HomeMy WebLinkAboutA001 - Council Action Form dated March 10, 2026ITEM #:44
DATE:03-10-26
DEPT:P&H
SUBJECT:SUBSTANTIAL AMENDMENT TO THE CITY'S 2025/26 COMMUNITY
DEVELOPMENT BLOCK GRANT (CDBG) ANNUAL ACTION PLAN
COUNCIL ACTION FORM
BACKGROUND:
As part of the creation of the proposed FY 2026-27 Annual Action Plan, City staff evaluated
how planned projects can be accomplished within HUD timelines for receiving funding and
expenditures that will meet the timeliness test.
In discussions with the Public Works Department, it was discovered that an opportunity
became available where CDBG funds could be used to provide additional public infrastructure
improvements (removal of water mains and replacement of water lines (including lead
services) in HUD-designated Low and Moderate Income Census #10 (see attached map).
The proposed project is consistent with the current Public Infrastructure program of the
Action Plan, but the actual project and its funding is not identified in the current Plan.
Although the project could be included with the upcoming proposed FY 2026-27 Annual
Action, it would be difficult to accomplish the project next fiscal year if it is not started
this summer before the next Plan is likely to be approved due to delays in funding
announcements by HUD.
Census Tract 10 Includes the Oak Riverside Neighborhood, which is one of the city’s older
core neighborhoods. The tract has 4-inch water mains that are aged and deteriorating, along
with a high number of homes with lead services from the main to the house. There has also
been a high number of water main breaks in this tract, which have left residents without water,
with low water pressure, and with rusty water quality. The City has recently completed multiple
blocks of water main replacements in this area.
CDBG funds would be used to replace the old 4-inch mains with new 8-inch mains and to
install new water service with copper piping along S. 3rd Street (between S Russell and S
Oak), and along S Maple (from Lincoln Way to S 4th Street). This project will improve water
quality, reduce lead services, and increase firefighting service capacity in this tract, and
benefit a HUD-identified LMI population. This project is currently outlined as a FY 2027-28
project in the 2026-31 Capital Improvement Plan.
The area has been previously reviewed by a Phase I Historic Architectural Survey that
includes these two streets, which should make it simpler to receive project approval from the
State Historic Preservation Office (SHPO) in a timely manner.
This proposed project is an eligible activi ty under our CDBG program. However, since this
specific project is not listed in our adopted 2025-26 Action Plan activities, it will require a
"substantial" amendment approval from HUD to be added. The estimated cost is
approximately $541,950.
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To facilitate the amendment, staff is proposing to change funding of existing activities that will
not be fully implemented in the next three months to fund the additional water main project.
This includes modifying the First Time Homebuyer, Public Facilities for Non-Profits, Single
Family Rehab, and Sidewalk Rehab. However, the First Time Homebuyer, Public Facilities for
Non-Profits, and Single Family Rehab activities are proposed for the upcoming FY 2026-27
when new funding will be available. Attachment 1 shows the proposed amended program
budget for the 2025-26 Action Plan program activities.
A substantial amendment to the Action Plan requires a 30-day public comment period and a
public hearing at the City Council before it can be submitted as an additional activity to the
HUD Field Office. Staff would anticipate moving quickly to complete the amendment and start
the public comment and public hearing process in order to facilitate the project starting this
summer.
ALTERNATIVES:
1. Direct staff to proceed with amending the 2025-26 CDBG Annual Action Plan with the
proposed projects as outlined in Attachment 1 and set a date of public hearing for April
14, 2026.
2. Direct staff to proceed with amending the 2025-26 CDBG Annual Action Plan with the
proposed projects as outlined in Attachment 1, and set a date of public hearing for April
14, 2026, with modifications.
3. Reject the 2025-26 CDBG Annual Action Plan with the proposed projects as outlined in
Attachment 1 and refer this item back to staff for further information.
CITY MANAGER'S RECOMMENDED ACTION:
Staff’s rationale for adding the additional water main improvements project in LMI Census
Tract 10 as additional project activity is as follows:
The proposed project is located in a vital core neighborhood that is located in an LMI
census tract where the public utilities are in very poor condition, and therefore is
consistent with the goals and priorities in our 2024-29 Consolidated Plan to benefit low-
income residents in the community positively.
