: Board approved execution of purchase and sale agreements for the Hotel Azura at 635 Mendocino Avenue in Santa Rosa and the Sebastopol Inn should project receive state funding.
November 10, 2020: Board accept $4,698,809 in Community Development Block Grant Disaster Recovery (CDBG-DR) funds, to enter into an agreement with the California Department of Housing and Community Development for Administration of CDBG-DR, and to hire a consultant to manage CDBG-DR and CDBG-CV programs.
August 18, 2020: Board adopted Resolution No 20-0303 granting the Interim Executive Director of the Sonoma County Community Development Commission authority to enter into grant agreements with HCD for $16,493,006 and $10,302,704 in 2020-2021 funding for the State’s Homekey Program.
Fiscal Summary
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Expenditures |
FY 20-21 Adopted |
FY 21-22 Projected |
FY 22-23 Projected |
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Budgeted Expenses |
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Additional Appropriation Requested |
6,200,000 |
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Total Expenditures |
6,200,000 |
0 |
0 |
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Funding Sources |
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General Fund/WA GF |
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State/Federal |
6,200,000 |
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Fees/Other |
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Use of Fund Balance |
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Contingencies |
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Total Sources |
6,200,000 |
0 |
0 |
Narrative Explanation of Fiscal Impacts:
The Community Development Commission is requesting revenue and expenditures appropriations in the amount of $6,200,000 by way of a budget resolution. The source of the funding for the revenue appropriation is Homekey Program. The department has identified Community Development Block Grant Coronavirus funding in the amount of $370,000 to support COVID-19 homeless services within the community of Sebastopol, the allocation is within current budget appropriations.
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Staffing Impacts: |
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Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
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Narrative Explanation of Staffing Impacts (If Required):
N/A
Attachments:
Budget Resolution
Related Items “On File” with the Clerk of the Board:
None