Title
Approval of Recommended Community Development Block Grant Program Year 2026 Annual Action Plan Allocations and Substantial Amendment to the Consolidated Plan
Recommended Action
Committee Recommendation:
Not referred to a Committee.
City Manager Recommendation:
Move to approve the recommended Community Development Block Grant (CDBG) Program Year 2026 Annual Action Plan Allocations and Substantial Amendment to the Consolidated Plan and forward to the full City Council for consideration.
Report
Issue:
Whether to approve the recommended CDBG Program Year 2026 Annual Action Plan Allocations and Substantial Amendment to the Consolidated Plan and forward to the full City Council for consideration.
Staff Contact:
Anastasia Everett, Sr. Housing Program Specialist, Community Planning and Economic Development, 360.233.6197
Presenter(s):
Anastasia Everett, Sr. Housing Program Specialist, Community Planning and Economic Development
Background and Analysis:
The City of Olympia is an entitlement community for the U.S. Department of Housing and Urban Development’s (HUD) CDBG Program. More information about the CDBG program is available as an attachment to this staff report, titled CDBG Program Information.
Staff presented a discussion on the Program Year 2026 process at the Community Livability and Public Safety Committee on February 25, 2026. Staff recommended and the committee supported not issuing a Request for Proposals and instead directly awarding Program Year 2026 funding to Program Year 2025 subrecipients performing housing and microenterprise assistance activities with knowledge of funding requirements and demonstrated ability to spend down funds.
Available resources for Program Year 2026 include an entitlement award of $376,415 and proposed reallocation of $35,176 of revolving loan funds, bringing the total available resources to $411,591. Recommended awards and project descriptions are attached to this staff report, titled Program Year 2026 Funding Recommendations. Staff recommends splitting the funding evenly between the four subrecipients and funding the City’s program administration at its maximum extent of 20% of the entitlement award. There are risks associated with the Program Year 2026 award. More information can be found in the attachment to this staff report titled Federal Funding Risks.
Substantial Amendment to the Consolidated Plan
The City is required by our Public Participation Plan to hold a 30-day public comment period and public hearing for proposed Substantial Amendments to the Consolidated Plan. Staff recommend the dissolution of the Revolving Loan Fund and future projects to the Rental Rehabilitation Program due to constraints in staff capacity and low program impact. Since its establishment in 2021, two projects have been completed and one is underway. Dissolving the rental rehabilitation program will help the City ensure timely spend down of funds. Staff have consulted with HUD on the process for dissolving the loan fund and are following the processes provided. Funds formerly routed to the Revolving Loan Fund are proposed to be reintegrated with Program Income to be spent on activities identified as Contingency Projects in each Annual Action Plan process.
Timeline and Next Steps
Staff will draft the Annual Action Plan (AAP) in accordance with recommendations submitted from this Committee. The draft AAP will be available for a 30-day public comment period beginning June 8 and ending July 9. Two separate public hearings will be held for the Program Year 2026 AAP and the Substantial Amendment to the Consolidated Plan at the regular City Council meeting June 23. Consideration of Council approval for the AAP and Substantial Amendment is scheduled at the July 14 regular City Council Meeting. The AAP is due to HUD no later than July 17.
Climate Analysis:
CDBG is a flexible grant that can be used to support the City’s climate goals. Activities proposed in the Program Year 2026 award such as Energize Thurston decrease carbon emissions. No activities presented are expected to increase carbon emissions.
Equity Analysis:
CDBG funds must primarily benefit 80% or under Area Median Income (AMI) persons. There are statistically major disparities in income that are tied to marginalized groups in our community. More information about disparities can be found in the City’s Assessment of Fair Housing.
Neighborhood/Community Interests (if known):
CDBG funding is used to support Olympia residents with incomes at or below 80% of the Area Median Income. Supporting low- and 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.
Financial Impact:
The PY26 entitlement award is $376,415 and the proposed reallocation of unspent RLF is $35,176. The CDBG program can anticipate collecting between $50,000 and $250,000 in Program Income during the program year, increasing the funding available for proposed contingency activities. Local funds are used to pay for approximately half of 1 FTE’s salary and benefits.
Options:
1. Move to approve the recommended Community Development Block Grant (CDBG) Program Year 2026 Annual Action Plan Allocations and Substantial Amendment to the Consolidated Plan and forward to the full City Council for consideration.
2. Move to approve, with amendments, the recommended Community Development Block Grant (CDBG) Program Year 2026 Annual Action Plan Allocations and Substantial Amendment to the Consolidated Plan and forward to the full City Council for consideration.
3. Move to recommend approval of only the Annual Action Plan allocations and do not recommend approval of the Substantial Amendment to the Consolidated Plan.
Attachments:
Program Year 2026 Funding Recommendations
Federal Funding Risks
CDBG Program Information