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PUBLIC HEARING TO APPROVE AND ADOPT THE 2025-2029 CONSOLIDATED PLAN, 2025-2026 ANNUAL ACTION PLAN, COMMUNITY PARTICIPATION PLAN, LANGUAGE ACCESS PLAN, AND SECTION 3 PLAN FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT, HOME INVESTMENT PARTNERSHIPS, AND EMERGENCY SOLUTIONS GRANTS PROGRAMS
recommended action
RECOMMENDATION
It is recommended that after the public hearing, the City Council adopt a resolution to:
1. Approve and adopt the 2025-2029 Consolidated Plan (Con Plan) for the Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), and Emergency Solutions Grants (ESG) Programs;
2. Approve and adopt the Community Participation Plan, Language Access Plan, and Section 3 Plan;
3. Approve and adopt the 2025-2026 Annual Action Plan (Action Plan) with the estimated Sources and Uses of Funds for the CDBG, HOME, and ESG Programs awarded by the U.S. Housing and Urban Development Department (HUD), authorizing proportional adjustments to funding amounts based on the final HUD allocations;
4. Authorize the City Manager, or designee, to coordinate final revisions to the Con Plan and Action Plan to ensure that approved activities and all public comments received during the 30-day public comment period are included in the final Con Plan and Action Plan; and
5. Authorize the City Manager, or designee, to execute all documents and forward them to HUD, execute contracts with subrecipients, and to take whatever actions are necessary and appropriate to carry out the purpose and intent of the resolution.
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Summary
The U.S. Department of Housing and Urban Development (HUD) requires that jurisdictions prepare a Five-Year Consolidated Plan (Con Plan) every five years to receive federal Community Development Block Grant (CDBG), Home Investment Partnerships (HOME), and Emergency Solutions Grants (ESG) Program funding.
The purpose of the Con Plan is to create a five-year strategic plan that assesses affordable housing, community development needs, and market conditions with the goal of providing decent, affordable housing, a suitable living environment, and expanded economic opportunities for persons of low- to moderate-income.
The Annual Action Plan (Action Plan) is the one-year plan that outlines how the City of Stockton will use HUD funding to address the priority needs and goals identified in the Con Plan. To participate in the CDBG, ESG, and HOME programs, federal statutes also require the creation of a Community Participation Plan, Language Access Plan, and Section 3 Plan.
As part of this process, the City Council must hold a public hearing to solicit comments regarding the priority needs, goals, and objectives of the proposed 2025-2029 Con Plan and the proposed activities and resources in the 2025-2026 AAP.
DISCUSSION
Background
The City of Stockton is designated as an entitlement community, enabling the receipt of federal CDBG, ESG, and HOME funds. As part of the process, HUD requires local jurisdictions to prepare a five-year Con Plan. The Con Plan identifies the priority needs within a community through outreach and market analysis, and establishes the goals and objectives that the jurisdiction will seek to accomplish during the five years using HUD funding. The Con Plan provides an assessment of local housing and community development needs, an analysis of current housing conditions, and a five-year strategy for addressing the identified needs. The last Con Plan was adopted in 2020 and informed the framework for Stockton’s proposed 2025-2029 Consolidated Plan, with the needs assessment data, market analysis, and priorities updated to reflect current conditions.
In preparation for developing the 2025-2029 Consolidated Plan, the City published a Request for Proposals (RFP) to identify and select a qualified firm to assist in the development of the Consolidated Plan and all associated tasks and plans. Grow America was selected as the top proponent and awarded the agreement in July 2024 by City Council (Attachment A - Approved Motion 2024-07-09-1207). The agreement with Grow America includes consulting services to develop all necessary plans and support any associated activities related to such plans.
COMMUNITY PARTICIPATION PLAN (CPP)
In accordance with HUD regulations (24 CFR 91.105), jurisdictions are required to adopt a Citizen Participation Plan that sets forth policies and procedures to engage the community in the development, implementation, and evaluation of HUD programs. The City’s current Citizen Participation Plan, now referred to as the Community Participation Plan, was first adopted in 1995 (Attachment B - Resolution No. 95-0199) and most recently revised in 2016 (Attachment C - 2016 Citizen Participation Plan).
LANGUAGE ACCESS PLAN (LAP)
In accordance with federal, state, and local law, specifically Executive Order 13166, HUD Limited English Proficiency (LEP) Guidance, and section 7290 et seq. of the California Government Code (the “Dymally-Alatorre Bilingual Services Act”), the City is required to establish effective guidelines for staff when providing services to or interact with persons with Limited English Proficiency (LEP) to ensure all persons have meaningful access to HUD programs and activities. Although Executive Order 13166 was recently rescinded by Executive Order 14224, removing the requirement to develop a Language Access Plan (LAP), one has been prepared for the City of Stockton’s HUD-funded programs.
