BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 2033
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Torres
VERSION: 4/19/10
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 22, 2010
SUBJECT:
Federal homelessness funding: state application for uncovered
counties
DESCRIPTION:
This bill requires the Department of Housing and Community
Development to apply for federal McKinney-Vento Homeless
Assistance Act funding by establishing a continuum of care for
rural areas of the state on or before September 1, 2011.
ANALYSIS:
Under existing federal law, known as the McKinney-Vento Homeless
Assistance Act, the United States Department of Housing and
Urban Development (HUD) administers various programs relating to
homelessness, including the Continuum of Care Program, which is
a competitive award program, designed to encourage cities and
counties to address the problems of housing and homelessness in
a coordinated and strategic fashion. The fundamental components
of a continuum of care include prevention, outreach, emergency
shelter, transitional housing, permanent housing, permanent
supportive housing, and supportive services. In order to
receive funding through the McKinney-Vento Homeless Assistance
Act, a state or local jurisdiction must develop a continuum of
care.
Forty-five counties in the state have developed their own
continuum of care or participate in a multi-jurisdictional
continuum of care that received a funding award in 2009.
Thirteen counties in the state, mostly smaller, rural counties,
are not currently covered by a continuum of care, resulting in
the loss of roughly $900,000 in possible federal funding for
AB 2033 (TORRES) Page 2
homelessness. The program authorizes a state to apply for
funding as a balance of state continuum of care that covers
geographic areas of the state not included within a community
level continuum of care.
This bill requires the Department of Housing and Community
Development (HCD) to apply for McKinney-Vento Homeless
Assistance Act funding by establishing a balance of state
continuum of care program on or before September 1, 2011. The
continuum of care must include all areas of the state that are
not currently receiving funding through a community continuum of
care and areas that choose to apply for funding as part of the
balance of state continuum of care. The bill also requires HCD,
if it fails to apply for funding, to report the reasons to the
Assembly Housing and Community Development Committee prior to
September 30, 2011.
COMMENTS:
1.Purpose of the bill . California has the largest homeless
population of any state in the country. Over 380,000 people
are homeless for some period of time during the course of each
year in California. According to the sponsor, while most
areas of the state draw down federal homeless assistance
funds, thirteen rural counties in California cannot afford to
form and manage a continuum of care and, therefore, do not
apply for these funds. By having HCD form a balance of state
continuum of care, this bill seeks to alleviate some of the
burden created by the state's deep budget cuts to safety-net
programs by bringing more California taxpayer dollars back to
the state. Thirty other states already have such balance of
state continua to cover their rural areas.
2.Other approaches . In selected cases, HUD offers free
technical assistance to states and localities to develop
continuum of care applications. HCD has requested technical
assistance to address the thirteen uncovered counties, and HUD
has contracted with the San Francisco-based non-profit
HomeBase to provide it. HomeBase met with HCD and, in
addition to a balance of state continuum of care, is looking
at a number of options, including joining uncovered counties
to existing continua of care, forming a continuum of care of
the 13 uncovered counties themselves, and having one or more
uncovered counties create their own continuum.
HomeBase is currently working with the thirteen uncovered
AB 2033 (TORRES) Page 3
counties towards implementing these various options.
According to HCD, Del Norte County intends to apply as a
single entity. The Dos Rios continuum, which previously
included Trinity, Tehama, Glenn, and Colusa Counties, has
added Plumas, Lassen and Sierra Counties. The El Dorado
County continuum has indicated that it would be willing to
incorporate Alpine County, and the Central Sierra continuum,
which currently includes Amador, Calaveras, and Tuolumne
Counties, is also considering additions. HCD has incentivized
these efforts by providing extra points towards competitive
grants under the Federal Emergency Shelter Grant Program that
it administers.
If successful, these approaches may be more effective than a
balance of state continuum in that they foster regional
cooperation, keep decision-making local, and save resources by
building on existing continua of care. Unless these
approaches work for all thirteen counties, however, there will
still be uncovered areas of the state that could benefit from
a balance of state application.
3.Cost burdens . While all parties seem interested in addressing
homelessness and maximizing California's access to federal
funds, the real issue seems to be the cost of forming,
applying for, and administering a continuum of care and who
bears it. According to the Regional Council of Rural
Counties, smaller counties have not applied due to the expense
and staff time required. Likewise, HCD states that it has
neither the staff nor the funds to undertake this "heavily
time- and dollar-intensive undertaking." This bill
effectively requires HCD to incur the expense and staff time
for any activities related to developing a continuum of care
and submitting an application that are not covered by HUD's
technical assistance.
HCD estimates that developing a continuum of care and
submitting and application will require as many as four staff
over a two to three year period at a cost of $125,000 -
$165,000 per year. In addition, HCD foresees costs for the
day-to-day management of a balance of state continuum.
As mentioned above, HUD can provide substantial technical
assistance in the creation of a continuum of care and in
developing the initial application for federal funding, which
may relieve HCD of some or much of these costs. Arguably,
local governments may be able to obtain similar technical
AB 2033 (TORRES) Page 4
assistance either through the existing HomeBase contract or on
their own, but HUD assistance is not an entitlement. It is
not clear, therefore, that such technical assistance will be
available to individual counties in the event they need to
apply on their own.
In addition to technical assistance, the Continuum of Care
Program allows grantees to use up to 6 percent of each award
to cover the costs of the application and the administration
of the grant. It is not clear why the amount available for
administration would be insufficient to cover either HCD's
costs to submit a balance of state application or a county's
costs to submit its own application, though counties have
fewer economies of scale and face the added requirement and
cost of conducting a homeless census. It is clear, however,
that the thirteen counties are not covered precisely because
both local governments and HCD believe that the costs of
administering a continuum of care outweigh the available
administrative funding. Ultimately, to serve the uncovered
counties it will require one or more of these entities either
to determine that that grant will in fact cover the costs or
to assume any additional costs themselves.
It should also be noted that, in addition to the thirteen
uncovered counties, the bill also allows any jurisdiction to
join HCD's continuum. While most jurisdictions presumably
want to maintain local control over spending decisions, in
these difficult budget times especially there may be counties
that want to shift any cost of the program to the state.
4.Arguments in opposition . HCD argues that it has neither the
staff nor the resources to establish a balance of state
continuum of care, and that it could not fulfill all the
required activities prior to the September 1, 2011 deadline in
any event. HCD states that such an effort will require two to
three years of work. In addition, HCD believes that the
$900,000 maximum amount of funding available for the thirteen
uncovered counties may not be worth the costs and effort
required to form and manage a continuum of care, especially
given that the funding is competitive and not guaranteed.
5.Technical amendment . This bill requires HCD, if it fails to
apply for funding, to report the reasons to the Assembly
Housing and Community Development Committee prior to September
30, 2011. This seems to imply that HCD has the option to not
apply, in spite of the clear language of the bill requiring it
AB 2033 (TORRES) Page 5
to do so. The committee may wish to consider an amendment to
require HCD to report to the Legislature on how it has
complied with the law.
Assembly Votes:
Floor: 70-0
Appr: 16-0
HCD: 8-0
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
June 16, 2010)
SUPPORT: Corporation for Supportive Housing (co-sponsor)
Housing California
(co-sponsor)
California Coalition for Youth
California Mental Health Directors Coalition
Regional Council of Rural Counties
OPPOSED: Department of Housing and Community Development