CITY HALL — Santa Monica families who are about to lose their homes should think twice before returning their keys.

City officials are preparing to launch a new program that will give financial assistance to struggling local families on the brink of homelessness, using anticipated incoming funds from the federal stimulus package.

The Homeless Prevention and Rapid Re-Housing Program will be available to residents whose household income is at or below 50 percent of area median income, which is considered to be very low to low income level, receiving temporary aid for up to 18 months.

The money can be used to pay for rent, utility bills, housing relocation, stabilization and legal services. Other purposes, including mortgage, child care, food, travel and home furnishings is forbidden.

The City Council on Tuesday authorized its staff to submit plans for the program to the U.S. Housing and Urban Development (HUD) for review and approval. Once accepted, City Hall will receive the money from HUD and begin the program, which is expected in September.

The funds, estimated to be more than $553,000, will need to be spent in three years, Julie Rusk, the human services manager for City Hall, said.

The focus of the program will be on housing families who are close to being homeless.

“We want to keep them housed,” she said.

In addition to financial assistance, the program will also include counseling and other support services.

The Santa Monica Housing Authority will process the applications for financial assistance and distribute payments to the landlords.

City officials have yet to finalize the details on the program, including how many families will be served.

“I think the goal is to do whatever we can to keep these families in their housing,” Danielle Noble, the senior administrative analyst for homeless services, said. “We can’t say for sure whether we will have 40 people or 200 people. It depends on what the need is.”

Social service agencies around the area have reported an increase in demand for assistance over the past year as families lose their jobs and homes in the recession. Councilman Kevin McKeown in February requested that city staff look into ways that City Hall could assist such families that are a check or two away from homelessness, temporarily covering the anticipated loss at the time from IOUs for state tax refunds. While the council decided to support his request, there were concerns among McKeown’s colleagues about giving out aid considering City Hall’s own troublesome economic situation.

Several representatives of locally-based Upward Bound House, which provides housing for homeless families with minor children and very-low income senior citizens, addressed the council, urging that the money from HUD be targeted for homeless families with children.

Booker Pearson, the president of the nonprofit organization, said the 2008-09 Winter Shelter Program for the Westside saw four families access services in Santa Monica last year. That number jumped to 83 this year.

“Santa Monica has a huge number of homeless families that you may not know about,” he said.

Community Court could see another year<p>

The Santa Monica Homeless Community Court, which was facing the threat of cancellation because of a lack of funding, could continue next year after city officials identified $190,000 in available stimulus block grants.

The court was founded in 2007 to give individuals a chance to clear their records of petty crimes in exchange for entering treatment and working with a case manager to access services. The program was initially funded by the county, which provided $458,000 to pay for the program for 16 months through December of last year before adding another $180,000 to extend it through June. With the economic crisis, city officials had to look elsewhere to keep the program alive.

Rusk said that most of the program will be funded through the stimulus block grant and in-kind donations for support services through various local nonprofit agencies.

She said an additional $60,000 is still needed and is hoping to work with the county to close the gap.

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