AGENDA STAFF REPORT

Agenda Item AGENDA STAFF REPORT ASR Control 22-000205
MEETING DATE:	03/22/22
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	All Districts
SUBMITTING Agency/Department:	Health Care Agency (Approved)
Department contact person(s):	Doug Becht (714) 834-5000
	Clayton Chau (714) 834-2830

Subject: Authorize Upstreaming of Emergency Rental Assistance Program to the Treasury

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

No Legal Objection

Discussion

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: N/A

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: N/A

Funding Source: N/A	County Audit in last 3 years: No

Prior Board Action: 11/02/2021 #11; 05/25/2021 #84; 01/26/2021 #S30F

RECOMMENDED ACTION(S):

Authorize the State of California Department of Housing and Community Development to administer the balance of the County of Orange’s federal allocation of Emergency Rental Assistance Round 1 Program in an amount not to exceed $19,200,000.

Authorize the Health Care Agency Director or designee to execute all necessary documents to effectuate the administration of the County of Orange’s remaining allocation and shares of funds by the State of California Department of Housing and Community Development as specified in Recommended Action #1.

Authorize the Auditor-Controller to issue an electronic funds transfer and the Treasurer-Tax Collector to disburse and pay to the State of California Department of Housing and Community Development in an amount not to exceed $19,200,000 for the balance of the County of Orange’s federal allocation of Emergency Rental Assistance Round 1 program, as referenced in the Recommended Actions above.

SUMMARY:

Authorizing the State of California Department of Housing and Community Development to administer the balance of the County’s Emergency Rental Assistance allocations will increase the available funds to assist low-income households in Orange County that have experienced financial hardship during or due to the COVID-19 pandemic that have submitted applications through the State’s COVID-19 rent relief program and will provide housing stability to households in need through the provision of financial assistance for rental arrears and/or past due utility bills.

BACKGROUND INFORMATION:

The Consolidated Appropriations Act of 2021 was ratified by the U.S. Congress and approved by the U.S. Department of the Treasury’s (Treasury) administration of the Emergency Rental Assistance (ERA) Program. The ERA Program made available $25 billion to assist households that are unable to pay rent and utilities due to the COVID-19 pandemic. The ERA Program must largely be used for direct financial assistance, including rent, rental arrears, utilities costs, home energy costs, and other expenses related to housing. A maximum of 10 percent of the ERA Program may be used towards administrative costs and housing stability services, including case management. The funds are to expire on December 31, 2022. The ERA Program provided jurisdictions with a population of 200,000 or greater with a direct allocation, including cities, counties and states.

On January 26, 2021, your Honorable Board of Supervisors (Board) approved the Master Agreement for provision of Homelessness Prevention Services providing HCA the mechanism to implement the ERA Program in Orange County with three vendors that would serve as the regional provider for their respective Service Planning Areas – Pathways of Hope in the North, Volunteers of America in the Central and Family Assistance Ministries in the South. The Board also approved a Contract for Virtual Front Door and Information and Referral Services for the implementation of the ERA 1 Program.

The County of Orange (County) received a $65,576,556 in ERA Program funding on January 27, 2021, to serve the residents in Orange County at greatest risk of experiencing homelessness as a result of financial hardships due to the COVID-19 pandemic. The County’s ERA Program was to assist the entire jurisdiction, excluding the cities of Anaheim, Irvine and Santa Ana as those cities received a direct ERA allocation from the Treasury. The Health Care Agency (HCA), Office of Care Coordination (OCC), in conjunction with OC Community Resources (OCCR) and OC Social Services Agency (SSA), developed the ERA Program to be administered by the County. The program was developed after reviewing eligibility criteria, length of financial assistance allowed under the ERA Program and consideration of local priorities and needs to best serve the residents of Orange County. The County's ERA Program began taking applications on Monday, February 1, 2021.

