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CC - CONSENT ITEM: Approval of an Amendment to the City’s Homekey Standard Agreement with the California Department of Housing and Community Development (HCD) to Include the Return of $338,320 in Grant Funds to HCD.
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Meeting Date: October 27, 2025
Contact Person/Dept.: Tevis Barnes/Housing and Human Services
Phone Number: (310) 253-5640
Fiscal Impact: Yes [] No [X] General Fund: Yes [] No [X]
Attachments: Yes [] No [X]
Public Notification: (E-Mail) Meetings and Agendas - City Council (10/22/2025)
Department Approval: Tevis Barnes, HHS Director (10/21/2025) _____________________________________________________________________
RECOMMENDATION
Staff recommends the City Council approve an amendment to the City’s Homekey Standard Agreement with the California Department of Housing and Community Development (HCD) to include the return of $338,320 in grant funds to HCD.
BACKGROUND
In March 2022, the Culver City was awarded $26,637,314 under California's Project Homekey (PHK) Round 2 to produce 74 units to provide interim and permanent supporting housing for chronically unhoused persons and 2 manager units. The City’s Standard Agreement with the California Department of Housing and Community Development (HCD) was executed in September 2022. Under the terms of the agreement, the City received $22,145,500 for capital expenditures and $3,751,814 for operating expenditures.
In October 2023, Culver City opened the dual motel repurposed project, which now provides a safe place indoors where people can find wraparound services, healing, and stabilization. Culver City started moving in clients to the Permanent Supportive Housing side in October 2023 and then moved participants into the Interim Housing side in February 2024. The City currently contracts with Exodus to provide supportive services to all Project Homekey residents.
DISCUSSION
As the City prepared to open Project Homekey, it was determined that additional office space was needed to provide essential on-site services to Project Homekey residents. To this end, one of the residential units on the Interim Housing side was converted into office space. As a result, the total number of residential units was reduced from 74 to 73.
The City is currently working with HCD to close out the grant. The City was recently notified that it needs to amend the agreement with HCD to reflect the reduction in residential units and repay $290,823 from the capital award and $47,497 from the operating award for the unit. HCD sent a letter on October 8, 2025, which states that the funds must be returned within 30 days of date of the letter. Staff has filed an appeal with HCD, but because of the deadline, staff is requesting Council approval to execute the amendment and return $338,320 in grant funding to HCD. If HCD does grant the appeal, the funds would not be returned.
FISCAL ANALYSIS
The City previously received $25,897,314 in capital and operating grant funds from HCD for Project Homekey. The $47,497 in operating grant funds have not been spent and can be returned to HCD. The $290,823 in capital grant funds have been spent and will need to be repaid by the General Fund.
The Adopted Budget for Fiscal Year 2025-2026 includes sufficient funding to repay HCD for the $47,497 in operating grant funds in Account No. 41435920.619830 (Interim Housing - Homekey - Other Contractual Services Homeless). In Fiscal Year 2024-2025, General Fund expenditures in Account No. 10135500.619830 (Interim Housing - Homekey - Other Contractual Services Homeless) were offset by other grants and $290,823 is available to be carried over to the current fiscal year for the repayment. These accounts can be found in the Housing and Human Services Department section of the budget book on pages 362-364.
ATTACHMENTS
None.
MOTIONS
That the City Council:
1. Approve an amendment to the City’s Homekey Standard Agreement with the California Department of Housing and Community Development to include the return of $338,320 in grant funds;
2. Authorize the payment of $338,320 to the California Department of Housing and Community Development;
3. Authorize the City Attorney to review/prepare the necessary agreements; and
4. Authorize the City Manager to execute such documents on behalf of the City.