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Home My WebLink About2025-11-18; City Council; 10; Community Development Block Grant FY 2026-27 Funding Plan and Notice of Funding AvailabilityCA Review CDS Meeting Date: Nov. 18, 2025 To: Mayor and City Council From: Geoff Patnoe, City Manager Staff Contact: Nicole Piano-Jones, Senior Program Manager nicole.pianojones@carlsbadca.gov, 442-339-2191 Subject: Community Development Block Grant FY 2026-27 Funding Plan and Notice of Funding Availability Districts: All Recommended Action 1) Hold a public hearing; and 2) Adopt a resolution approving the fiscal year 2026-27 Community Development Block Grant Funding Plan and authorizing the release of a Notice of Funding Availability for fiscal year 2026-27 projects Executive Summary The City of Carlsbad receives Community Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD) each year. These grants are intended to help the city provide decent housing, a suitable living environment, and to expand economic opportunities, principally for low- and moderate-income people. As a CDBG entitlement jurisdiction, the city is required to develop plans, including the Consolidated Plan and Annual Action Plan. The Consolidated Plan identifies the community development and housing needs of the city’s low-income residents, and strategies to meet those needs over a five-year period. CDBG funds must be used for eligible projects that align with the priorities defined in the city's Consolidated Plan. The Annual Action Plan is the mechanism by which projects and programs are funded to meet the goals identified in the Consolidated Plan. The topic covered in this report is the funding plan for FY 2026-27, which reaffirms the priorities set forth in the FY 2025-30 Consolidated Plan, and begins the funding cycle for the next fiscal year. Additionally, federal regulations require the city to hold a minimum of two public hearings per year to allow for public participation in the grant funding process. Nov. 18, 2025 Item #10 Page 1 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D Explanation & Analysis The purpose of the funding plan is to begin the annual grant cycle process for FY 2026-27 by reaffirming the Consolidated Plan priorities and providing funding estimates for the upcoming year. The FY 2026-27 Funding Plan represents the first year of the FY 2025-30 Consolidated Plan. At a public hearing on Apr. 29, 2025, the City Council approved the following Consolidated Plan priorities: Priority 1: Affordable Housing – produce, preserve and provide services related to affordable for-sale and rental housing. Priority 2: Homelessness – Increase interim shelter capacity and services, increase access to case management and employment and benefits support, to help promote self- sufficiency. Priority 3: Fair Housing – Contract with service provider to offer services to residents promoting housing opportunities for all persons regardless of their protected class status. Expand fair housing education with a focus on awareness of rights, promoting inclusivity and reducing disparities to access. Priority 4: Planning and Administration – The city will utilize available CDBG funding to implement the goals of the Consolidated Plan through delivery of various programs and activities. The city will comply with reporting requirements of CDBG regulations and monitor the use of CDBG funding to ensure eligible and effective use of resources. Priority 5: Supportive Services – Increase supportive services for vulnerable groups, such as seniors and families with low incomes, including access to services such as healthcare, transportation and job training. Priority 6: Facilities and Infrastructure - Provide and improve facilities and infrastructure that serve low-income persons and communities. The proposed FY 2026-27 Funding Plan with the national and local objectives for the program are provided as Attachment A to Exhibit 1. The identified objectives reflect the city's desire to develop a program which best meets the various needs of lower-income residents in Carlsbad. The CDBG program regulates the amount of funds allocated to certain activities. Because of this, the funding plan provides estimates within three categories: public services, planning/administration, and facility improvements/affordable housing. While the FY 2026-27 grant amount is not known at this time, staff estimates the annual award to be $534,758, which is based upon a five