SECTION 3 PLAN
In accordance with the Housing and Urban Development Act of 1968 (12 U.S.C. 1701u) and regulated by the provisions of 24 CFR Part 75, the City is required to adopt a Section 3 Plan which ensures that, to the greatest extent feasible, jobs and economic opportunities generated by HUD-funded projects are provided to low-income persons, particularly those receiving housing assistance, and businesses that employ them.
2025-2029 CONSOLIDATED PLAN
The Consolidated Plan (Con Plan) sets forth the high-level goals and strategies related to the City’s entitlement funds (CDBG, HOME, and ESG) over a five-year period.
The following is an overview of each of the funding sources and a summary of program parameters.
Community Development Block Grant Program (CDBG)
CDBG is a flexible program that provides communities funding to address a wide range of unique community development needs that benefit low-income residents. Cities with more than 50,000 people and counties with a population of more than 200,000 are eligible to receive this funding from the federal government.
Each year, HUD determines the CDBG allocation using a formula that considers the total population, the number of persons in poverty, housing overcrowding, and the age of the housing stock within the jurisdiction.
CDBG funds are used for a wide range of activities, including but not limited to:
• Rehabilitation of residential and commercial property
• Demolition
• Public facilities and infrastructure improvements
• Economic development
• Public services (up to 15% annually)
The primary eligibility requirement for each activity is that it must benefit low-income persons. HUD defines low-income as a household that is at or below 80% of the area median income (AMI), which in Stockton as of April 2024 is an annual income of $77,100 for a family of four.
A jurisdiction may spend up to 20% of its CDBG entitlement and program income on administrative costs, which are the costs associated with daily operations, such as staff costs, to administer programs, materials and supplies, training, and consultant services. CDBG Program Delivery includes costs attributed directly to projects, as well as project delivery hard costs, such as obtaining title reports and appraisals.
HOME Investment Partnership Program (HOME)
HOME funds must be used by local governments to create affordable housing for low-income households. HOME funds are awarded annually as formula grants to participating jurisdictions. The program allows states and local governments to use HOME funds to issue grants, direct loans, loan guarantees, or other forms of credit enhancement to eligible housing developers, as well as to offer homebuyer programs, homeowner rehabilitation programs, rental housing programs, and tenant-based rental assistance. The incomes of households benefitting from HOME funds must not exceed 80% of the AMI.
HUD regulations require that 15% of the City's HOME allocation be reserved for Community Housing Development Organizations (CHDO), which are community-based organizations that develop affordable housing.
A jurisdiction may spend up to 10% of its HOME entitlement and program income on administrative costs. Housing Program Delivery includes costs attributed to specific housing projects.
Emergency Solutions Grants Program (ESG)
The City uses ESG program funds to provide grant funding to local service providers to operate emergency shelters, provide homeless services, homeless prevention, rapid rehousing programs, and street outreach services. Funds may also be used for implementation of the required Homeless Management Information System (HMIS) and for administrative activities.
The emphasis of the ESG program is to help people regain stability with placement in permanent housing after experiencing a housing crisis and/or homelessness; therefore, HUD limits the amount of a jurisdiction's ESG grant that can be used for assistance to emergency shelters and street outreach to not more than 60%.
A jurisdiction may spend up to 7.5% of its ESG entitlement on administrative costs.
The draft Con Plan will cover fiscal years 2025-2026 through 2029-2030 and includes several components, including:
• Evaluation of demographic and housing trends;
• Identification of community needs over the next five years, with a focus on the needs and areas of low- and moderate-income persons;
• Strategies to address the City’s housing, public service, public infrastructure, and economic development needs; and
• Goals, metrics, and estimated funding amounts for various types of activities.
2025-2026 ANNUAL ACTION PLAN
To receive annual federal entitlement funds (CDBG, HOME, and ESG), HUD requires jurisdictions to prepare an Action Plan for each respective program year. The 2025-2026 Action Plan represents Year One of the 2025-2029 Consolidated Plan and identifies the specific projects and activities that the City will fund during the year to help accomplish the goals established in the City’s Five-Year Consolidated Plan. All proposed projects and activities were established to align with the City’s established goals and existing plans, HUD requirements, and best practices.
