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20-0707_ORANGE, COUNTY OF_Agenda Report_E12City of San Juan Capistrano Agenda Report TO: Honorable Mayor and Members of the City Council FROM: Benjamin Siegel, City Manager SUBMITTED BY: Joel Rojas, Development Services Director PREPARED BY: Laura Stokes, Housing Supervisor / Associate Planner DATE: July 7, 2020 SUBJECT: Cooperation Agreement with the County of Orange for Participation in the Urban County Cooperation Program for the Pursuit of Federal Grant Funding Opportunities RECOMMENDATION: Approve and authorize the City Manager to execute a Cooperation Agreement (Attachment 1) with the County of Orange for participation in the Urban County Cooperation Program which would enable the City to partner with the County for federal grant funding opportunities related to housing. DISCUSSION/ANALYSIS The federal Community Development Block Grant (CDBG) program provides annual grants on a formula basis to states, cities and counties to develop viable communities by providing decent housing and expanded economic opportunities for low- and moderate- income households. In the mid 1990s, the City of San Juan Capistrano elected to apply directly to the State for CDBG funds as opposed to working through the County. Since that time, the City has successfully applied for and received federal grant funding through the State for various housing and community development programs. From 1998 to 2004, the City was awarded $2.35 million in CDBG funds which were used for a First Time Home Buyer and Owner-Occupied Rehabilitation programs for lower income households, as well as toward the 27-unit Habitat for Humanity development. From 1999 to 2011, the City was awarded $3.7 million in HOME Investment Partnership Program funds, which are still being used today to provide 0% interest loans for home repair to lower income households. On April 15, 2020, the County of Orange invited the City to partner with the County on its Urban County Cooperation Program (Attachment 2) for three fiscal years beginning in the 2020/2021 fiscal year. The Urban County Cooperation Program allows Orange County jurisdictions to partner with the County for CDBG, HOME, and other federal housing fund 7/7/2020 E12 City Council Agenda Report July 7, 2020 Page 2 of 2 opportunities made available on an entitlement basis from the federal Department of Housing and Urban Development (HUD). This partnership would effectively mean that the City would apply through the County and not directly to the State for federal housing funds. Staff supports the proposed partnership with the County as an opportunity to increase the potential for future funding, and provide the City with a more accessible resource of experienced staff to answer technical questions and address any necessary grant reporting requirements. Additionally, San Juan Capistrano is currently the only Orange County city of its size that is not partnering with the County for CDBG funds. In addition to accessing housing funds, this unique situation could impact the City’s potential ability to receive other future federal or state grant funds that are disbursed through counties rather than directly to cities. For these reasons, staff recommends that the City Council approve and authorize the City Manager to execute a Cooperation Agreement with the County of Orange for participation in the Urban County Cooperation Program. FISCAL IMPACT: There is no fiscal impact to the City to join the Urban County Cooperation. The City will have annual opportunities to apply for at least $200,000 in grant funds through the County for Programs, Facilities, and Housing. ENVIRONMENTAL IMPACT: In accordance with CEQA, the recommended action is exempt from CEQA per Section 15061(b)(3), the general rule that the CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Entering into a Cooperation Agreement with the County of Orange would not be an activity with potential to cause significant effect on the environment, and therefore is exempt from CEQA. PRIOR CITY COUNCIL REVIEW: Not Applicable. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS: Not applicable. NOTIFICATION: County of Orange, Julia Bidwell ATTACHMENT(S): Attachment 1 – Urban County Cooperation Agreement Attachment 2 – County Letter Invitation for Urban County Program FY 2021-023 Cooperation Agreement Page 1 of 10 Attachment O FY 2021-23 COOPERATION AGREEMENT THIS AGREEMENT is entered into this ______- day of - BY AND BETWEEN CITY OF SAN JUAN CAPISTRANO, a municipal Corporation, hereinafter referred to as “CITY”, AND COUNTY OF ORANGE, a political subdivision of the State of California and recognized Urban County under the Federal Housing and Community Development Act of 1974 (Public Law 93-383), as amended, hereinafter referred to as "COUNTY". CITY and COUNTY are referred to herein individually as a “Party” and collectively as the “Parties.” RECITALS WHEREAS, Title I of the Housing and Community Development Act of 1974 (Public Law 93 - 383), as amended, hereinafter referred to as ACT, makes available to the COUNTY as an Urban County, and t o cities under 50,000 in population, grants through the Community Development Block Grant Program (hereinafter referred to as "CDBG"), and the HOME Investment Partnership Program (hereinafter referred to as "HOME"), and any subsequent United States Departm ent of Housing and Urban Development (hereinafter referred to as "HUD") Program which may become available to the COUNTY to be used for eligible housing and community development activities; and WHEREAS, the ACT requires such cities and the COUNTY to enter into cooperation agreements in order for the cities to be included as part of the Urban County CDBG and HOME Programs; and WHEREAS, the COUNTY and CITY agree to cooperate to undertake, or assist in undertaking, community development and lower income housing assistance activities, which might include, but are not limited to, (1) acquisition of property for disposition for private reuse, especially for low - and moderate -income housing, (2) direct rehabilitation of or financial assistance to housing, ATTACHMENT 1 FY 2021-023 Cooperation Agreement Page 2 of 10 (3) low rent housing activities, (4) disposition of lead to private developers for appropriate redevelopment, and (5) condemnation of property for low income housing. NOW, THEREFORE, the Parties agree as follows: 1. This Agreement shall constitute a cooperatio n agreement between the Parties within the meaning of Section 102 (a)(b) of the ACT. The parties agree to cooperate to undertake, or assist in undertaking, activities which might include, but are not limited to, (1) acquisition of property for disposition for private reuse, especially for low - and moderate -income housing, (2) direct rehabilitation of , or financial assistance to , housing, (3) low rent housing activities, (4) disposition of land to private developers for appropriate redevelopment, and (5) condemnation of property for low income housing-community. 2. COUNTY shall have the authority to carry out activities, which will b e funded from annual CDBG or HOME Program funds appropriated for Fiscal Years 2021-2023 and from any program income generated from the expenditure of such funds. 3. COUNTY shall have final responsibility for selecting activities and annually filing the grant application (i.e. Annual Action Plan) with HUD. In the preparation of said application, COUNTY shall give due consideration to CITY's analysis of community development needs and proposed activities. 4. COUNTY certifies that it is following an adopted Consolidated Plan as required by 24 CFR Part 91 and 24 CFR Part 570.306. 5. Since HUD will not accept an agreement including a provision for veto or other restriction which would allow any party to obstruct implementation of the Consolidated Plan, both COUNTY and CITY shall attempt to fulfill housing goals established by the HUD approved Consolidated Plan for the period of this Agreement. 6. CITY acknowledges that it has adopted and is enforcing: a. A policy prohibiting the use of excessive force by law enforcement agenc ies within its jurisdiction against any individuals engaged in non -violent civil rights demonstrations; and a policy of enforcing applicable State and local laws against physically barring entrance to or exit from a facility or location which is the subject of such non-violent civil rights demonstrations within jurisdictions. 7. COUNTY and CITY agree to take all actions necessary to ensure compliance with the Urban County's certification required by Section 104 (b) of Title I of the Housing Community Development Act of 1974, as amended, including Title VI of the Civil Rights Act of 1964, the Fair Housing Act, Section 109 of Title I of the Housing and Community Development Act of 1974, and other applicable laws. Failure by CITY to comply with these provisions or to affirmatively further fair housing within its own jurisdiction or CITY action which impedes the COUNTY's actions to comply FY 2021-023 Cooperation Agreement Page 3 of 10 with the COUNTY's fair housing certification, may constitute noncompliance with the Urban County CDBG and HOME Programs and may cause funding sanctions or other remedial actions by HUD and/or COUNTY. 