Prior Board of Supervisors (Board) Actions:

Board Date	Contract/Amendment	Action	Term
01/26/2021	Accept ERA Round 1 Grant Award and Approve Contracts	Board Approved Grant Award and Contracts	January 26, 2021 – December 31, 2021
05/25/2021	Approve ERA Round 2 Grant Application	Board Approved Grant Application
11/02/2021	Authorize Resolution	Board Authorized resolution

The State of California (State) received $2.6 billion in Federal ERA Program funds. On January 28, 2021, the State Legislation passed the COVID-19 Tenant Relief Act – Senate Bill (SB) 91, extending eviction protections through June 30, 2021, and creating a mechanism to deploy the Federal ERA Program funds. SB 91 detailed the eligibility criteria and costs that would be allowed under the State’s COVID-19 Rent Relief Program. This plan was inclusive of the direct ERA 1 Program allocations that local jurisdictions received directly from the Treasury. In California, jurisdictions that received a direct ERA allocation from the Treasury were presented with three options to participate in the State’s ERA Program:

Option A – State Administer: Jurisdiction will participate in a centralized state program where both Federal allocation and State allocation are managed on behalf of the City or County by a Community Development Financial Institution (CDFI) partnered with the State; or
Option B – Self-Administer: Jurisdiction receives a state block grant allocation and self-administers a combined federal allocation and state block grant local program. With this option, although the local jurisdiction receives the State’s block grant, the local jurisdiction must conform its program to the State’s guidelines.
Option C – Self-Administer & State Administer Combination: A jurisdiction chooses to self-administer its federal allocation and chooses to not conform their local program to the State’s requirements. It is not eligible for a block grant. This option results in the local jurisdiction and the State operating two separate rental relief programs in the same jurisdiction. Rental Households located in their jurisdiction may still apply to the State ERA Program administered by a CDFI for a proportionate share of the state funds, but the responsibility to manage duplication of benefits will rest with the jurisdiction.

The County selected Option C: to continue to self-administer the direct federal allocation as planned while the State administers its own $70,576,264 in block grant funding allocated for the County through their program. The Office of Care Coordination coordinated two open application windows during the months of February and April 2021, and the State’s program began accepting applications on May 1, 2021.

On April 30, 2021, the Treasury provided a form letter template for grantees to request that unused ERA funds be “voluntarily reallocated.” The template form letter (Attachment A) allows grantees to select a designated recipient to receive the reallocation, including the California Department of Housing and Community Development (State HCD).

On November 2, 2021, the Board approved the upstreaming of the County’s ERA Round 2 funds, made available by the American Rescue Plan Act, to be operated and made available to Orange County tenants through the California COVID-19 Rent Relief Program. By upstreaming the County’s ERA Round 2 funds, the County continued the ramping down of the ERA Program locally and directed tenants in need of financial assistance for rental arrears and past due utility bills to the California COVID-19 Rent Relief Program. The California COVID-19 Rent Relief Program utilizes the upstream funds to provide this critical assistance directly to Orange County residents that would have been previously served by the local program. The County elected to move the funds to the state and end its local program in order to mitigate any confusion by the public about where to access the program and accelerate the disbursement of the funds to those who need it most.

As of December 31, 2021, the County’s ERA Program has ended, successfully approving 4,734 households for assistance, representing over $34.5 million in financial assistance provided to tenant households through the County’s program. This is equivalent to over 50 percent of the County’s direct ERA allocation from the Treasury. At the conclusion of the program, there was a balance of approximately $19.2 million after all eligible applicants were provided financial assistance.

The Office of Care Coordination is recommending that these remaining funds transition to the State under Option A, allowing the State to administer these funds through their program to Orange County residents. Approval of the Recommended Actions will support the County’s previous actions related to the ERA Program by upstreaming the remaining ERA Round 1 funding to the State, joining the previously upstreamed County ERA Round 2 funding. The state’s program is up and running and has demonstrated the ability to operate at the scale needed to maximize funding to support landlords and tenants in Orange County before the end of the eviction moratorium and established expenditure deadlines set forth by the Treasury.

FINANCIAL IMPACT:

Funds will be transferred from balance sheet account 100-042-9540 with no budgetary impact to HCA Budget Control 042.

STAFFING IMPACT:

N/A

REVIEWING AGENCIES:

Auditor Controller
Treasurer-Tax Collector

ATTACHMENT(S):

Attachment A - Template Form Letter