Community Input
The process of developing the Con Plan, Action Plan, and associated documents began in September 2024 with the deployment of a multi-pronged approach to seek and obtain meaningful feedback from members of the public, local agencies, and service providers. The community outreach and community participation process started in October 2024 and included a mix of in-person and online community meetings, a community needs survey, focus groups, consultations, and public meetings. This process was conducted in adherence to HUD’s Citizen Participation requirements.
A community needs survey (survey) was published on October 23, 2024 and was available online through January 17, 2025. The survey was available in paper format and online in both English and Spanish, with an interface that was easily accessible with a desktop, tablet, and mobile device. The survey was advertised on the City’s website; social media platforms; EDD mailing lists; listed on promotional flyers; posted in local community center bulletin boards; and presented at public meetings, stakeholder meetings, and focus groups. Staff also attended 13 existing community events and hosted an informational booth to share the Con Plan efforts, survey, and public meeting dates. As a result of the outreach, staff received 609 survey responses.
During the outreach period, staff held seven public meetings to share the eligible uses of CDBG, HOME, and ESG funds; a poll on attendees’ top community concerns; a short discussion of local data on housing, economic development, and homelessness; and an opportunity for questions and answers. A public meeting was held in-person in each district and a virtual option was available to the public:
• November 6, 2024, at Weston Ranch Branch Library (Council District 6)
• November 7, 2024, at Seifert Community Center (Council District 3)
• November 13, 2024, at Oak Park Senior Center (Council District 4)
• November 14, 2024, at McNair High School (Council District 1)
• November 20, 2024, at Van Buskirk Community Center (Council District 5)
• December 4, 2024, at Arnold Rue Community Center (Council District 2)
• December 11, 2024, Virtual (City-wide)
Lastly, during the outreach period, one-on-one stakeholder consultations with local and regional service providers were conducted. Focus groups were held with affordable housing, homelessness services, economic development, and public service providers to gain insight into the needs of the local stakeholders and their client communities. The information gathered was used to help inform the goals and priorities of the Con Plan.
Present Situation
2025-2029 CONSOLIDATED PLAN
Through the planning process and with the insight provided by the survey, stakeholder meetings, focus groups, and public outreach, the City has identified four priority needs, six associated goals, and one additional goal to support all needs. These priorities and goals are outlined below, and were framed to address the community needs conveyed by the community during public outreach (Attachment D - Draft 2025-2029 Consolidated Plan).
Priority Needs and Goals
1. Increase and Preserve Affordable Housing Opportunities
Associated Goal 1: Development & Rehabilitate Affordable Housing Units
2. Reduce Homelessness
Associated Goal 2: Provide Funding for Service Providers to Prevent & Reduce Homelessness
3. Resilient & Healthy Communities
Associated Goal 3: Resilient Infrastructure & Public Facilities
Associated Goal 4: Healthy Neighborhoods & Residents
4. Strengthen Local Economy
Associated Goal 5: Support Businesses
Associated Goal 6: Increase Access to Economic Opportunity
Goal Supporting All Needs: Compliance
Within each associated goal, the Con Plan outlines the outcomes that the City will plan to achieve over the five-year period. For example, Goal 1 seeks to construct 250 new multifamily rental units, facilitate the acquisition of 25 units, rehabilitate 155 multifamily rental units, and rehabilitate 25 owner-occupied housing units.
An entirely new goal framework for the 2025-2029 Consolidated Plan is the inclusion of Goal 3: Resilient Infrastructure & Public Facilities. This goal was established to enable CDBG funds to be deployed to address infrastructure and public facilities’ needs, such as curb, gutter, and sidewalk installation, environmental cleanups, and other eligible activities to benefit low-income residents and neighborhoods.
2025-2026 ANNUAL ACTION PLAN
Based on the community’s feedback and the City’s current efforts, the 2025-2026 Action Plan proposes the following activities, projects, and programs to achieve the goals identified in the Con Plan (Attachment E - Draft 2025-2026 Annual Action Plan).
Goal 1 - Develop & Rehabilitate Affordable Housing Units: Programs to help preserve, improve, and expand the supply of decent affordable housing for lower-income households include the Single-Family Home Loan Repair Program, Emergency Home Repair Program, and the annual CDBG Housing Loan Program. These efforts, which are funded by CDBG and HOME, aim to support the preservation by providing financial assistance to low-income single-family homeowners and to support the development of new affordable housing units by providing needed gap funding to affordable housing developers.