percent reduction from the current year award. Below is a summary of the proposed FY 2026-27 Funding Plan. Should the actual grant be more or less than anticipated, staff will make adjustments proportionally over each category; public services, planning/administration, and facility improvements/affordable housing. Nov. 18, 2025 Item #10 Page 2 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D Category Key Details Estimated Available Public Services (Capped at 15% of grant) • Programs directly assisting low-income households • Services carried out by non-profit agencies $80,214 Administration/ Fair Housing (Capped at 20% of grant) • Subrecipient oversight • Compliance with federal requirements • Financial management • Fair Housing services $ 106,952 Affordable Housing/ Facility Improvements • Improve facilities and infrastructure that serve low-income persons and communities • Acquisition/rehabilitation of low-income housing $347,592 ESTIMATED FY 2026-27 AWARD: $534,758 The Notice of Funding Availability (Exhibit 1 – Attachment A) is the start of the application cycle and the process by which a portion of the city's CDBG funds are distributed to community serving projects annually. Applications for FY 2026-27 will be made available on the city's website on Nov. 21, 2025, and due by Jan. 16, 2026. Fiscal Analysis The Community Development Block Grant program is funded by the federal government and is separate from the city’s General Fund. The program operates on a reimbursement basis, in which city general funds are expended for approved activities and then reimbursed from the U.S. Department of Housing and Urban Development. Next Steps Staff will release a notice of funding availability on Nov. 21, 2025, to solicit applications for CDBG-funded projects. This process will allow local organizations to apply for funding to support programs that align with the Consolidated Plan’s priorities. City staff will review each application for eligibility and completeness and present funding recommendations to the Housing Commission in March 2026. The funding recommendations will be incorporated into the draft FY 2026-27 Annual Action Plan and made available for a 30- day public review and comment period, followed by consideration and approval by the City Council at a public hearing tentatively scheduled for April or May 2026. This timeline ensures that the city remains compliant with HUD’s requirements while addressing the community’s most pressing needs. Environmental Evaluation The proposed action is not a “project” as defined by California Environmental Quality Act Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) because the creation of funding mechanisms, including the pursuit and/or acceptance of grant funding, is a government fiscal activity which on its own does not involve any commitment to any specific project which may result in a potentially significant impact on the environment. Applying for or accepting the grant does not have a legally binding effect on any possible future discretionary action. The activities Nov. 18, 2025 Item #10 Page 3 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D or projects for which this funding is intended may require preparation of an environmental document in accordance with CEQA and the CEQA Guidelines. The proposed action will not foreclose review of alternatives or mitigation measures by the public as part of the environmental review process. Exhibit 1. City Council resolution Nov. 18, 2025 Item #10 Page 4 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D Exhibit 1 RESOLUTION NO. 2025-252 . A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING THE FISCAL YEAR 2026-27 COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING PLAN AND AUTHORIZING THE RELEASE OF A NOTICE OF FUNDING AVAILABILITY FOR FISCAL YEAR 2026-27 PROJECTS WHEREAS, the City of Carlsbad is anticipating a new allocation of Community Development Block Grant (CDBG) funds from the United States Department of Housing and Urban Development for FY 2026- 27; and WHEREAS, a public notice announcing this public hearing was published November 7, 2025; and WHEREAS, the City Council of the City of Carlsbad, California held a noticed public hearing to obtain comments on the FY 2026-27 Funding Plan; and WHEREAS, the City Council of the City of Carlsbad, California has taken all testimony into account in considering the FY 2026-27 Funding Plan and the funding priorities in the FY 2025-30 Consolidated Plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1.That the above recitations are true and correct. 