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Item # 18
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
December 7, 2021
TOPIC: Second Amendment to the Emergency Rental Assistance Program Spending
Plan and Appropriation Adjustment of $9,268,716.56
AGENDA TITLE:
Approve a Second Amendment to the Emergency Rental Assistance Program Spending
Plan and Appropriate $9.2 Million in State Emergency Rental Assistance Program Funds
Allocated from the State of California Department of Housing and Community
Development and Adopt a Resolution to Enter into an Agreement with the State of
California (Non-General Fund)
RECOMMENDED ACTION
1. Approve a Second Amendment to the Emergency Rental Assistance Program
spending plan, subject to adjustment by the City Manager as needed in response to
shifting needs and priorities not to exceed the amount of funds available.
2. Direct the City Attorney to finalize and authorize the City Manager to enter into
negotiations, execute agreements, and approve any other required actions necessary
with various service providers, contractors, and sub-recipients, who will implement the
Second Amendment to the Emergency Rental Assistance Program spending plan,
subject to non-substantive changes approved by the City Manager and City Attorney.
3. Adopt a Resolution authorizing the City to participate in the State of California
Emergency Rental Assistance Program and authorizing the City Manager to enter into
an Agreement with the State of California for the administration of $9,268,716.56 in
new funding.
4. Approve a future appropriation adjustment recognizing an additional allocation of
Emergency Rental Assistance Program funds from the State of California Department
of Housing and Community Development in the amount of $9,268,716.56 in revenue
account and appropriating same to expenditure account. (Requires five affirmative
votes)
Second Amendment to the Emergency Rental Assistance Program Spending Plan and
Appropriation Adjustment of $9,268,716.56
December 7, 2021
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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
Second Amendment to the Emergency Rental Assistance Program Spending Plan and
Appropriation Adjustment of $9,268,716.56
December 7, 2021
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eight nonprofit service providers and the Orange County United Way, pending negotiation
of their agreements.
The City has assisted everyone who is eligible for emergency rental assistance so far and
currently has 215 applications in process (as of November 19, 2021). In total, the City
has disbursed over $21.5 million in assistance to date, including Community Development
Block Grant – Coronavirus funds (CDBG-CV), State of California Coronavirus Relief
Funds (State CARES Act Funds), ERA1 and ERA2 funds. A map of all of the residents
who have been assisted as of November 19, 2021, is attached as Exhibit 3. With the
amount of ERA2 funding remaining, the City will be able to assist everyone who has an
application in process. However, the City’s eight nonprofit service providers have been
conducting enhanced outreach and engagement to help households apply for emergency
rental assistance and the City receives over 100 applications a week from new applicants
seeking assistance. The City is actively meeting the need for emergency rental
assistance in our community and the additional $9.2 million will assist more families who
have not been served.
The City is also receiving a substantial amount of fraudulent applications. Approximately
50% of applications received each week are fraudulent. Staff have been removing
fraudulent applications each week and has also implemented the following measures to
reduce fraud, among other actions:
1) The title report for large requests is being pulled to confirm the ownership of the
rental unit.
2) Applicants are required to meet at least once in person with their assigned
nonprofit service provider to verify their identity and lease agreement.
3) If a property owner fails to participate in the program, a tenant is eligible to receive
payment directly. If the tenant becomes eligible to receive payment, the tenant is
required to pick up their check in-person and show proof of identification.
4) Additional information is being requested to verify tenants’ lease agreement (e.g.
where a tenant reports that they are paying $3,500 per month for a one-bedroom
and they are a low-income household.)
With the $9.2 million in additional funds, the City will continue to pay off 100% of the rental
arrears / past due rent for everyone who applies for assistance. The City will also
continue to proactively implement a whatever-it-takes model to prevent evictions for
tenants who owe past due rent. The City will continue to work with eight nonprofit service
providers to obligate/approve the assistance for each family assigned by the City, and the
Orange County United Way will continue to disburse funds for each family approved by
the City’s eight nonprofit service providers.
Our CARES for Tenants Program must conform to the new statutory requirements of the
State ERA2 funds. Staff is still in the process of revising the Program Guidelines,
Frequently Asked Questions (FAQs) and Flyers for the CARES for Tenants Program to
Second Amendment to the Emergency Rental Assistance Program Spending Plan and
Appropriation Adjustment of $9,268,716.56
December 7, 2021
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comply with the State’s guidelines. These program documents are subject to review and
approval by HCD. As soon as the program documents have been finalized and the
Agreement has been executed with HCD, the City will issue a press release announcing
any updates to the program to conform to the State ERA2 funds.
This Second Amendment to the ERA Program spending plan will continue to assist as
many families as possible who need assistance. This Second Amendment will also assist
all of the families who have already applied for emergency rental relief and any new
applications received by the City on an on-going basis. If the City Council decides not to
accept this $9.2 million in additional funds, these State ERA2 funds will be reallocated
outside the City and across the State of California to other residents who need emergency
rental assistance. This Second Amendment and corresponding Resolution will authorize
the City to participate in the State Emergency Rental Assistance Program and authorize
the City Manager to enter into an Agreement with the State for the administration of
$9,268,716.56 in new State ERA2 funding (Exhibit 4).
