Title
Approval of the 2024 Community Development Block Grant Consolidated Annual Performance and Evaluation Report
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve the Program Year 2024 Community Development Block Grant (CDBG) Consolidated Annual Performance and Evaluation Report (CAPER).
Report
Issue:
Whether to approve the Program Year 2024 CDBG CAPER.
Staff Contact:
Anastasia Everett, Sr. Program Specialist, Community Planning & Economic Development, 360.753.8277
Presenter(s):
None - Consent Calendar Item
Background and Analysis:
Each year the City reports on the performance of the Community Development Block Grant (CDBG) Program through the Consolidated Annual Performance & Evaluation Report (CAPER).
The Program Year 2024 (September 1, 2024 - August 31, 2025) CAPER and Community Summary report is available on the City’s CDBG website for review. The Community Summary report is a brief high-level overview of expenditures, available resources and select accomplishments for the reporting year. The CAPER and Community Summary illustrate the impacts CDBG made in Olympia in Program Year 2024 (PY24).
The U.S. Department of Housing and Urban Development (HUD) regulations requires the City to hold a 15-day public comment period as well as a public hearing as an opportunity for the public to review the CAPER. The public hearing is an opportunity for the public to provide testimony on the City’s expenditures and accomplishments in the draft CAPER. Testimony or comments received during the public comment period is included in the final report submitted to HUD. The public comment period for the CAPER began on Thursday, October 30 and ended 12 p.m. Friday, November 14. The City held a Public Hearing on November 10th at 6:00 p.m.
During PY24, the City supported nonprofit service providers as subrecipients as well as City internal programs. The following organizations performing the listed activities were supported during PY24:
• Enterprise for Equity - Microenterprise Assistance
• South Puget Sound Habitat for Humanity - Critical Home Repair and Energize Olympia
• Rebuilding Together Thurston County - Critical Home Repair
• City of Olympia - Planning & Administrative Costs
• City of Olympia - Homeless Response Team
• City of Olympia - Community Court (PY23 award)
• City of Olympia - Rental Rehabilitation program
The City had a total of $759,563 of funding available in PY24. This funding consisted of $347,049 of Program Year 2024 entitlement funding, $293,859 of prior year resources, and $118,655 of program income. The City expended $492,759.42 during the reporting period, which includes the vast majority of our PY24 award, and is in compliance with HUD requirements The remaining $266,803 of funds unspent in PY24 consists of $43,746 of funding allocated to critical home repair activities , approximately $9,000 of remaining funding in the Community Court PY23 award, and $214,000 of Revolving Loan funding allocated to a multifamily rehabilitation. This funding has been carried into PY25 and is expected to be drawn in full in PY25.
Expenditures recorded after August 31, 2025 will be included in the PY25 CAPER.
The full summary of CDBG resources is included in the CAPER, titled PR26 on pages 22-24.
Accomplishments associated with PY24 expenditures include:
• 8 fully subsidized electric heat pumps installed by South Puget Sound Habitat for Humanity through the Energize Olympia program
• 11 homeowner-occupied units rehabilitated through Rebuilding Together Thurston County’s Critical Home Repair program
• 6 homeowner-occupied units rehabilitated through South Puget Sound Habitat for Humanity’s Critical Home Repair program
• 25 businesses owned by low- and moderate-income community members received technical assistance through Enterprise for Equity’s microbusiness education services
• One rental unit rehabilitated with the City’s Rental Rehabilitation program
• 64 Olympians experiencing homelessness received increased access to resources through the City’s Homeless Response Team
• Funding for community members to receive housing referral services through the City’s Community Court program with Program Year 2023 funding carried into the new program year
About the CDBG Program
The City of Olympia is an entitlement community for the HUD CDBG funding. As an entitlement community, the City receives a direct award from HUD annually that must be used to benefit Olympians within the City limits. The CDBG Program is a formula award that supports community development activities to build stronger and more resilient communities. The CDBG Program is a tool for the City to meet strategic goals outlined in plans such as the One Community Plan, Housing Action Plan and Olympia Strong. CDBG also is leveraged to meet Olympia’s climate goals.
CDBG is a flexible grant that can be used for a variety of activities that primarily support low-income households. Eligible activities include the acquisition of real property, public facilities and improvements, public services, homeowner and rental rehabilitation, code enforcement, special economic development activities, microenterprise assistance, planning and capacity building, and program administrative costs, among others. The authorizing statute of the CDBG program requires that each activity funded, except for program administration and planning activities, must meet one of three national objectives established by HUD:
• Benefit to low- and moderate-income (LMI) persons;
• Aid in the prevention or elimination of slums or blight; and
• Meet a need having a particular urgency (referred to as urgent need).
Federal CDBG regulations require entitlement communities use at least 70% of non-administrative funds to meet the benefit to low- and moderate-income persons national objective (LMI). The requirements for meeting the LMI national objective for this program is that a beneficiary’s income must not exceed 80% of the area median income. The 2025 HUD area median income for the Olympia-Lacey-Tumwater metropolitan service area is $116,700.