8. The COUNTY and the CITY shall take all actions necessary to assure compliance with the COUNTY’S certification under section 104(b) of Title I of the Housing and Community Development Act of 1974, that the grant will be conducted and administered in conformity with Title VI of the Civil Rights Act of 1964 and the Fair Housing Act and will affirmatively further fair housing as required under See 24 CFR 91.225(a) and 5.105(a). The Parties shall comply with section 109 of Title I of the Housing and Community Development Act of 1974, which incorporates Section 504 of the Rehabilitation Act of 1973 of Title II of the Americans with Disabilities Act, the Age Discrimination Act of 1975, and Section 3 of the Housing and Urban Development Act of 1968, and all other applicable laws. The Parties agree that no urban county funding will be used for activities in, or in support of, any cooperating unit of general local government that does not affirmatively further fair housing within its own jurisdiction or that impedes the COUNTY’S actions to comply with the COUNTY’S fair housing certification. In the event COUNTY’s Urban County application is approved by HUD, COUNTY shall contract with the CITY to utilize any such grant funds received from HUD which are attributable to activities administered by CITY, unless another form of allocation is required by HUD. 9. This agreement sha1l cover Program Years 2021 -2023 (fiscal Years 2021 – 2023, respectively of CDBG and HOME program applications, including any subsequent Supplemental sources (Paragraph 24 below). In no event shall this Agreement be terminated by either party before June 24, 2024, except as allowed in legislation enacted by the U.S. Congress fo r termination or withdrawal from the Urban County Program and as permitted by HUD. 10. CITY and COUNTY agree to adopt amendment(s) to this Agreement as may be required by HUD to meet any new Urban County Qualification requirement(s) subsequent to July 24, 2020. The COUNTY will notify CITY of its right to terminate its participation in the program based on the adoption of any such amendment. If either CITY or COUNTY refuses to adopt any such amendment, this automatic renewal provision herein will be void. 11. This Agreement shall cover Program Years 2021 - 2023 (Fiscal Years 2021 - 2023, respectively) of CDBG and HOME program applications, including any subsequent Supplemental sources (Paragraph 24 below). In no event shall this Agreement be terminated by either part y before July 24, 2024, except as allowed in legislation enacted by the U.S. Congress for termination or withdrawal from the Urban County Program and as permitted by HUD . The eligible activities to be undertaken during the term of this Agreement will be chosen by CITY from those authorized by HUD Rules and FY 2021-023 Cooperation Agreement Page 4 of 10 Regulations governing the CDBG and HOME Programs and any regulations which may be applicable to future Supplemental Federal Programs. 12. The parties agree to comply with the requirement(s) of the CDBG and H OME Programs, including laws and policies applicable to said Programs. 13. CITY acknowledges and agrees, by its executing this Agreement, as follows : a. City m ay not apply for grants from appropriations under the Small Cities or State CDBG Programs for fiscal years during the period in which it participates in the COUNTY'S CDBG program and; b. City m ay not participate in a HOME consortium except through the Urban County, regardless of whether the Urban County currently received a HOME formula allocation . 14. City may not terminate or withdraw from th is Agreement while it remains in effect until the CDBG and HOME funds and income received with respect to the three -year qualification period (and any successive qualification periods under agreements that provide for automatic renewals) are expended and the funded activities are completed . 15. In accordance with HUD Notice CPD 20-03, and subsequent CPD Notices, this Agreement will be automatically extended for an additional three (3) year period (i.e. from July 1, 2024 to June 30, 2027) unless COUNTY or CITY provides written notice that it elects not to participate in a new qualification period, COUNTY shall notify CITY in writing of its right not to participate any longer than the date specified in HUD’s Urban County Qualification Notice for the next qualification period. 