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First Amendment to Conditional Grant Agreement with Illumination Health + Home <br /> May 19, 2026 <br /> Page 2 <br /> Agreement. The remaining balance is for the "Final Disbursement" of 10% or $202,132 <br /> to be disbursed after the Project is complete. However, current State requirements <br /> require that HHAP Program Round 3 funds must be expended by June 30, 2026. Any <br /> unexpended funds remaining after this expenditure deadline will be subject to recapture <br /> or return to the State of California Department of Housing and Community Development <br /> (State). <br /> While construction activities remain substantially on schedule and in compliance with <br /> the Conditional Grant Agreement, Illumination Health + Home has advised the City that <br /> final project completion is dependent upon energization and utility service installation by <br /> Southern California Edison. Illumination Health + Home submitted their utility service <br /> application on February 12, 2026, and has since experienced delays related to <br /> administrative processing, resubmittals, classification reviews, and delayed assignment <br /> of an SCE planner. An SCE planner was not assigned until April 15, 2026, and several <br /> additional utility review and installation steps remain outside Illumination Health + <br /> Home's control. <br /> Because final energization is not expected to occur before June 30, 2026, the City risks <br /> losing the remaining $202,132 in HHAP Program Round 3 funds unless a First <br /> Amendment to the Conditional Grant Agreement for the Project is approved by City <br /> Council to allow for the disbursement of these funds prior to the State's expenditure <br /> deadline (Exhibit 2). The proposed First Amendment would authorize the City, in its sole <br /> and absolute discretion, to disburse remaining HHAP funds prior to June 30, 2026, for <br /> eligible reimbursable costs incurred by Illumination Health + Home and consistent with <br /> HHAP requirements. The First Amendment would authorize an exception to the existing <br /> final disbursement timing provisions before project completion in order to preserve and <br /> timely expend the remaining HHAP Program Round 3 funds before the State's June 30, <br /> 2026 expenditure deadline. <br /> Therefore, staff is recommending approval of the First Amendment to Conditional Grant <br /> Agreement to protect the City's remaining HHAP Program Round 3 allocation, preserve <br /> funding for the Project, and ensure continued progress toward expanding housing <br /> opportunities for youth and seniors experiencing homelessness in Santa Ana. The <br /> successful completion of this Project also supports the City in meeting their Housing <br /> Element goals and associated policies, and the City's 2021-2029 Regional Housing <br /> Needs Assessment goals before December 31, 2029. <br /> FISCAL IMPACT <br /> Funds for the Conditional Grant Agreement in the amount of$202,132 are budgeted <br /> and available in the Homeless Housing, Assistance, and Prevention Program Fund <br /> account as shown below for expenditure in FY 2025-26. <br /> Fiscal Accounting Fund Description Accounting Unit, Amount <br /> Year Unit-Account Account Description <br /> Homeless Housing, <br /> FY 25-26 12218717-69152 Assistance and Prevention Loans and Grants $202,132 <br /> Program Round 3 Funds <br /> Total Expenditures 1 $202,132 <br />