As a requirement to receive federal CDBG funding, the City must prepare and submit a Consolidated Plan to HUD. The Consolidated Plan is designed to help states and local jurisdictions assess their affordable housing and community development needs and market conditions, and to make data-driven, place-based investment decisions. The consolidated planning process serves as a framework for a community-wide dialogue to identify housing and community development priorities that align and focus funding for the CDBG program. The process involves extensive stakeholder and public engagement to set goals and objectives.
The City completes a Consolidated Plan on a 5-year cycle in partnership with our consortia members, Thurston County and the City of Lacey. The Consolidated Plan is then carried out in each consortia member community through the preparation and execution of an Annual Action Plan (AAP), which provides a concise summary of the actions, activities and the specific federal and non-federal resources that will be used each Program Year to address the priority needs and specific goals identified by the Consolidated Plan. The City’s Program Year begins September 1 and ends August 31, annually.
The most recent Consolidated Plan was completed in 2023 and will guide the City’s AAPs until the fifth year, 2027. The current Program Year 2025 is the third year of our Consolidated Plan. The priorities outlined in the Consolidated Plan identify Housing as the highest community need. Housing related activities which can be supported by CDBG funds include various activities that increase affordable housing supply, including permanent supportive housing for persons previously homeless; preserving and improving existing affordable housing; and making housing more resilient to climate change. Additionally, community and economic development has been identified as a high priority. Activities which can be supported with CDBG funds to address this priority need include improvements to public facilities and infrastructure which support housing for low-income households and neighborhoods and assistance to small businesses.
CDBG activities may be carried out by the City as a grantee, or sub-awarded through subrecipients. The City lacks the organizational capacity and specialization to directly implement most CDBG funded activities supporting priorities in our Consolidated Plan, such as housing rehabilitation. To plan and implement activities in a timely manner, the City partners with local nonprofits and other eligible organizations through subrecipient awards.
Climate Analysis:
CDBG is a flexible grant that can be used to support the City’s climate goals. In 1980, the U.S. Congress gave the CDBG program a mandate to support energy efficiency and renewable energy technologies in property rehabilitation.
Typical energy efficiency activities funded by CDBG include design features to public facilities improvements promoting energy efficiency. Activities may also include public energy conservation services, assistance to neighborhood-based organizations undertaking energy conservation projects, and the development of energy use strategies to achieve maximum energy efficiency.
The City of Olympia continues to invest a significant amount of CDBG funding into energy efficiency projects. PY24 funds were used to install energy-efficient ductless heat pumps for low- and moderate-income homeowners through the Energize Olympia program. Examples of prior year projects include solar installation, home weatherization and additional home electrification for low- to moderate-income households.
Staff will continue to explore collaborative opportunities between the Climate and Housing programs.
Equity Analysis:
CDBG funds must primarily benefit 80% or under Area Median Income (AMI) persons. There are statistically major disparities in income that tie to marginalized groups in our community.
According to the Assessment of Fair Housing (2023-2027) prepared by the City of Olympia, Thurston Couty, and Housing Authority of Thurston County, People of Color, people with disabilities, people who are transgender, and single mothers are cost burdened at higher rates, more likely to be renters, at higher risk of displacement, are more likely to experience homelessness, and are more likely to face continuing gaps in homeownership in Thurston County. CDBG funding can be used to address each of these disadvantages. Funding is invested annually during the AAP process in community organizations providing services to marginalized groups in the community.
CDBG funding can be used in a variety of activities to improve accessibility for residents with disabilities in our community. Eligible activities include reconstruction of sidewalks to install ramps and rehabilitation of homes or public facilities to include the removal of architectural barriers to accessibility. Examples of projects funded in PY24 include critical home repairs by our subrecipient, Rebuilding Together Thurston County. Critical home repair projects funded include installation of handrails, wheelchair ramps and safety equipment in the home.
CDBG funds can also be used to provide energy efficiency upgrades to low- and moderate-income persons in the community, which for many years have been inaccessible to many families as the cost of energy improvements can be significantly higher than what is affordable. This use of funds helps close the disparity in who can benefit from high efficiency heat pumps or solar installation. Energy efficiency upgrades also often lower the cost of electricity for the homeowner or tenant, which reduces the utility burden on households.
Neighborhood/Community Interests (if known):
CDBG funding is used to support Olympia residents at or below 80% AMI. CDBG funding priorities align with the 5-year HUD Consolidated Plan, and more specific goals are targeted annually in the AAP. Supporting low-moderate income Olympia residents is a high priority for the community, and CDBG funded projects help meet many of the City’s goals outlined in the One Community Plan. CDBG funding can benefit low-moderate income residents on an area basis (such as neighborhood improvements), limited clientele basis (such as services only for seniors, people with disabilities, or people experiencing homelessness), or by providing housing and jobs.
Financial Impact:
There is no impact associated with approval of the CDBG PY24 CAPER. The CAPER reporting includes a review of expenditures during PY24 totaling $492,759.
Options:
1. Move to approve the Program Year 2024 CDBG CAPER.
2. Move to amend the Program Year 2024 CAPER and approve staff’s submittal of the amended report to HUD.
3. Take no action, risk noncompliance with HUD reporting requirements.
Attachments:
Draft CAPER
Community Summary Report