TO: Honorable Mayor and Members of the City Council
THRU: Jarad Hildenbrand, City Manager
FROM: Russell Bunim, Community Development Director
1. Subject
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Acceptance of $1,000,000 in Assembly Bill 113 funding for HUB Resource Center operations and approval of First Amendment to Agreement with The HUB OC to expand services and provide for replacement modular building
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2. Summary
Resolution No. 11728 acknowledges the City’s receipt of $1,000,000 in Assembly Bill 113 (Budget Act of 2026) funding for HUB Resource Center operations and services. The First Amendment to the Agreement with The HUB OC, which operates the HUB Resource Center, incorporates the Assembly Bill 113 funding and authorizes the purchase and installation of a modular trailer/building, subject to funding eligibility and procurement requirements.
3. Recommended Action
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1. Adopt Resolution No. 11728. A Resolution of the City Council of the City of Orange authorizing receipt of funds allocated under the Budget Act of 2026 and adoption of plan for use for the HUB Resource Center.
2. Accept into the City’s revenue budget $1,000,000 in grant funds from the Budget Act of 2026 to 412-6001-43201-256013.
3. Appropriate $1,000,000 from revenue account 412-6001-43201-256013 to 412-6431-55999-256013.
4. Approve First Amendment to Agreement with The HUB OC increasing compensation by $1,000,000 in Assembly Bill 113 funding and revising the scope of work to include the purchase of a modular building or trailer; and authorize the Mayor and City Clerk to execute on behalf of the City.
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4. Fiscal Impact
The expense for this amendment is $1,000,000 and will be funded through State Funding - HCD (Fund 412):
412-6431-55999-256013 Other Prof/Technical Services
5. Strategic Plan Goals
Goal 3: Enhance Quality of Life Through City Services
6. Discussion and Background
Original Agreement and Scope of Work
The City of Orange previously entered into an agreement with the HUB OC to operate the HUB Resource Center (HRC) and provide services to individuals experiencing homelessness. The HRC provides essential resources and supportive services to individuals experiencing homelessness and other vulnerable community members. Services include, but are not limited to, meals and food access, showers, laundry facilities, clothing distribution, and mail services. Through case management, housing navigation, and partnerships with community-based organizations, the HRC also connects participants to shelter resources, housing opportunities, medical and behavioral health services, and other supportive programs. The HRC serves as a central access point for basic needs and service connections, helping individuals work toward stabilization and housing.
On March 26, 2024, the City Council adopted Resolution No. 11534, acknowledging receipt of $3,000,000 in state funding allocated under Senate Bill 104 (SB 104), Budget Act of 2023, to support HRC operations. On June 11, 2024, the City entered into an Agreement with the HUB OC (Attachment 1) establishing parameters for the use of SB 104 funds in accordance with Section 19.564 of the Budget Act of 2023.
Assembly Bill 113 (AB 113) Funding
Section 45, Provision 3(i), of Assembly Bill 113 (AB 113), Chapter 248, Statutes of 2026, appropriated $1,000,000 to the City of Orange for operating expenditures and services associated with the HRC. The funding was secured by Assemblymember Avelino Valencia in response to a budget request submitted by Townsend Public Affairs on behalf of the City.
On October 19, 2026, the City received notification from the California Department of Housing and Community Development (HCD) that $1,000,000 in state funding was ready to be transferred to the City. HCD also confirmed that a standard agreement would not be required for the City to receive the funds. On October 21, 2026, HCD confirmed that the AB 113 funding is not subject to a specified expenditure deadline. The statutory appropriation identifies the intended purpose of the funding as supporting HRC operating expenditures and services. Accordingly, the City will administer the funds consistent with the purpose specified in AB 113 and any applicable state requirements and guidance provided by HCD.
SB 104 Funding and Replacement Trailer
The existing trailer used for HRC operations has continued to deteriorate, resulting in ongoing facility concerns. The structure has experienced active mold growth and water intrusion, necessitating mold remediation and roof repairs to address immediate health and safety concerns. Although these repairs were necessary to mitigate the immediate issues, the continued deterioration of the trailer supports the need for a longer-term replacement solution.
On October 22, 2026, staff received authorization from Assemblymember Avelino Valencia’s Office to proceed with the purchase of a modular structure or trailer. On October 26, 2026, HCD confirmed that it would not impose statutory or funding restrictions on the building, allowing the City discretion regarding its continued use and disposition. Accordingly, based on HCD’s guidance, the City would not be obligated under the funding requirements identified by HCD to continue HRC services solely because the building was purchased. If HRC services cease, the City would retain discretion to determine whether to repurpose, relocate, or dispose of the structure, subject to applicable requirements.
SB 104 funds must be expended by June 30, 2027. Given this expenditure deadline and the continued deterioration of the existing trailer, staff recommends using a portion of the existing SB 104 funds to purchase and install a replacement modular building/trailer to support HRC operations and services. The purchase and installation will be subject to applicable funding requirements and City procurement procedures.
Agreement Amendment
The proposed First Amendment to the Agreement with the HUB OC will incorporate the $1,000,000 AB 113 allocation for HRC operating expenditures and services and expand the scope of work to include the purchase and installation of a replacement modular building/trailer using existing SB 104 funds, subject to applicable funding requirements. The amendment will identify the respective funding sources and intended uses to support proper administration, expenditure tracking, and compliance with applicable requirements.
7. ATTACHMENTS
• Attachment 1 - Resolution No. 11728
• Attachment 2 - Agreement with The HUB OC
• Attachment 3 - First Amendment to Agreement with The HUB OC