The activity will continue to meet the City Council’s goals of strengthening our
neighborhoods.
Continues the investment in improving both the housing stock and the infrastructure
needs of vital core neighborhoods.
The proposed project would result in the City’s ability to meet HUD’s 2026-27 timely
expenditure requirements, as more lots would be sold in the Baker Subdivision, and
allow for a quicker turnaround for program income expenditures.
Therefore, it is the recommendation of the City Manager that the City Council adopt
Alternative #1.
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ATTACHMENT(S):
CDBG 2025-26 Budget AMENDED.pdf
Comparison of 2025-26 Activities with Changes.pdf
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2025-26 CDBG
Budget Allocation
2025-26 Proposed
Program Income
2025-26 CDBG Anticipated
Budget Rollover
Proposed Program Budget
Totals
552,927$ 527,826$ 1,290,907$ 2,371,660$
(110,585)$ (30,675)$ -$ (141,260)$
442,342$ 497,151$ 1,290,907$ 2,230,400$
80,118$ -$ -$ 80,118$
-$ 204,512$ -$ 204,512$
351,693$ -$ 190,257$ 541,950$
-$ -$ 15,824$ 15,824$
-$ -$ 18,825$ 18,825$
10,531$ 292,639$ 1,056,001$ 1,359,171$
-$ -$ 10,000$ 10,000$
442,342$ 497,151$ 1,290,907$ 2,230,400$
Less: Adminstration Cap Program Budget Balance
552,927$ (110,585)$ 442,342$
153,051$ (30,675)$ 122,376$
374,775$ -$ 374,775$
1,080,753$ (141,260)$ 939,493$
1,290,907$ -$ 1,290,907$
1,290,907$ -$ 1,290,907$
2,371,660$ (141,260)$ 2,230,399$
*Anticipate Selling 5 of 11 Market Rate Lots During July - October 2025
Homebuyer Assistance Program
Disposition of Properties (1107 Grand, 621 Grand, 1514 Duff, Baker Subdivision)
Public Infrastructure Improvements (Water System Improvements - S. 3rd & S. Maple)
Public Infrastructure Improvements (Water System Improvements - S. Riverside & S. Russell)
Public Infrastructure Improvements (Water System Improvements - N. Russell)
Public Facilities Improvements Program (Baker Pocket Park)
Total Anticipated 2025-26 CDBG Balance
2025-26 CDBG Allocation (Actual Allocation)
2025-26 Anticipated Program Income (Sale of Five Market Rate Lots, Avg Sale Price $74,955)*
2025-26 Anticipated Rollover Balance
2024-25 Estimated Remaining Expenses
2024-25 Remaining Total Balance
-$ -$ -$ (N/A)
2025-26 Action Plan Expenditure Budget:
2025-2026 Proposed CDBG Projects
Total Allocations
Total Anticipated 2025-26 Allocation Balance
2025-26 Anticipated Program Income (Sale of Three Habitat Houses)
PROPOSED 2025-26 Action Plan Revenue Budget:
Program Totals
Less: CDBG Administration (20% Cap)
Total Allocations for Programming
Renter Affordability Program (15% Cap)
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A B C D E F G H
Original
Funding Net Change
Amended
Funding
125,755 12,454 138,209
234,000 (29,488) 204,512
248,000 (248,000) -
67,748 (67,748) -
154,513 (154,513) -
1,408,826 (49,655) 1,359,171
15,000 (5,000) 10,000
- 541,950 541,950 Proposed New Project
*Modification of funding unrelated to proposed S 3rd and S Maple Project
2025-2026 CDBG Projects Proposed Net Changes
CDBG Administration *
Public Infrastructure Improvements (Water System Improvements - S. Riverside & S. Russell)
Disposition of Properties (1107 Grand, 621 Grand, 1514 Duff, Baker Subdivision)
Public Infrastructure Improvements (Water System Improvements - S. 3rd & S. Maple)
Homebuyer Assistance Program
Single-Family Housing Rehabilitation Program
Public Infrastructure Improvements - Sidewalk Programs
Public Facilities Rehabilitation Program (Non-Profits)
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