HomeMy WebLinkAboutA043 - Motion on Draft FY 2026/27 Proposed Annual Action Plan Projects for CDBG and HOME programsITEM #:43
DATE:03-10-26
DEPT:P&H
SUBJECT:DRAFT FY 2026-27 PROPOSED ANNUAL ACTION PLAN PROJECTS FOR
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME
PROGRAMS
COUNCIL ACTION FORM
BACKGROUND:
As part of the City’s approved 2024-29 Five-Year Community Development Block Grant
(CDBG) and HOME Consolidated Plan, the City must submit an Annual Action Plan that
outlines the proposed activities and budget to be implemented in the upcoming fiscal year.
Those activities should be consistent with the goals and priorities identified in the approved
Consolidated Plan (See Attachment 1).
The activities identified in the Annual Action Plan should address the housing and community
development needs of low- and moderate-income persons as well as the housing and
community development needs of non- low- and moderate-income persons in the community.
The Annual Action Plan can address one or all of the goals and priorities.
HUD guidelines outline the following key steps for Entitlements to review before establishing
programs:
Determine if the proposed activity is included in the list of eligible activities;
Determine if the proposed activity meets the City’s Consolidated Plan priority goals for
addressing the needs of low- and moderate-income persons within the community;
Determine if the proposed activity can meet one or more National Objectives;
Ensure that carrying out the activity will meet HUD’s requirement that 70% of the
grantee’s CDBG expenditures over a three-year period will be on activities that benefit
low- and moderate-income persons; and
Meet the performance measurements requirements (specifically our annual May 2
Timeliness Test for expenditure of current fund balance).
HUD regulations require that Annual Action Plans be submitted for approval within 45 days
before the beginning of the program fiscal year (i.e., for the City of Ames, that would be by
May 17, 2026). It also requires that the Plan be published for 30 days to allow for citizen input
on the proposed project(s) for the utilization of the funds.
The 2026 CDBG and HOME funding allocations for entitlement cities have not yet been
announced, which means that Action Plans cannot be submitted to HUD until the 2026
funding allocations are announced. Therefore, staff has requested an extension to
submit the City’s Plan on or before August 16, 2026, which is the latest statutory
submittal date.
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It is time, nevertheless, to begin the process for determining the 2026-27 Annual Action Plan
Projects. Staff utilized projected funding allocations based upon the past year to draft the
Annual Action Plan. The 2025-26 CDBG Allocation was $552,927 and HOME Allocation was
$278,382.
The delays are not only inconvenient for identifying the funding amount; the delays from HUD
impact the ability to implement projects. The HUD delays do not change the fiscal year starting
point or timeliness test dates, which causes delays in receiving HUD approvals to start
projects and fewer months to actually complete projects by May 2. Therefore, staff believes
that there should be continued emphasis with the Action Plan to implement higher-cost
projects that will:
Assist in meeting our timeliness test requirements,
Meet our 70% LMI benefit requirements,
Can readily receive environmental review approval, and
Can assist us in spending our program income that will be generated as we complete lot
sales within the Baker Subdivision.
Staff is recommending that Council consider the following proposed program activities (see
Attachment II-A for proposed 2026-27 CDBG Projects and II-B for proposed 2026-27 HOME
Projects). The funding is a combination of rollover funds, projected program income,
and the next annual allocation.
CDBG Program (See Attached Budget):
Projects funded with the new annual allocation and projected program income from lot
sales for FY 2026/27 are:
Homebuyer Assistance Program (city-wide) - $326,854
Public Facilities (Non-Profits) Rehabilitation Program (owner-controlled sites, building
and site rehabilitation) - $210,000
Single Family Housing Rehabilitation- $258,021
Property Disposition (Baker, Duff, Grand Properties) - $10,000
Continue in FY 2026/27 the following ongoing FY 2025-26 project activities with the FY
2025/26 Rollover funds:
Public infrastructure Improvements (S 3rd and S Maple) - $541,950*
*Proposed as an amendment to the current 2025-Action Plan as part of separate report on the
same agenda.
The proposed revenue for FY 2026-27 includes the following three sources:
CDBG Revenue of $552,927 based on the 2025-26 allocation;
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Anticipated Program Income: Sale of two remaining Habitat home lots in the Baker
Subdivision ($100,000), along with six market-rate lots in the Baker Subdivision (average
price per lot of $58,861, totaling $353,166); TOTAL $453,166.
