Santa Clarita City Council members declined Tuesday to administer $6.8 million in state rental assistance funds for eligible residents who have been impacted by the COVID-19 pandemic and let the state handle those dollars but approved creating a program for them with $6.3 million from the federal government.

The federal dollars, which the city allocated in late January as part of the U.S. Treasury Department’s $25 billion for emergency rental assistance, are intended to cover a household’s rent, rental arrears and utilities for up to a year, according to Michael Villegas, a city management analyst.

California also received rental aid funds from the Treasury Department ($2.65 billion) and the state secured the $6.8 million for Santa Clarita residents. Both the state and the federal government have separate guidelines for recipients and for states and local governments on how to use the funds for residents.

Council members voted not to administer the $6.8 million because doing so would require the city to create a rental assistance program large enough to administer the combined $13.1 million in state and federal dollars, which “would be a significant undertaking” for the city, according to City Manager Ken Striplin who informed the City Council.

Instead, the state will administer those grant funds, and qualifying Santa Clarita residents will still be eligible for them.

“This is not a business that we are usually in. So, as we look at having to come back and put together a program within those guidelines, hire five or six staff members that would have the ability to work through the financial information to qualify people, and so forth, ensure there’s no fraud, would be a significant undertaking, especially within those guidelines,” said Striplin.

By administering only the federal funds, the city will still have to create a rental aid program for residents but under guidelines Striplin said are “a little less strict” than state requirements, meaning the city will have more time to put together said program.

Santa Clarita can already start the process of creating the program as it already has the $6.3 million, meaning there would be no delays with federal funds. There would be “significant delays” with the state’s $6.8 million, however, because they must ensure there are no duplicate benefits, according to Michael Villegas, a city management analyst.

“I’d be inclined to move forward with the option where we still have the administration of the federal dollars but, ultimately, let the state administer their grants,” said Councilman Cameron Smyth, whose comments mirrored those of the rest of the council. “As much as I don’t like the idea of deferring to the state, I’m not sure we have a better option to get those grants to our residents as quickly as possible.”

Who qualifies?

To qualify, at least one or more individuals of each household must meet the following guidelines as established by the U.S. Treasury Department: experienced a reduction in household income and incurred significant costs; demonstrated a risk of experiencing homelessness or housing instability; had a household income at or below 80% of area median income (about $63,100); didn’t receive additional federally funded rental aid.

The city will be required to prioritize assistance to eligible households that have someone who has been without employment for the 90 days prior to applying for rental assistance and those with income at or below 50% of area median income (about $39,450). Funds will also be available for mobile home park residents who meet the requirements, according to City Manager Ken Striplin.

How will funds be made available?

The city is expected to start creating a rental assistance program with the parameters set out by the federal government. At least 65% of the money must be obligated by Sept. 30 and all remaining by Dec. 31, while the state has until Aug. 1 to distribute all funds, according to Villegas.