Item 18 - Second Amendment to the Emergency Rental Assistance Program Spending Plan

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Second Amendment to the Emergency Rental Assistance Program Spending Plan and Appropriation Adjustment of $9,268,716.56 December 7, 2021 Page 2 2 2 6 5 DISCUSSION On February 16, 2021, the City Council approved the Emergency Rental Assistance Program spending plan and appropriated $9.8 million of federal Emergency Rental Assistance (ERA) Program funds allocated to the City from the United States Department of Treasury (Exhibit 1). The source of the funds came from the Consolidated Appropriations Act of 2021 that was signed into law on December 27, 2020. These funds are referred to as ERA1 funds. On July 6, 2021, the City Council approved a First Amendment to the Emergency Rental Assistance Program spending plan and appropriated $14 million in additional federal ERA Program funds allocated to the City from the Department of Treasury (Exhibit 2). The source of these funds came from the American Rescue Plan Act of 2021 that was signed into law on March 11, 2021. These funds are referred to as ERA2 funds. These monies fund the rental assistance programs administered by the City. As a larger jurisdiction with over 200,000 in population, the City of Santa Ana is eligible to receive a block grant allocation directly from the State of California Department of Housing and Community Development (HCD), which is pass-through funding provided by the Department of Treasury, to provide additional City-administered emergency rental assistance for our residents. These funds are referred to as State ERA2 funds. Specifically, on December 27, 2020, the Consolidated Appropriations Act, 2021 was signed into law. Section 501 of Division N of the Act established the federal ERA Program and authorized the allocation of funds to states. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law. Section 3201 of Subtitle B of Title III of that Act added funding and expanded eligible uses to better address the need for rental assistance in impacted communities. The State of California bill SB 91, which became law on January 29, 2021, established the State of California’s program for administering and distributing emergency rental assistance funds (State ERA1 funds). AB 832, which became law on June 28, 2021, amended and added to that statutory scheme (State ERA2 funds). SB 91 and AB 832 allow localities of appropriate size and capability to receive a block grant allocation from HCD for purposes of administering local emergency rental assistance programs. As a result, the City is eligible to receive $9,268,716.56 in additional State ERA2 funds through a block grant allocation. Second Amendment to the ERA Program Spending Plan This Second Amendment to the ERA Program spending plan approves three general actions: 1) it recognizes and appropriates $9.2 million in additional State ERA2 funds from the State of California; 2) it conforms to the statutory requirements of this new funding; and 3) it allows staff to continue to administer ERA funds as efficiently and effectively as possible for our residents. Specifically, staff recommends allocating $7,998,384.85 to our CARES for Tenants Program that we have been administering since the beginning of the COIVD-19 pandemic in May 2020. The remaining $1,270,331.71 (13.5% of the total grant) will be allocated for the administration of the CARES for Tenants Program through