14-H
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to adopt Resolution No. 22-11 – A Resolution approving an amendment to the Fiscal Year
2021-2022 Annual Action Plan to allocate additional Community Development Block Grant (CDBG) funds to the Small Business Start-up Loan Program; and approve an amendment to the Fiscal Year 2021-22 Operating Budget.
DATE: February 28, 2022
EXECUTIVE SUMMARY
For Fiscal Year 2021-2022, City Council approved a Small Business Start-up Loan Program in the amount of $250,000, using $120,000 of CDBG funds and $130,000 of CDBG-COVID (CDBG-CV) funds. The program provides for five loans of $50,000 each.
In November 2021, staff inquired with U.S. Department of Housing and Urban Development (HUD) if CDBG and CDBG-CV funds can be combined to make up the fifth of the five $50,000 loans. Shortly thereafter, staff was informed by HUD that combining the funds in such a way is considered a duplication of benefits and would not be allowed. Staff is recommending to amend the Fiscal Year 2021-2022 Annual Action Plan and Fiscal Year 2021-22 Operating Budget to add $30,000 to the CDBG Small Business Start-up Loan Program using unprogrammed CDBG entitlement funds that were unexpended in the past fiscal year and carried over into the current fiscal year.
RECOMMENDATION TO CITY COUNCIL
1) Adopt Resolution No. 22-11; and
2) Approve a budget amendment to increase the Small Business Start-up Loan Program allocation Account No. 900-44040-4155 by $30,000; or
3) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
Staff is proposing to allocate an additional $30,000 to the CDBG Small Business Start- up Loan Program using unprogrammed CDBG funds.
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Staff Report – Budget Amendment: FY 2021-2022 Annual Action Plan February 28, 2022
DISCUSSION
For Fiscal Year 2021-2022, City Council approved a Small Business Start-up Loan Program in the amount of $250,000, using $120,000 of CDBG funds and $130,000 of CDBG-COVID (CDBG-CV) funds. The program provides for five loans of $50,000 each.
In November 2021, staff inquired with U.S. Department of Housing and Urban Development (HUD) if CDBG and CDBG-CV funds can be combined to make up the fifth of the five $50,000 loans. Shortly thereafter, staff was informed by HUD that combining the funds in such a way is considered a “duplication of benefits” because the borrower would receive a separate loan from each funding source for the same activity/program, which is not allowed.
Staff is proposing to allocate an additional $30,000 to the CDBG Small Business Start-up Loan Program using unprogrammed CDBG funds.
The recommended program activity funding adjustments are reflected in the following table:
FY 2021-2022 CDBG Programs and Funding
Program/Activity Original Funding
Amount
Proposed New
Funding
Amount
Increase/
(Decrease)
Program Administration* $169,722 $169,722 $0
Fair Housing Services* $18,000 $18,000 $0
Volunteer Center** $115,791 $115,791 $0
Kingdom Causes Bellflower** $25,000 $25,000 $0
Section 108 Loan Repayment $506,540 $506,540 $0
Code Enforcement $291,633 $291,633 $0
Small Business Start-up
Loan Program $120,000 $150,000 $30,000
Totals: $1,246,686 $1,276,686 $30,000
ACTION PLAN AMENDMENT
Per the City’s adopted Citizen Participation Plan, the adjustment reflected in the above table do not trigger a substantial amendment; However, City Council approval is still required for any activity funding changes. Should the amendment be approved, staff will update the FY 2021-2022 Annual Action Plan to incorporate the additional CDBG funding.
ATTACHMENT
Resolution No. 22-11…………………………..………………………………………………3
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CITY OF BELLFLOWER
RESOLUTION NO. 22-11
A RESOLUTION APPROVING AN AMENDMENT TO THE
FISCAL YEAR 2021-2022 ANNUAL ACTION PLAN TO
ALLOCATE ADDITIONAL COMMUNITY DEVELOPMENT
BLOCK GRANT (CDBG) FUNDING TO THE SMALL BUSINESS
START -UP LOAN PROGRAM
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. The City has applied and received Community Development Block Grant (CDBG) funds from the Government of the United States under Title I of the Housing and Community Development Act of 1974;
B. The U.S. Department of Housing and Urban Development (HUD) is the federal agency that promulgates regulations and oversees the administration of the CDBG program;
C. The City approved the Fiscal Year 2021-2022 Annual Action Plan on April 26, 2021;
D. On February 2, 2022, HUD accepted the Fiscal Year 2021-2022 Annual Action Plan;
E. The City Council desires to add additional funds to the Small Business Start-up Loan Program.
SECTION 2. Approval. The City Council approves the Fiscal Year 2021-2022 Action Plan Amendment to increase the Small Business Start-Up Loan Program allocation by $30,000 and directs the necessary budgetary adjustment to be incorporated into the Fiscal Year 2021-2022 Operating Budget
SECTION 3. Authorizations. The City Manager, or designee, is authorized to take reasonable action needed to implement this Resolution. The City Manager, or designee, is further authorized to make minor technical modifications and/or necessary corrections to the Action Plan as required by HUD to implement this Resolution.
SECTION 4. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.
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City of Bellflower
Resolution No. 22-11
SECTION 5. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 6. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
SECTION 7. This Resolution will become effective immediately upon adoption
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 28TH DAY OF FEBRUARY 2022.
Ray Dunton, Mayor
ATTEST:
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
Karl H. Berger, City Attorney
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