Projected 2025-26 rollover balance of approximately $541,950
HOME Program (See Attached Budget):
For the FY 2026-27 HOME Program, staff is recommending to reallocate the prior project and
the funding related to New Single Family Home Construction - $901,585. This proposed
budget would assist in the construction of approximately three of the remaining six affordable
lots in the Baker Subdivision.
No other programs are being proposed for HOME. The proposed revenue for FY 2026-27 is
based on the 2025-26 allocation of $278,382, and the projected 2025-26 rollover balance of
$1,035,038 totaling $1,313,420 which includes $411,835 of administrative and CHDO dollars.
Deducting the administrative and CHDO dollars leaves $901,585 available for programing.
If the 2026-27 CDBG/HOME new allocation amounts are lower or higher than the 2025-26
allocations, staff will adjust all programs down or up equally.
Next Steps:
As in the past, staff is meeting in advance with the Council to review proposed plan
priorities and potential projects prior to conducting forums for further public input.
Having Council set priorities first helps for the public to provide input on these
priorities. Staff believes that focusing on the proposed CDBG/HOME projects for the 2026-27
program year will help make an impact on the need identified within the Consolidated Plan,
while accomplishing program projects that have been adopted in the previous action plans
that have not been completed.
Staff’s rationale for recommending the CDBG and HOME project activities for FY 2026/27
listed above is as follows:
The project activities are consistent with the recently adopted 2024-29 Five-Year
Consolidated Plan goals. The following two barriers were outlined in the 2019
Impediments to Fair Housing Analysis Study. Additionally, the data outlined in the
Comprehensive Housing Affordability Strategy (CHAS) and the American Community
Survey (ACS) information for the City of Ames is consistent with the two needs outlined
above.
The proposed projects are consistent with the City Council’s goals and priorities to focus
on neighborhood sustainability by improving and expanding the housing stock for low-
and moderate-income households and in our vital core neighborhoods.
The proposed implementation sequence for the project activities should help meet
HUD’s timely expenditure requirements.
All of the activities proposed would be of 100% benefit to low- and moderate-income
persons.
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Once the City Council provides direction for the proposed FY 2026-27 Annual Action
Plan projects, staff will proceed with hosting public forums for citizen input and
feedback on March 25. The public feedback will be shared with the City Council for final
project selection to proceed with preparing the 2026-27 Annual Action Plan for the 30-
day public comment period once HUD releases the funding allocations have been
announced.
ALTERNATIVES:
1. Approve the proposed FY 2026-27 Annual Action Plan Program Projects and proposed
budgets in connection with the City’s Community Development Block Grant and HOME
Program, as outlined above, direct staff to proceed with hosting public forums for citizen
input and feedback, and direct staff to request an extension for submitting the Action
Plan as needed.
2. Direct staff to proceed with a modified 2026-27 Annual Action Plan Program Projects
and proposed budgets in connection with the City’s Community Development Block
Grant and HOME Program.
3. Refer this item back to staff with further direction.
CITY MANAGER'S RECOMMENDED ACTION:
The timeframe for the submittal of the FY 2026-27 CDBG and HOME Action Plan for the City
of Ames is typically on or before May 17 each year. Despite the fact that federal allocations
have not been announced at this time, staff needs to begin the process of soliciting public
feedback for proposed projects in the Action Plan projects.
The proposed budget includes a combination of rollover funds, new allocation funds,
and projected program income. Staff believes the proposed project types are
consistent with the Consolidated Plan goals and priorities and are capable of being
administered in a timely manner consistent with HUD requirements, including but not
limited to Annual Action Plan approval, environmental project review, and the
timeliness test. Therefore, it is the recommendation of the City Manager that the City Council
adopt Alternative #1, as described above.
ATTACHMENT(S):
Attachment 1.pdf
CDBG 2026-27 Proposed Budget 3-5-26 PDF.pdf
HOME 2026-27 Proposed Budget 3-5-26 PDF.pdf
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ATTACHMENT 1
2024-29 Strategic Plan Goals and Priorities for
Low and Moderate-Income Persons
1. Utilize and leverage CDBG and HOME Funds through “private, non-profit,
and public” partnerships to create and expand sustainable, affordable
housing for low- and moderate-income households through:
• Increase supply of single-family and/or multi-family housing for ownership in
the Neighborhood Revitalization Strategy Area (NRSA) and citywide;
• Reduce the cost burden for low-income households to access or
maintain rental housing citywide;
• Increase the affordability, quality, density, and availability of owner housing
for homeowners citywide.