16. a. CITY must inform COUNTY, through periodic reports requested by COUNTY, of any income generated by the expenditure of Program funds received by the CITY. Pursuant to applicable federal requirements, such program income must be paid to the COUNTY. CITY may retain such program income only if agreed upon by COUNTY and used exclusively for eligible activities as determined by the COUNTY and in accordance with all CDBG and HOME Program requirements as may then apply. b. CITY shall keep and maintain appropriate records on the use of program income as required by COUNTY as the COUNTY has the responsibility of monitoring and reporting program income to HUD. c. In the event of close-out or change in status of CITY, any program income at that time or received subsequent to the close -out or change in status shall be paid by CITY to the COUNTY within ninety (90) days after the expiration of the term of this Agreement. 17. a. Any proposed modification or change of use of any real property acquired or improved in whole or in part by the CITY using CDBG funds (from the use planned at the time of FY 2021-023 Cooperation Agreement Page 5 of 10 acquisition or improvement), including disposition, must be reported by CITY to the C OUNTY. COUNTY may approve the proposed modification or change of use. CITY shall not implement the modification or change in use without COUNTY approval. b. Should the disposition , sale or transfer of such real property acquired or improved in whole or in part using CDBG or HOME Program funds result in a use which does not qualify under CDBG or HOME Program regulations, the CITY shall reimburse COUNTY in the amount equal to the then current fair market value of the property (less any portion ther eof attr ibutable to expenditure of non -CDBG/HOME funds). c. Any program income generated from the disposition, transfer or sale of such property prior to or subsequent to the close-out, change of status or termination of the cooperation agreement between the COUNTY and CITY may be either used by CITY for other specific eligible activities in the CITY or paid to the COUNTY for other eligible Urban County activities, determined in advance of the expenditure at the discretion of the COUNTY. 17. a. The City shall have the authority to carry out activities, which were funded from annual CDBG or HOME Program funds appropriated for Fiscal Years prior to FY 2021 -23_ and from any program income that was generated from the expenditure of funds prior to FY 2021 -24. b. CITY shall keep and maintain appropriate records on the use of prior program income as required by HUD and has responsibility of monitoring and reporting program income to HUD. 18. a. CITY shall indemnify, hold harmless, and defend with counsel approved in writing by COUNTY, its officers, agents and employees against all liability, claims, losses, demands and actions for injury to or death of persons or damage to property arising out of or alleged to arise out of or in consequence of this Agreement including attorneys' fees, provided such liability, claims, demands, losses or actions are due to the acts or omissions of CITY, its officers, agents or employees in the performance of this Agreement, including any activities conducted by CITY under its application. b. In addition, CITY shall indemnify, defend with counsel approved in writing by COUNTY, and hold harmless COUNTY against any liability, claims, losses, demands, and actions including attorneys ’ fees incurred by COUNTY as a result of a determination by HUD that activities undertaken by CITY under CITY's application failed to comply with any laws, regulations, or policies applicable thereto or that any funds forwarded to CITY under this Agreement were improperly expended. FY 2021-023 Cooperation Agreement Page 6 of 10 c. The provisions of Section 2778 of the California Civil Code, as said section exists on the effective date of this Agreement, shall be applicable to the above indemnification provisions. Transmittal to CITY of any pleadings served upon COUNTY shall be deemed to be a request to defend. 19. a. COUNTY shall indemnify, hold harmless and defend with counsel approved in writing by CITY, its officers, agents and employees against all liability, claims, losses, demands and actions for injury to or death of persons or damage to property arising out of or alleged to arise out of or in consequence of this Agreement, provided such liability, claims, demands, losses or actions are due to the acts or omissions of COUNTY, its officers, agents or employees in the performance of this Agreement, including any activities conducted by COUNTY under its application. b. In addition, COUNTY shall indemnify, defend with counsel approved in writing by CITY, and hold harmless CITY against any liability, claims, losses, demands, and actions including attorney's fees incurred by CITY as a result of a determination by HUD that activities undertaken by COUNTY under COUNTY's application failed to comply with any laws, regulations, or policies applicable thereto or that any funds forwarded to COUNTY under this Agreement were improperly expended. c. The provisions of Section 2778 of the California Civil code, as said section exists on the effective date of this Agreement, shall be applicable to the above indemnification provisions. Transmittal to COUNTY of any pleadings served upon CITY shall be deemed to be a request to defend. 