Goal 2 - Provide Services to Prevent & Reduce Homelessness: Efforts to provide housing and supportive services for the City’s homeless population including emergency, transitional, and permanent supportive shelter, as well as rapid rehousing and homelessness prevention, are funded through the annual Public Services Notice of Funding of Availability (NOFA). The 2025-2026 NOFA received 15 CDBG applications and 8 ESG applications and were subject to a two-tiered review process for eligibility (Attachment F - CDBG / ESG Applications and Recommendations):
1. A technical review and risk assessment where a staff committee reviewed all applications to determine compliance with stringent HUD regulations including consideration of the following: conflict of interest within the organization, applicant staff experience with HUD/federal grants, organization audits and findings, grant match or leverage, current organizational policies and procedures, fiscal operations with internal controls, separation of duties, and past performance with City HUD grants. Of the 15 CDBG applicants, 5 applications were deemed eligible for the next level of review and of the 8 ESG applications, 4 were deemed eligible for the next level of review.
2. The second tier consisted of the scoring of eligible applications by an EDD staff subcommittee using an intricate and objective scoring system. Scoring of the application focused on areas such as project design, project budget, organization experience and capacity, past performance and general compliance (for returning applicants), alignment with local and City Plans, and collaboration with local service providers. Scoring results were then presented to the Community Development Committee (CDC) during a public meeting on February 19, 2025, where the eligible applicants that met the NOFA scoring threshold provided a presentation to the CDC. The CDC then scored each applicant’s presentation and had the ability to modify EDD staff committee scoring as outlined in the NOFA guidelines. Final scoring results and funding recommendations were presented to the CDC on March 26, 2025 and are included in the 2025-2026 Annual Action Plan Sources and Uses.
Goal 3 - Resilient Infrastructure & Public Facilities: Prioritizing the maintenance and improvements of publicly owned facilities and infrastructure, such as neighborhood parks, community centers, streets, sidewalks, ADA accessibility, and other assets that serve low-income residents is a goal. During the 2025-2026 program year, EDD staff will work with Public Works (PW) Department staff on the use of up to $1 million of CDBG funding to address infrastructure improvements, including but not limited to curbs, gutters, sidewalks, and/or antiquated water and sewer lines in eligible low-income residential areas of the City.
Goal 4 - Healthy Neighborhoods & Residents: Ensures the provision of high-quality public services to support community development, including activities for fair housing services and other activities.
During the 2025-2026 NOFA process, staff followed the two-tiered review process to identify a series of public service providers to allocate CDBG funds. The organizations recommended for CDBG Public Services grant awards include the Emergency Food Bank of Stockton, Children’s Home of Stockton, Bread of Life, Tuleburg Press, and Friends Outside. The organizations recommended for ESG homeless services funding include Central Valley Low Income Housing Corporation (CVLIHC) and PREVAIL.
Goal 5 - Support Businesses: Programs that promote economic development activities by assisting and retaining small businesses include the Commercial Façade Improvement Forgivable Loan and Stocked Full of Produce Grant Programs. These programs provide financial assistance in revitalizing blighted commercial spaces for retail businesses and small grants for local neighborhood markets to provide access to healthy food.
Goal 6 - Increase Access to Economic Opportunity: Efforts that prioritize and expand business readiness programs targeting low-income persons, including low-income youth, disabled persons, and homeless person. Partner with local business service providers to implement workshops, technical assistance, and other eligible activities to support micro-enterprises and aspiring entrepreneurs.
Using award amounts from the previous program year as a projected award amount for FY 2025-2026, the City is expected to receive approximately $3,240,738 in CDBG funds, $1,393,227 in HOME funds, and $283,046 in ESG funds. Final award amounts and distribution among the different projects/activities in this Action Plan’s sources and uses will be increased or decreased upon HUD’s official announcement of FY 2025-2026 program year allocations (Attachment G - 2025-2026 Sources and Uses).
COMMUNITY PARTICIPATION PLAN (CPP)
Staff has updated the existing Community Participation Plan, formally known as the Citizen Participation Plan according to HUD, with the following modifications:
• Integrated Language Access Plan requirements
• Updated definition of “substantial amendment” for Consolidated Plan and Annual Action Plans
Specifically, the draft CPP states that a substantial amendment to an Annual Action Plan shall include “changes to the funding distribution method, or the reallocation of funds between eligible project activities included in the approved Annual Action Plan, which exceeds 25 percent of the City’s annual entitlement.” The current Citizen Participation Plan previously allowed for a reallocation of up to 5% of the City’s annual entitlement. The change allowing a reallocation of up to 25% provides the City with greater flexibility to adapt to changing conditions in the community, ensuring the project delivery can continue without undergoing a 30-day public comment period. The end goal is to assist with the City’s compliance with HUD’s annual expenditure deadline and threshold.