2024-29 Strategic Plan Goals and Priorities for
Non-Low and Moderate-Income Persons
1. Utilize and leverage CDBG* and HOME Funds through “private, non-profit,
and public” partnerships to create, sustain, and expand housing for
non-low- and moderate-income households through:
• Integrate affordable and market-rate residential developments;
• Remove blight and deteriorated housing to reuse into new housing;
• Support and address code enforcement of deteriorated housing;
• Remove blight and deteriorated housing in floodplains and other hazardous
areas.
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2026-27 CDBG
Budget Allocation
2026-27 Proposed
Program Income
2025-26 CDBG Anticipated
Budget Rollover
Proposed Program Budget
Totals
552,927$ 453,166$ 541,950$ 1,548,043$
(110,585)$ (90,633)$ -$ (201,218)$
442,342$ 362,533$ 541,950$ 1,346,825$
222,342$ 104,512$ -$ 326,854$
-$ 258,021$ -$ 258,021$
210,000$ -$ -$ 210,000$
10,000$ -$ -$ 10,000$
-$ -$ 541,950$ 541,950$
442,342$ 362,533$ 541,950$ 1,346,825$
Less: Adminstration Cap Program Budget Balance
552,927$ (110,585)$ 442,342$
100,000$ (20,000)$ 80,000$
353,166$ (70,633)$ 282,533$
1,006,093$ (201,218)$ 804,875$
1,349,322$ (64,928)$ 1,284,394$
64,928$ (64,928)$ -$
5,000$ -$ 5,000$
199,795$ -$ 199,795$
497,024$ -$ 497,024$
37,125$ -$ 37,125$
3,500$ -$ 3,500$
-$ -$ -$
541,950$ -$ 541,950$
1,548,043$ (201,218)$ 1,346,825$
*Anticipate Selling 6 of 9 Market Rate Lots During July - October 2026
Public Facilities Rehabilitation Program (Non-Profits)
S. 3rd & S. Maple (Proposed Amendment to 25/26 Action Plan)
S. Riverside
2026-27 PROPOSED Action Plan Expenditure Budget:
2026-2027 Proposed CDBG Projects
Total Allocations
Total Anticipated 2026-27 Allocation Balance
2026-27 Anticipated Program Income (Sale of Two Habitat Houses)
PROPOSED 2026-27 Action Plan Revenue Budget:
Program Totals
Less: CDBG Administration (20% Cap)
Total Allocations for Programming
Single-Family Housing Rehabilitation Program
Homebuyer Assistance Program
Disposition of Properties (1107 Grand, 621 Grand, 1514 Duff, Baker Subdivision)
Total Anticipated 2026-27 CDBG Balance
Public Infrastructure Improvements (Water System Improvement-S. 3rd & S. Maple)
2026-27 CDBG Allocation (Based on 2025-26 Allocation)
2026-27 Anticipated Program Income (Sale of Six Market Rate Lots, Avg Sale Price $58,861)*
2025-26 Anticipated Rollover Balance
2025-26 Remaining Total Balance (As of 3-3-26)
General Administration
Geothermal Modifications (Modus Engineering)
S. Russell
Disposition of Properties
2025-26 Remaining Total Expenses (As of 3-3-26):
Renter Affordability
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2026-27 HOME
Budget Allocation
2026-27 HOME Anticipated
Budget Rollover
Proposed HOME Program
Budget Totals
278,382$ 1,035,038$ 1,313,420$
(27,838)$ (152,920)$ (180,758)$
(41,757)$ (189,320)$ (231,077)$
208,787$ 692,798$ 901,585$
208,787$ 692,798$ 901,585$
208,787$ 692,798$ 901,585$
Less Admin Cap & CHDO Program Budget Balance
278,382$ (69,595)$ 208,787$
278,382$ (69,595)$ 208,787$
1,269,492$ (342,240)$ 927,252$
(234,454)$ -$ (234,454)$
1,035,038$ (342,240)$ 692,798$
1,313,420$ (411,835)$ 901,585$
Program Totals
Less: CHDO (15%)
New Single Family Home Construction
PROPOSED HOME 2026-27 Action Plan Expenditure Budget:
2026-2027 Proposed HOME Projects
Total Allocations
Total Allocations for Programming
Less: HOME Administration (10% Cap)
Total Anticipated 2026-27 HOME Balance
PROPOSED 2026-27 Action Plan Revenue Budget:
2024-25 Estimated Remaining Expenses
Total Anticipated 2025-26 Allocation Balance
2026-27 HOME Allocation (Actual Allocation)
2026-27 Anticipated Rollover Balance
2024-25 Remaining Total Balance
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