20. a. COUNTY shall have the right to periodically audit CITY's records to determine compliance with this Agreement. b. CITY shall forward to COUNTY a copy of each annual audit of the CITY conducted by an independent public auditor during the period of this Agreement as soon as the audit report becomes available. COUNTY shall have the right to ensure that necessary corrective actions are made by CITY for any audit findings pertinent to CITY handling of CDBG Program funding pursuant to federal requirements. 21. No CDBG or HOME Program funds shall be expended on any activity, which does not affirmatively further fair housing goals within CITY. 22. Pursuant to 24 CFR Part 570.501(b) of CDBG and 24 CFR Part 92.504 of HOME program regulations, CITY is subject to all requirements applicable to subrecipients, including the requirement of a written agreement set forth in 24 CFR Part 570.503 of CDBG and 24 CFR Parts 92.505-509 of HOME program regulations. 23. The CITY, and all other applicable units of general local government, may not sell, trade, or otherwise transfer all or any portion of such funds to another such metropolitan city, urban county, unit FY 2021-023 Cooperation Agreement Page 7 of 10 of general local government, or Indian tribe, or insular area that directly or indirectly receives CDBG funds in exchange for any other funds, credits or non-Federal considerations, but must use such funds for activities eligible under title I of the Act. 24. This Cooperation Agreement shall apply to any supplemental program which HUD makes available through the CDBG or the HOME Programs. 25. CITY may void this Agreement only if it submits to COUNTY on or before July 24, 2020 the notification from HUD that CITY has qualified as a "Metropolitan City" or an "Entitlement City" prior to the completion of the re-qualification process for Fiscal Years 2021-23. Upon such notification by HUD, CITY also must submit to COUNTY and HUD written notification of its decision to either remain in the Urban County Program as a "Metropolitan City" or become an "Entitlement City" as a separate entity. 26. Any notices, requests or approvals given under this Agreement may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested to the following address: COUNTY County of Orange __________________________ __________________________ Attn: _____________________ CITY City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano CA 92675 Attn: City Manager Any Party may change its address for notice by giving written notice thereof to the other Parties. 27. This Agreement contains the entire Agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by all Parties. 28. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by all Parties. 29. This Agreement shall be governed by the laws of the State of California. Venue shall be in Orange County. 30. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not workdays. All references to a Party or the Parties include all elected officials, FY 2021-023 Cooperation Agreement Page 8 of 10 officers, personnel, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various sections of this Agreement are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement. 31. Time is of the essence for each and every provision of this Agreement. 32. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Parties any contractual rights by custom, estoppel, or otherwise. 33. There are no intended third-party beneficiaries of any right or obligation assumed by the Parties. 34. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect. 35. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party. 36. If a dispute arises between the Parties relating to this Agreement (a “Dispute”), the Parties agree to use the following procedure prior to pursuing other legal remedies: A meeting among the Parties shall promptly be held in Orange County, California. Attendees representing each of the Parties shall be senior staff members of each of the Parties who can recommend that each of the Parties’ Board of Directors approve any proposed resolution. The representatives of the Parties will attempt in good faith to negotiate a resolution of the dispute. 