Salinas committee backs substantial HUD action-plan amendment to reallocate unspent CDBG and HOME funds

The Housing & Land Use Committee on Nov. 1 recommended that the City Council approve a substantial amendment to the City of Salinas' HUD annual action plans for fiscal years 2023 through 2026, authorizing reallocation of unspent Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) funds to projects staff say are ready for immediate expenditure.

The recommendation came after a presentation by Francisco Brambilla, management analyst for the Community Development Department's housing division, who said the reallocation is necessary to meet HUD's timeliness standard and retain Salinas' entitlement status. "These adjustments are essential to maintain our standard as a HUD entitlement jurisdiction and to continue receiving annual funding," Brambilla told the committee during his presentation.

Brambilla said the city has been out of compliance with HUD's timeliness test for multiple years because of project delays tied to the COVID-19 pandemic, staff turnover and a procurement problem that delayed the Sherwood Recreation Center contract. To address the shortfall, staff proposed shifting funds from projects that will not expend before the program-year deadline to shovel-ready public improvements and rehabilitation projects that can be completed within the fiscal year.

Staff proposed moving roughly $1,060,000 from the Chinatown Neighborhood Improvements project (currently in design and not expected to expend its full allocation by April 2026) to ready-to-implement public improvements. That reallocation would increase the Alisal neighborhood sidewalk and streetlight project from about $330,000 to $950,000 and direct $440,000 toward rehabilitation of Vista De La Terraza. Brambilla said Chinatown construction funding would be restored with future CDBG funds when the project reaches construction in FY 2026—027, and that additional capital is available through an existing Chinatown capital improvement account.

On HOME funding, staff identified $4,430,000 in currently available HOME funds, including $2,480,000 previously allocated to the Republic Cafe project but unspent and $1,950,000 in uncommitted HOME funds. The staff recommendation would reallocate $2,400,000 from the Republic Cafe allocation and $1,100,000 in uncommitted HOME funds toward affordable housing projects identified through the city's NOFA (notice of funding availability) process, supporting both new construction and rehabilitation projects.

Brambilla described the required public-participation steps: a 30-day public review period that runs Oct. 18—Nov. 18 with notices published in English and Spanish, and the draft amendment available online and at city facilities. He said public feedback will be incorporated before the final submission to HUD.

Committee members pressed staff on several points including the source and fiscal-year breakdown of the uncommitted HOME funds, how Sherwood Recreation Center expenditures will remain funded despite procurement delays, and the timing for Chinatown construction. Brambilla said HOME funds referenced in the packet span multiple years (FY2023—FY2026) and that Sherwood's allocation remains but its expenditure timetable was affected by the rejected contractor agreement.

A public commenter who identified themselves as "Salinas" spoke in support and urged continued resident engagement about timeline and affordability. Remote callers experienced technical difficulties and could not be heard.

Motion and outcome: Council member Salazar moved and Council member Sandoval seconded a motion recommending City Council approve submittal of the substantial amendment to HUD, authorize reallocations to eligible projects, and authorize the city manager or designee to finalize modifications and execute related HUD documents. Roll call recorded Sandoval Aye, Salazar Yes and Chair Barajas Aye; the motion passed.

The committee's recommendation will be forwarded to the full City Council for final action.