2.That the proposed action is not a “project” as defined by California Environmental Quality Act Section 21065 and CEQA Guidelines Section 15378(b)(4) and does not require environmental review under CEQA Guidelines Section 15060(c)(3) because the creation of funding mechanisms, including the pursuit and/or acceptance of grant funding, is a government fiscal activity which on its own does not involve any commitment to any specific project which may result in a potentially significant impact on the environment. Applying for or accepting the grant does not have a legally binding effect on any possible future discretionary action. The activities or projects for which this funding is intended may require preparation of an environmental document in accordance with CEQA and the CEQA Guidelines. The proposed action will not foreclose review of alternatives or mitigation measures by the public as part of the environmental review process. 3.That the FY 2026-27 Funding Plan (Attachment A) is hereby approved by the City Council. 4.That the funding priorities in the FY 2025-30 Consolidated Plan are reaffirmed by the City Council. Nov. 18, 2025 Item #10 Page 5 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D 5.That the City Manager, or his designee, is authorized to release and distribute a Notice of Funding Availability for the FY 2026-27 CDBG program, accept applications for funding and process applications for review by the Housing Commission. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 18th day of November, 2025, by the following vote, to wit: AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin. NAYS: None. ABSTAIN: None. ABSENT: None. ______________________________________ KEITH BLACKBURN, Mayor ______________________________________ SHERRY FREISINGER, City Clerk (SEAL) Nov. 18, 2025 Item #10 Page 6 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D Attachment A CITY OF CARLSBAD COMMUNITY DEVELOPMENT BLOCK GRANT FUNDING PLAN & NOTICE OF FUNDING AVAILABILITY FY 2026-27 Prepared November 2025 Housing Services Division 1200 Carlsbad Village Drive Carlsbad, CA 92008 Nov. 18, 2025 Item #10 Page 7 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D 2 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM STATEMENT OF FY 2025-30 CONSOLIDATED PLAN PRIORITES AND HUD NATIONAL OBJECTIVES Community Development Objectives The City of Carlsbad Community Development Block Grant (CDBG) funds will be allocated to organizations, agencies, City Departments, or persons to implement programs or develop/improve public facilities which meet the following Consolidated Plan priorities: 1. AFFORDABLE HOUSING Provide direct benefit to individuals and families with low to moderate incomes through the provision or retention of affordable housing units in Carlsbad. 2. HOMELESSNESS Prevent and reduce homelessness by implementing proactive strategies, increasing access to shelter and housing, and providing supportive services that address the root causes of housing and employment instability, such as mental health and behavioral health services, job training, and financial literacy. 3. FAIR HOUSING Carlsbad contracts with a qualified service provider to provide fair housing services, education, and resources to the residents of Carlsbad. 4. PLANNING AND ADMINISTRATION Fund up to 20 percent of the annual CDBG award to support administration of CDBG program to ensure compliance with regulations. 5. SUPPORTIVE SERVICES Increase supportive services for vulnerable groups, such as seniors and families with low incomes, including access to services such as healthcare, transportation, and job. training. 6. FACILITIES AND INFRASTRUCTURE Provide assistance to city projects that benefit lower income households or communities by improving and providing facilities that serve their needs. Projects must demonstrate that they will serve areas of the City of Carlsbad that meet HUD requirements or provide services to eligible residents. HUD National Objectives To be eligible for funding, every CDBG-funded activity must qualify as meeting one of the three national objectives of the program. This requires that each activity, except those carried out under the basic eligibility categories of Program Administration and Planning, meet specific tests for either: Nov. 18, 2025 Item #10 Page 8 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D 