37. Two (2) or more duplicate originals of this Agreement may be signed by all the Parties hereto, each of which shall be an original but all of which together shall constitute one and the same instrument. // // // // // // // // // // // FY 2021-023 Cooperation Agreement Page 9 of 10 // // // FY 2021-023 Cooperation Agreement Page 10 of 10 IN WITNESS WHEREOF, CITY has caused this Agreement to be executed by its Mayor/City Manager and attested by its City Clerk; COUNTY has caused this Agreement to be executed by the Director of the Housing and Community Development Department; each having been duly authorized by the CITY Council and the COUNTY Board of Supervisors, respectively. _______________________________ ATTEST: CITY OF San Juan Capistrano, a municipal By: Corporation in the State of California Name: Maria Morris By: ___________________________ Title: City Clerk Name: Benjamin Siegel Date: _____________________ Title: Date: _____________________ COUNTY OF ORANGE, a political subdivision of the State of California By:_________________________________________________ Title:____________________________________ Date: _____________________ ORIGINAL FORM CONTRACT APPROVED AS TO FORM and REQUIRED COUNTY COUNSEL STATEMENT: "The terms and provisions of the agreement are fully authorized under State and local law and the agreement provides full legal authority for the County." By: _____________________ Date: _____________________ Deputy County Counsel April 15, 2020 Subject: Notice of Re-Qualification in Urban County CDBG Program, (Three-Year Cooperation Agreement FY 2021-2024) Dear Mr. Siegel: The County of Orange is scheduled for re-qualifying for entitlement status as an Urban County and is beginning the process of renewing Cooperation Agreements with cooperating cities for the next three-year period (2021-2024). In light of the fiscal crisis at the State and Federal levels and increasing costs to administer programs such as the Community Development Block Grant (CDBG) program, the County is considering opportunities for Entitlement Cities to join the Urban County’s Program as a “Metropolitan City”. The County currently administers the CDBG Program for eleven (11) cities with populations under 50,000 (participating cities) and two (2) cities, Placentia and Yorba Linda, with populations over 50,000 (metropolitan cities). The eleven (11) participating cities include Brea, Cypress, Dana Point, Laguna Beach, Laguna Hills, Laguna Woods, La Palma, Los Alamitos, Seal Beach, Stanton, and Villa Park. Housing & Community Development staff are experienced in administering the CDBG Program and has the infrastructure and staffing resources in place to manage all the requirements. If you would like to discuss the potential of the County running your City’s administrative portion of the entitlement process (i.e. Consolidated Plan, Annual Action Plan (AAP), Consolidated Annual Performance and Evaluation Report (CAPER), Integrated Disbursement & Information System (IDIS), National Environmental Policy Act (NEPA) environmental review, Fair Housing, Citizen Participation Plan (CPP), CDBG technical assistance, and liaison between City and HUD) while your City retains direct control of the program portion in exchange for 10% of the total administrative funds, please let us know by May 1, 2020. Please note that Metropolitan City awards are determined by HUD. If you wish to participate in the Urban County Program for the next qualification period, HUD requires that we execute a Cooperation Agreement with your City that requires approval from your City Council and legal team. We have received HUD’s CPD-20-03 Notice on March 9, 2020, which establishes procedures and deadlines for participation. However, if you wish to pursue the same entitlement status and not participate in the Urban County Program, you do not need to take any action. DYLAN WRIGHT DIRECTOR OC COMMUNITY RESOURCES CYMANTHA ATKINSON ASSISTANT DIRECTOR OC COMMUNITY RESOURCES VACANT DIRECTOR ADMINISTRATIVE SERVICES ANDI BERNARD INTERIM DIRECTOR OC ANIMAL CARE JULIA BIDWELL DIRECTOR OC HOUSING & COMMUNITY DEVELOPMENT RENEE RAMIREZ DIRECTOR OC COMMUNITY SERVICES STACY BLACKWOOD DIRECTOR OC PARKS JULIE QUILLMAN COUNTY LIBRARIAN OC PUBLIC LIBRARIES OC HOUSING & COMMUNITY DEVELOPMENT 1501 ST. ANDREW PLACE, 1ST FLOOR SANTA ANA, CA 92705 PHONE: 714.480.2991 FAX: 714.480.2978 ATTACHMENT 2 If you are interested in scheduling a meeting to explore the possibility of becoming a “Metropolitan City”, please contact Craig Fee at (949) 527-0599 Craig.Fee@occr.ocgov.com by May 1, 2020. Sincerely, Julia Bidwell Director, Housing & Community Development Attachment: HUD Notice CPD-20-03 cc: Maria Morris, City Clerk