FISCAL IMPACT
Approval of the appropriation adjustment will recognize $9,268,716.56 in the Emergency
Rental Assistance Program grant revenue account (no. 17718002-52009) for expenditure
as follows:
Fiscal
Year
Accounting
Unit-
Account
Fund
Description
Accounting Unit,
Account Description Amount
FY 21-22
(Dec-June)
1771870X-
various
Emergency
Rental
Assistance
Program
State Emergency
Rental Assistance
Program 2, Various
$9,268,716.56
Total $9,268,716.56
The spending plan above is only an estimate and is subject to change.
EXHIBIT(S)
1. Staff Report from February 16, 2021
2. Staff Report from July 6, 2021
3. Map of ERA Program Assistance, As of November 19, 2021
4. Resolution
Submitted By: Steven Mendoza, Assistant City Manager
Approved By: Kristine Ridge, City Manager
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EXHIBIT 3
Resolution No. 2021-____
ROH: 12/07/21
RESOLUTION NO. 2021-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA AUTHORIZING PARTICIPATION IN THE
STATE RENTAL ASSISTANCE PROGRAM – ROUND 2
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1. The City Council of the City of Santa Ana hereby finds, determines
and declares as follows:
A.On March 11, 2021, the American Rescue Plan Act of 2021 (Pub.L. No.
117-2) (“ARPA”) was signed into law. Section 3201 of Subtitle B of Title III
of ARPA established the federal Emergency Rental Assistance Program
(“ERA2”), and authorized the direct allocation of funds to states, the District
of Columbia, units of local government, territories, and high-need grantees.
The ERA2 funds are intended to assist low-income households that have
experienced financial hardship during or due to the COVID -19 pandemic,
are unable to pay for rent and utilities, and are at risk of experiencing
homelessness or housing instability.
B.California Assembly Bill No. 832 (2021-2022 Reg. Sess.) (“AB 832”)
established the State of California’s program for administering its share of
ERA2 funds (the “State Rental Assistance Program – Round 2,” “SRA2,”
or “SRA2 Funds”). AB 832 amended Sections 50897, 50897.1, 50897.2,
50897.3, and 50897.4 of, and added Sections 50897.2.1 and 50897.3.1 to,
the Health and Safety Code. Health and Safety Code section 50897.1,
subdivision (a)(1) authorizes the Department of Housing and Community
Development (the “Department”) to administer the SRA2 Funds in
accordance with state and federal law.
C.On May 13, 2021, the City of Santa Ana (“Locality”) received an
allocation of ERA2 funds from the U.S. Department of the Treasury
(“Treasury”) (such amount, and any and all additional tranches thereof,
the Locality’s “Direct Federal Allocation – 2”).
D.Locality plans to administer its Direct Federal Allocation – 2, and
acknowledges that the Direct Federal Allocation – 2 is subject to the
requirements of ARPA and the Treasury’s interpretive guidance, and to all
such requirements as may be subsequently amended.
E.Locality desires to receive an allocation of SRA2 Funds pursuant to Health
and Safety Code section 50897.2.1, subdivision (a)(1) or (2) (this amount,
and any and all additional tranches thereof, the Locality’s “Block Grant
EXHIBIT 4
Resolution No. 2021-___
Award – 2”).
F. Locality acknowledges that every Block Grant Award – 2 is subject to state
and federal requirements, including, without limitation, the requirements of
AB 832; the Department’s State Rental Assistance Program Guidelines,
dated September 27, 2021; the relevant requirements of ARPA; the
Treasury’s interpretive guidance; and all such requirements as may be
subsequently amended (collectively, the “Round 2 Block Grant Award
Requirements”).
G. Locality further acknowledges that every Block Grant Award – 2 is subject
to the terms and conditions of a Department-approved STD 213, Standard
Agreement (“Standard Agreement”), all other documents required or
deemed necessary or appropriate UNDER STATE OR FEDERAL LAW to
allocate the Block Grant Award – 2, and all amendments thereto
(collectively, the “Round 2 Block Grant Award Documents”).
Section 2. Locality is hereby authorized and directed to accept a Block Grant
Award – 2 in a total amount not to exceed $9,268,716.56.
Section 3. Locality is hereby authorized and directed to enter into, execute,
and deliver the Round 2 Block Grant Award Documents, which shall include a Standard
Agreement in a total amount not to exceed $9,268,716.56.
Section 4. Locality is hereby authorized and directed to assume responsibility
for administering the Block Grant Award – 2 in accordance with all Round 2 Block Grant
Award Requirements.
Section 5. Kristine Ridge, City Manager, or her designee, is authorized to
execute the Round 2 Block Grant Award Documents on behalf of the Locality for
participation in the State Rental Assistance Program – Round 2.
Section 6. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
EXHIBIT 4
Resolution No. 2021-____
ADOPTED this 7th day of December, 2021.
_______________________
Vicente Sarmiento
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By:________________________
Ryan O. Hodge
Assistant City Attorney
AYES: Councilmembers ___________________________________
NOES: Councilmembers ___________________________________
ABSTAIN: Councilmembers ___________________________________
NOT PRESENT: Councilmembers ___________________________________
EXHIBIT 4
Resolution No. 2021-___
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Daisy Gomez, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2021-______ to be the original resolution adopted by the City Council of
the City of Santa Ana on December 7, 2021.
Date: ____________ ___________________________
Clerk of the Council
City of Santa Ana
EXHIBIT 4