3 •Benefiting low- and moderate-income persons, •Preventing or eliminating slums or blight, or •Meeting other community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community and other financial resources are not available to meet such needs. An activity that fails to meet one or more of the applicable tests for meeting a HUD national objective is in noncompliance with CDBG rules. COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FUNDING PLAN & NOTICE OF FUNDING AVAILABILITY FY 2026-27 FUNDING PLAN The City of Carlsbad is a recipient of federal Community Development Block Grant (CDBG) program funding. For FY 2026-27, the City anticipates an annual award of $534,758. The CDBG program regulates the amount of funds allocated to certain activities. Because of this, the Funding Plan provides estimates within three categories; public services, planning and administration, and facility improvements/affordable housing. Category Key Details Estimated Available Public Services (Capped at 15% of grant) • Programs directly assisting low-income households • Services carried out by non-profit agencies $ 80,214 Administration/Fair Housing (Capped at 20% of grant) • Subrecipient oversight • Compliance with federal requirements • Financial management • Fair Housing services $ 106,952 Affordable Housing/Facility Improvements •Improve facilities and infrastructure that serve low-income persons and communities • Acquisition/rehabilitation of low-income housing $ 347,592 ESTIMATED FY 2026-27 AWARD: $ 534,758 The FY 2026-27 grant amount is currently an estimate based upon the five percent reduction from the current year amount. Should the actual allocation be more or less than anticipated, adjustments will be made proportionally over each category; public services, planning/administration, and facility improvements & affordable housing. Program Income: Staff anticipates receiving program income during the fiscal year, although the exact amount and date by which funds are received is unknown. For planning purposes, all program income received during the fiscal year will be allocated as followed: -A maximum of 15 percent allocated to public services -A maximum of 20 percent allocated to program administration and fair housing Nov. 18, 2025 Item #10 Page 9 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D 4 -Remaining available program income will be distributed to existing, approved facility improvement and affordable housing activities first, before funding a new project NOTICE OF FUNDING AVAILABILITY Beginning on November 21, 2025, the City of Carlsbad will be accepting applications for eligible programs and projects. The estimated funding availability is as follows: •Fair Housing Services $30,000 •Public Services $81,214 •Facility Improvements/$347,592 Affordable Housing Below is the estimated timeline – please note that the dates are tentative and subject to change. All public meetings and review/comment periods will be publicly noticed. •Applications Available November 21, 2025 •Applications Due January 16, 2026 •Housing Commission March 2026 •City Council Public Hearing April 28, 2026 (Anticipated) The FY 2026-27 CDBG Application will be available on City Website: https://www.carlsbadca.gov/city-hall/grants-assistance/cdbg Applications due: January 16, 2025, by 5:00 p.m. housing@carlsbadca.gov *Email Submission Highly Encouraged* Paper copies may be delivered to: City of Carlsbad - Housing & Homeless Services Attn: CDBG Program 1200 Carlsbad Village Drive Carlsbad, CA, 92008 Contact: Nicole Piano-Jones, Senior Program Manager at Nicole.pianojones@carlsbadca.gov (442) 339-2191 Nov. 18, 2025 Item #10 Page 10 of 10 Docusign Envelope ID: CD0EF8E8-ED53-4D8C-904A-B5A675F98C6D AFFIDAVIT OF MAILING NOTICE OF PUBLIC HEARING TO: CITY CLERK DATE OF PUBLIC HEARING: No,te,\'Y\bvr I i ( ioi s- SUBJECT N o-h t£ dt ~lill\ 1 ·G +1:& d r~ llnJ 'TutlvH1t g f\vt1; I II VJ h ~ c ·\)0\si LOCATION : (X] 1200 Carlsbad Village Drive, Carlsbad, CA 92008 D Other: ----------------- DATE POSTED To cITY wrnsITE • Alov: &, 2~'5 DATE NOTICES MAILED TO PROPERTY OWNERS: ~N ...... i~lt~------ NUMBER MAILED: I declare under penalty of perjury under the laws of the State of California that I am employed by the City of Carlsbad and the foregoing is true and correct. [;XJoTHER 'HW)t]IJ t ·~lirJ SctvJtt/ I \I/;/ 'hlzf: > Date SENT TO FOR PUBLICATION VIA E-MAIL TO: □ Union Tribune on --- (0,-Coast Newson ID/?:,)}?,,,o2\ PUBLICATION DATE: Union Tribune ____________ _ Coast News NO\/., "J 1 ']07,/[ I declare under penalty of perjury under the laws of the State of California that I am employed by the City of Carlsbad and the foregoing is true and correct. DEPARTMENT: □ CITY CLERK'S OFFICE C:lJ OTH ER tlwis-, nq f ffi'.1M luJ SbYMU/J Date Attachments: 1} Mailing Labels 2} Notice w/ attachments . • . ' . NOTICE OF PUBLIC HEARING AND FUNDING AVAILABILITY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM NOTICE IS HEREBY GIVEN, the City Council of the City of Carlsbad will conduct a public hearing on Tuesday, Nov. 18, 2025, at 5 p.m. for the city's Community Development Block Grant (CDBG) program Fiscal Year (FY) 2026-27 (July 1, 2026 -June 30, 2027) Funding Plan and Notice of Funding Availability. The CDBG program is funded by the U.S. Department of Housing and Urban Development (HUD). The City of Carlsbad is an entitlement community and receives CDBG funds directly from HUD to address local community development needs. The City of Carlsbad requests participation from community members to develop a CDBG program that meets the needs of City's vulnerable and lower income residents. FY 2026-27 Funding Plan & Funding Availability: For FY 2026-27, the City of Carlsbad anticipates an annual grant of $534,758; of which funds are estimated to be available in the following categories: • Public Services • Administration & Fair Housing • Affordable Housing & Facility Improvements $80,214 $106,952 $347,592 Beginning on Nov. 21, 2025, the City of Carlsbad will solicit proposals for projects, activities, and programs. Applications will be available on the city website: https://www.carlsbadca.gov/city- hall/grants-assist ance/cdbg. Completed applications, including required attachments, must be submitted prior to Jan. 16, 2026. All community organizations are encouraged to submit a proposed project, or projects, for consideration by the City Council at a future public hearing. Those with interest are encouraged to attend the public hearing on Nov. 18, 2025, at 5 p.m., at Carlsbad City Hall, 1200 Carlsbad Village Drive, Carlsbad, CA 92008. Copies of the staff report will be available by Fri. Nov. 14, 2023, on the city's website: https://www.carlsbadca.gov/city- hall/meetings-agendas The meeting can be viewed online at https://www.carlsbadca.gov/city- hall/meetings-agendas. To submit comments or direct questions, please contact Nicole Piano- Jones, at (442) 339-2191, nicole.pianojones@carlsbadca.gov, or in writing, at 1200 Carlsbad Village Drive, Carlsbad, CA 92008. Persons with a disability may request an agenda packet in appropriate alternative formats as required by the Americans with Disabilities Act of 1990. Reasonable accommodations and auxiliary aids will be provided to effectively allow participation in the meeting. Please contact the City Manager's Office at 442-339-2821 (voice}, 711 (free relay service for TTY users}, 760-720- 9461 (fax) or manager@carlsbadca.gov by noon on the Monday before the meeting to make arrangements. PUBLISH: Friday, November 7, 2025 CITY OF CARLSBAD CITY COUNCIL Nicole Piano-Jones, Senior Program Manager Housing & Homeless Services Oct. 17, 2023 1 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM FY 2026-27 Funding Plan Nicole Piano-Jones, Senior Program Manager Housing & Homeless Services Nov. 18, 2025 ITEM 10: CDBG PROGRAM TODAY’S PRESENTATION •Public Hearing •Community Development Block Grant (CDBG) Overview •FY 2026-27 Funding Plan 2 CDBG OVERVIEW •City of Carlsbad entitlement grantee •Administered by Housing & Urban Development (HUD) •Annual grant ~ $500,000 •Requirements include planning and public participation ITEM 10: CDBG PROGRAM 3 ITEM 10: CDBG PROGRAM 2025-30 CONSOLIDATED PLAN Priority 1: Affordable Housing Priority 2: Homelessness Priority 3: Fair Housing Priority 4: Planning and Administration Priority 5: Supportive Services Priority 6: Facilities and Infrastructure 4 ITEM 10: CDBG PROGRAM FY 2026-27 FUNDING PLAN Annual Award $534,758 •Public Services: $80,214 (15% cap) •Admin/Fair Housing: $106,952 (20% cap) •Affordable Housing & Facilities: $347,592 (no cap) 5 ITEM 10: CDBG PROGRAM NEXT STEPS 5 Timeline •Applications November - January •Housing Commission March •Public Review April •City Council Public Hearing April ITEM 10: CDBG PROGRAM City Council a resolution; 1.Approving the FY 2026-27 CDBG funding plan and authorize notice of funding availability RECOMMENDATION 6