title
Presentation, discussion, and possible action on the Community Development Block Grant Coronavirus Aid, Relief, and Economic Security Act Program to allocate unutilized funds
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RECOMMENDED ACTION
recommendation
WHEREAS, on March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law which provides relief for individuals and businesses negatively impacted by COVID-19;
WHEREAS, Title XII of the CARES Act provides supplemental formula funding of at least $5 billion to states to carry out activities under the Community Development Block Grant program (CDBG CARES) or CDBG-Coronavirus (CDBG-CV) among other programs to prevent, prepare for, and respond to COVID-19;
WHEREAS, the Department received $141,846,258 in three allocations of CDBG CARES funding from the U.S. Department of Housing and Urban Development (HUD), to prevent, prepare for, and respond to COVID-19;
WHEREAS, on April 14, 2022, the Board approved awards totaling $43,389,567 in CDBG CARES to 15 Community Resiliency Program (CRP) projects;
WHEREAS, since the time of the CRP Notice of Funding Availability (NOFA) release, $5,592,882 was identified as unutilized funds to be reallocated during the timeframe outlined in the Board Action Request, increasing the total amount of awarded CRP funds to $48,982,450;
WHEREAS, an additional $729,369 has been identified as unutilized CDBG CARES funding available to be reprogrammed and staff expects that additional funds may become available;
WHEREAS, staff is now recommending the Board allow the allocation of CDBG CARES funds totaling $729,369 into CDBG CARES eligible activities for existing and previous contracts with unmet needs; and
WHEREAS, staff is also recommending that the Board authorize staff to reallocate any additional CDBG CARES funds to existing and previous eligible CDBG CARES projects, or other activities allowable in the plan approved by HUD, as funding becomes available, without returning to the Board;
NOW, therefore, it is hereby
RESOLVED, that the Executive Director, and his designees, are authorized, empowered, and directed, for and on behalf of the Department, to take any and all such actions as they or any of them may deem necessary or advisable to effectuate the award of $729,369 of unutilized CDBG CARES funding, conditioned on Previous Performance Review and approval or approval with conditions; and
FURTHER RESOLVED, should any other current or remaining CDBG CARES funds from CRP or other CDBG CARES activities be returned, deobligated, allocated by HUD, or otherwise made available, staff is authorized to allocate the funding to existing or previous awardees for identified unmet needs, in the Executive Director’s sole determination, with a total CDBG CARES awarded funds for CRP projects not to exceed $5,000,000, or for other activities the amounts allowable in the plan approved by HUD.
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BACKGROUND
On March 27, 2020, the CARES Act was signed into law. The CARES Act provides for $5 billion to be distributed through the CDBG Program nationally and includes waivers of certain provisions of the CDBG regulations. The CDBG Program is a HUD-funded program designed to provide decent housing and a suitable living environment, and expand economic opportunities, principally for low- and moderate-income persons. The response by HUD to address the Coronavirus Pandemic under CDBG CARES allows the funding to be used for a range of eligible activities which prevent, prepare for, or respond to the spread of infectious diseases such as the coronavirus disease 2019 (COVID-19).
The Department’s Third Substantial Amendment to the 2019 State of Texas Consolidated Plan One Year Action Plan was approved on July 8, 2021. Six CDBG CARES programs were since established and implemented: Texas Emergency Rental Assistance Program, Texas Emergency Mortgage Assistance Program, Legal Services to Persons with Disabilities, Relief to Service Providers for Persons with Disabilities, Food Distribution Program, and the Community Resiliency Program.
In order to utilize all CDBG CARES funds prior to the end of the Department’s contractual deadline with HUD by September 2026, the Department has identified $729,369 in unutilized CDBG CARES funding, as indicated in the table below. As the Department begins to ramp down the CDBG CARES Program, additional unutilized funds may continue to be identified.
|
Program Activity |
Recommended Allocation to future CRP |
|
Projected unused State Admin funds |
$ 729,369 |
|
TOTAL AVAILABLE FOR CRP |
$ 729,369 |
Staff reviewed each of the existing 18 CRP contracted projects previously awarded by the Board, as well as prior successful CDBG CARES programs and used the following criteria to determine unmet needs:
• Subrecipients who did not originally receive an award for the full amount they requested under the NOFA application
• Subrecipients who did not request or receive the $5,000,000 maximum allowable funding per project from the CRP NOFA
• Subrecipients which are “shovel ready”, but for which additional funding is needed to begin construction of the CRP project
• Subrecipients whose project has gone out for bid and the bid came in over budget
• Non-CRP Subrecipients who previously and successfully administered a CDBG CARES program and could continue the activity type if additional funding was available
After reviewing for the above criteria, staff identified:
• Five projects received an award very near to or at $5,000,000 which was the CRP NOFA maximum cap, so are not eligible to receive additional funds because of the NOFA’s award cap;
• Four projects have been completed, and therefore do not require further assistance;
• Four projects are fully underway and do not need additional funds;
• One project has gone out to bid and the bid process has not closed;
• One project has received bids, however the bids came in higher than the available funds and the project will need to be redesigned;
• One project has gone out to bid twice, however the bid came in substantially higher than the available funds and the City is preparing to rebid;
• One project (City of Hillsboro) is underway, however it did not receive its full application request amount due to a shortage of funds at that time and is still interested in receiving their full award;
• One project (Matagorda County) has received a bid and is “shovel ready”, but needs additional funding to begin construction; and
• One previously successful CDBG CARES program (Legal services for persons with disabilities performed by Disability Rights Texas) is able to continue the activity type, however has no additional funding to continue.
Based on the criteria above and in order to fully utilize the funding, CDBG CARES staff has identified two current CRP subrecipients and one previous subrecipient, which successfully implemented their CDBG CARES project, as subrecipients which currently meet an immediate unmet need and will utilize the available unallocated funding. Several additional subrecipients have the potential to meet the criteria of having an unmet need once final construction bids are received, and should additional funds become available.
|
Subrecipient |
Unmet Need |
Funding Amount |
|
City of Hillsboro |
Original CRP application requested 2 ambulances. Funding was available for 1 ambulance at the time of award. This award provides funds for the second ambulance. |
$ 267,159 |
|
Matagorda County |
Project came in overbid and additional funding will go towards filling the gap as the unmet need portion of the project |
$ 387,210 |
|
Disability Rights Texas |
Continued unmet need to provide Legal services to persons with disabilities |
$ 75,000 |
|
|
TOTAL AVAILABLE |
$ 729,369 |
With this action item, TDHCA will reallocate $729,369 to three CDBG CARES subrecipients. Should any other CDBG CARES funds from CRP or other CDBG CARES activities be returned, deobligated, allocated by HUD, or otherwise made available, staff shall reallocate those funds to subrecipients with an unmet need with a total CRP project maximum not to exceed $5,000,000 or for other activities, in the amounts authorized by the plan approved by HUD.
In the interest of time, any further reallocation of funds from CDBG CARES funds will not be presented to the Board, but will be reallocated as soon as a sufficient amount of funds are available to award until April 30, 2026, or as may be extended by the Executive Director. Any such awards will be reported to the Board at the next ensuing Board meeting.
Staff recommends the awards conditioned on PPR recommendation or recommendation with conditions, as reflected herein.