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HEALTH SERVICES AGENCY - Executive Director Michelle Schmidt
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Requested Action(s)
recommendation
a) AGREEMENT - Request approval and authorization for the Executive Director to sign the Memorandum of Understanding (MOU) with Pacific West, Communities, Inc., Red Bluff PSH Pacific Associates, and Central Valley Coalition for Affordable Housing, for the purpose of collaborating for the development of the Bluffs Community Housing, a Permanent Supportive Housing project in Red Bluff, California, effective 3/13/24 and shall remain in effect until all obligations of the parties under the Homekey+ Standard Agreement and this MOU have been fulfilled (Subject to receipt of required insurance documentation)
b) AGREEMENT - Request approval and authorization for the Executive Director to sign the Grant Agreement with Central Valley Coalition for Affordable Housing, a California nonprofit public benefit corporation, for the purpose of allowing the County to distribute Homekey+ Grant funds to the non-profit for the development of The Bluffs Community Housing project, effective 10/20/26 and shall remain in effect until all Homekey+ funds have been dispersed and all obligations of the parties hereunder have been fulfilled (Subject to receipt of required insurance documentation)
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Financial Impact:
The Department will be receiving Homekey+ grant funds in the amount of $11,699,991 but will be disbursing them to Central Valley Coalition for Affordable Housing. There is no impact to the General Fund.
Background Information:
In June 2022, the No Place Like Home Program (NPLH) awarded $2,721,998 in capital improvement funds to develop the Bluffs Community Housing, a permanent supportive housing project (PSH). The Plumas County Housing Authority has also awarded Project-Based Vouchers to this project. The development partners are Tehama County, Pacific West Communities (Developer), Red Bluff PSH Pacific Associates, a California Limited Partnership (Owner), and Central Valley Coalition for Affordable Housing, a California nonprofit public benefit corporation.
In April 2025, after multiple unsuccessful applications to other affordable housing programs, including the Infill Infrastructure, Multifamily Housing Program, Low-Income Housing Tax Credits, and the HOME Program, the partners applied to the Homekey+ (HK+) Gap program. The HK+ program serves individuals and families who have Behavioral Health Challenges or substance use disorder. To make the HK+ application more competitive and enable development of the project with less funding, the project partners reduced the number of apartment units from 41 to 27. The No Place Like Home program approved this project change, reducing the number of NPLH units from 15 to 13.
In February 2026, Housing Community Development (HCD) awarded the project $11,699,991 in HK+ Gap grant funds for project development. The project will consist of 26 1-bedroom units serving HK+ eligible adults, with 13 of the NPLH funds stacked on 13 of the HK+ units, and 1 on-site manager unit.
The Department issued the original Homekey+ Program Notice of Funding Availability on November 26, 2024, which was subsequently amended on January 31, 2025, August 7, 2025, and March 27, 2026. The third amendment requires that eligible applicants, cities, and counties be assigned the Payee role for currently awarded projects without an executed Standard Agreement as of the amendment's publication date. At the time, the Bluffs Community Housing project had a conditional letter of award and was working on a draft Standard Agreement with HK+ staff but did not have a signed Standard Agreement.
The project partners initiated steps to obtain a waiver by meeting several times with the HK+ staff and its Executive Team, we involved our legislative representatives, Gallager and Dahle, we reminded the HK+ staff of the fact that the project partners participated in a pre-application meeting on February 20, 2025, and reviewed the project with them in great detail, including that the Payee would be assigned to the third Co-Applicant, non-profit partner, Central Valley Coalition for Affordable Housing (CVCAH). CVCAH has years of experience and expertise in fulfilling this role. At that meeting, HK+ staff agreed to this arrangement and stated that the Standard Agreement could reflect the Payee's identity as CVCAH.
However, our efforts to obtain a waiver were unsuccessful. The project partners had to decide whether to move forward with the HK+ grant award and the development, or not to proceed. We decided to move forward with the project.
The partners want to enter into a non-financial Memorandum of Understanding (MOU), which will describe each partners role and responsibility in the project. In addition, sign a Grant Agreement between Tehama County and Central Valley Coalition for Affordable Housing. The purpose of this agreement is to allow the County to distribute HK+ grant funds to the non-profit, which will, in turn, enter into a loan agreement with the project owner, Pacific West Communities’ Limited Partnership, Red Bluff PSH Pacific Associates, to distribute the HK+ funds to them for construction of the project.
CVCAH and PWC will assist the County with all HK+ requirements, including preparing Request for Funds Draws, distributing and monitoring use of HK+ funds, reports, and assisting with any future audits.
Tehama County, Central Valley Coalition for Affordable Housing, Pacific West Communities, and Red Bluff PSH Pacific Associates, Limited Partnership have all signed HCD’s Standard Agreement, which requires each Co-Applicant to administer and use HK+ grant funds in accordance with its regulations.