BOS Agenda Date June 20, 2006

County of Santa Clara
Office of the County Executive
Office of Affordable Housing

CE09 062006

Prepared by: Angelina McCormick
Senior Management Analyst

Reviewed by: Nancy Pena, Ph.D
Director, Mental Health

Department
Marjorie Matthews
Director, Office of Affordable

Housing

Submitted by: Jane Decker
Deputy County Executive
DATE:

June 20, 2006

TO:

Board of Supervisors

FROM:
Peter Kutras Jr.

County Executive
SUBJECT: Housing the Homeless Mentally 111 Fund Report

RECOMMENDED ACTION

Accept status report from the Office of Affordable Housing on the Housing the Homeless
Mentally 111 Fund.
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FISCAL IMPLICATIONS

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Board of Supewisors: Donald F. Gage. Blanca Alvarado, Pete McHugh, Jim Beall, Liz Kniss

County Executive: Peter Kutras Jr.

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BOS Agenda Date June 20, 2006

None.

CONTRACT HISTORY

Not applicable.
REASONS FOR RECOMMENDATION

The Office of Affordable Housing was directed to provide a status report on the development
of a Housing the Homeless Mentally 111 Fund, as approved by the Board of Supervisors on
January 19, 2006. Status reports were accepted by the Health and Hospital Committee on
April 5, 2006, and the Housing, Land Use,Environment and Transportation Committee on
April 20, 2006, and are attached to this transmittal. At the Board meeting the Supervisors
approved in concept the establishment of a $4 million Housing the Homeless Mentally 111
Fund, transferring $2 million in one-time revenues from the Mental Health Services Act
(MHSA)into the County's Affordable Housing Fund(AHF)and matching that sum with an
additional $2 million from the AHF. The Board of Supervisors also directed the Mental
Health Department(MHD)and the Office of Affordable Housing(OAH)to seek the advice of

experts on financing housing for the homeless mentally ill, and to prepare guidelines and a
notice of funding availability(NOFA)to assist in the development and/or securing of new
housing for the homeless mentally ill.

The Office of Affordable Housing and the Mental Health Department have been meeting
regularly to discuss administering the $4 million Housing the Homeless Mentally 111 Fund and
the release of a NOFA to occur in the fall of 2006. A panel of experts was convened on March
14, 2006, to discuss the many issues involved in allocating and spending these funds.
Participants included housing specialists from:
• San Francisco, San Mateo, and Alameda Counties who are developing plans for using
MHSA housing funds in their jurisdictions.

• The Corporation for Supportive Housing — a consultant to the State on the use of
MHSA funds for housing.

• The Office of Affordable Housing new housing development consultant.
• Director and staff members from the Mental Health Department and the Office of
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Affordable Housing.

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Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
County Executive: Peter Kutras Jr.

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BOS Agenda Date :June 20, 2006

At that meeting, the panel reviewed the MHSA Housing Toolkit prepared by the Corporation
for Supportive Housing and discussed progress in other jurisdictions for the use of MHSA
Housing funds. It was agreed that reaching the goal of housing the homeless mentally ill will
be complex and costly. A particular challenge will be to time the availability of the $4 million
capital housing funds to coincide with rental subsidies that will become available through Full
Service Partnerships administering the rent subsidies and all other funding sources.
A number of scenarios were discussed, including making the MHSA $2 million available as
rental subsidies rather than support for capital development. Another idea was to award capital
dollars only to projects that are eligible for MHSA Full Service Partnership Funds. All agreed

that both development assistance and rental subsidies (estimated to be $1,000 a month per
person) along with wrap around services, will be needed to make a housing project for
homeless mentally ill financially and practically feasible.
For the following reasons, it is advisable to wait until Fall 2006 to make capital funds

available to support the acquisition or development of new housing for the homeless mentally

ill:

The State has reviewed the County's CSS Plan and followed up with a letter outlining
changes to be made, including the request for more information about the one-time
Housing Options Plan. The County is still awaiting final approval of the plan.

The State is developing guidelines for the use of MHSA housing funds. Once these are
established, the County will be in a better position to design a housing program to
maximize the use of MHSA one-time capital funds.

The RFP process for the Full Service Partnerships is currently underway. The rental
assistance available through the Full Service Partnerships will be critical to the
feasibility of a housing project. Once rental assistance from the MHSA funds is
available, housing developers will be able to incorporate that support into their

applications for capital funding.
CONSEQUENCES OF NEGATIVE ACmONirnm 20. 2006

The Board will not receive the Officetil'.of Affordable
Housing,
Housing the Mentally 111 report,
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Board of Supetvisors: Donald F. Gage, Blanca Alvarado, Pete McHugh,Jim Beall, Liz Kniss
Count/ Executive: Peter Kutras Jr.

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BOS Agenda Date :June 20, 2006

STEPS FOLLOWING APPROVALrL

No steps for the Clerk of the Board.
ATTACHMENTS

•HHC Report
•HLUET Report

Meetiiig Date

June 20,2006

Processor name
Itc rs

umber

Kelly Wunoz
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Board of Supervisors: Donald F. Gage, Blanca Alvarado, Pete McHugh, Jim Beall, Liz Kniss
Count/ Executive; Peter Kutras Jr.
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