No change was made to the length of public review periods, noticing of the availability of documents, or the time and place of public hearings (Attachment H - Draft Community Participation Plan).
LANGUAGE ACCESS PLAN (LAP)
Consistent with federal requirements, a four-factor analysis was used to determine the appropriate language assistance services to ensure that persons considered LEP have access to HUD-funded programs. The four-factor analysis assessed:
1. The number or proportion of LEP individuals in the eligible service population.
2. The frequency LEP individuals encounter the program.
3. The nature and importance of the program, activity, or service provided by EDD to LEP individuals.
4. The resources available to assist LEP individuals.
Based on data from the U.S. Census Bureau’s 2023 American Community Survey (ACS), it was found that the top language group of LEP households was Spanish with 6.8% of Stockton households.
Pursuant to the draft LAP, staff has implemented and will continue to implement the following actions to provide resources for LEP individuals:
• Hiring and training bilingual staff.
• Offer interpretation services over the phone at no cost to LEP individuals when necessary.
• Utilize written translation services to produce materials in Spanish, including vital program documents.
• Provide Spanish interpretation services for in-person and virtual public meetings, as well as other languages upon request.
• Train public-facing employees on the available EDD language assistance services.
Staff shall review the LAP at least every five years to ensure individuals with LEP have continuous, meaningful access to equitable, timely, and quality language assistance services (Attachment I - Draft Language Access Plan).
SECTION 3 PLAN
Grow America and EDD staff have developed the draft Section 3 Plan (Attachment J) in accordance with HUD requirements. The plan outlines how the City of Stockton’s Economic Development Department (EDD) and its subrecipients, contractors, and subcontractors will comply with HUD’s Section 3 requirements in implementing the City’s Consolidated Plan funded programs. EDD, to the greatest extent feasible, will ensure that employment and contract opportunities resulting from HUD-funded projects are directed to low-income residents and businesses.
As outlined in the draft plan, EDD staff will conduct a number of activities to increase contracting opportunities for businesses that employ low-income workers. This includes sharing Section 3 requirements and opportunities with assisted businesses, developers, and contractors; reviewing Section 3 benchmarks and prioritization efforts with contractors and subcontractors; tracking and documenting all labor hours for Section 3 workers during applicable project implementation; hosting mandatory pre-bid meetings for contractors interested in submitting bids on Section 3 eligible projects; and leveraging communication channels to broadly share employment and contracting opportunities.
Notification
In conformance with HUD's requirements and the City's current Citizen Participation Plan (CPP), a notice of the public hearing for the draft Con Plan and Action Plan were published in The Record on March 14, 2025, which began the minimum 30-day public review period. The draft Con Plan and Action Plan were also posted on the City's website, shared via social media, and sent electronically through an email list, which includes the City's various affordable housing stakeholders.
Four public meetings were held to present the draft Con Plan and Action Plan in accordance with the current CPP:
• March 13, 2025, at Oak Park Senior Center
• March 19, 2025, at Van Buskirk Community Center
• April 2, 2025, at Sierra Vista Community Center
• April 8, 2025, at Weston Ranch Branch Library
A public hearing was held on March 26, 2025, by the Community Development Committee (CDC) to present the draft Plans to the committee and the community.
As part of the CPP process, the draft Plans being presented to the City Council on April 15, 2025 during the public hearing will also provide an opportunity for public comment. Public comments received at the time of the preparation of this staff report are included as Attachment K.
FINANCIAL SUMMARY
The proposed resolution will have no financial impact on the General Fund or any other unrestricted fund. The Con Plan includes estimated appropriations for the Economic Development Department - Housing Division's FY 2025-2029 budgets. The Action Plan includes estimated appropriations from HUD to the Economic Development Department’s FY 2025-26 budget for: CDBG, HOME, and ESG funds. These appropriations are dependent upon the receipt of anticipated funds from HUD and may vary based upon actual funding received.
Attachment A - Approved Motion 2024-07-09-1207
Attachment B - Resolution No. 95-0199
Attachment C - 2016 Citizen Participation Plan
Attachment D - Draft 2025-2029 Consolidated Plan
Attachment E - Draft 2025-2026 Annual Action Plan
Attachment F - CDBG / ESG Applications and Recommendations
Attachment G - 2025-2026 Sources and Uses
Attachment H - Draft Community Participation Plan
Attachment I - Draft Language Access Plan
Attachment J - Draft Section 3 Plan
Attachment K - Public Comments to Con Plan and AAP