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May 6, 2025
ITEM TITLE
Region Revolving Loan Fund: Approve a Memorandum of Understanding with the City of San Diego for the Operation of the San Diego Region Revolving Loan Fund
Report Number: 25-0078
Location: Citywide
Department: Economic Development
G.C. § 84308 Regulations Apply: No
Environmental Notice : The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution approving a Memorandum of Understanding with the City of San Diego for De - federalization of the San Diego Region Revolving Loan Fund.
SUMMARY
In 2002, the City of Chula Vista and the City of San Diego entered into a Memorandum of Understanding to coordinate and partner on the establishment of a Region-wide Revolving Loan Fund, consisting primarily of federal funding received from the U.S. Economic Development Administration (EDA) , a bureau of the U.S.
Department of Commerce, and supplemented with contributions from participating municipal agencies.
Pursuant to the MOU, the City of Chula Vista contributed $1 00,000 to the fund, which has since been expended in administrative costs associated with providing loans to businesses located within the City of Chula Vista.
Approval of this item would authorize the City of Chula Vista and the City of San Diego to ente r into a new Memorandum of Understanding that would subsequently allow for defederalization of the Region -wide Revolving Loan Fund through the EDA. Given that the City of Chula Vista’s original contribution of $100,0000 has been expended since the inception of the original Memorandum of Understanding in 2002, there would be no refund sought by the City of Chula Vista from the City of San Diego. The City of Chula Vista will continue P a g e | 2
to have a designated representative on the San Diego Region Revolving Loan Advisory Board until such a time that all loans have matured and reached the end of their terms.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the propos ed activity consists of a governmental fiscal/administrative activity, is not for a site -specific project , and will not result in a direct or indirect physical change in the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
In 2002, the City of Chula Vista and the City of San Diego entered into a Memorandum of Understanding to coordinate and partner on the establishment of a Region-wide Revolving Loan Fund, consisting primarily of federal funding received from the EDA , a bureau of the U.S. Department of Commerce, and supplemented with contributions from participating municipal agencies. Pursuant to the MOU, the City of Chula Vista contributed $100,000 to the fund, which has since been expended in administrative costs associated with providing loans to businesses located within the City of Chula Vista.
The Region -wide Revolving Loan Fund has provided a source of financing for businesses for more than twenty years. As funded loans are repaid, the funds become available for new loans to other businesses, thus creating a revolving loan fund. In some cases, when loans are defaulted upon or forgiven, the fund decreases thereby limiting the amount of money that can be made available to other businesses. Gu idance on the Region-wide Revolving Loan Fund is provided through the EDA.
The San Diego Region -wide Revolving Loan Fund is operated by the City of San Diego for the benefit of businesses located in both the City of San Diego and the City of Chula Vista. As a result, the City of Chula Vista has an MOU in place with the City of San Diego for administration of the fund. While the fund was originally established in 2002, it was consolidated in 2019 with grant awards and local funds contributed by the EDA and the City of San Diego. Consolidation of the fund coincided with re -naming it the San Diego Region RLF.
The City of Chula Vista’s only contribution to the fund consists of the original $100,000 made in 2002.
City of San Diego indicate s that since 2013, loans were provided to seven (7) Chula Vista businesses in the amount of $306,250, with a total of $39,937.19 written off due to businesses closures. Approval of this item would authorize the City of Chula Vista and the City of San Diego to enter into a new Memorandum of Understanding acknowledging that the City of Chula Vista’s original contribution of $100,000 has been expended in administrative costs over the 22 -year period of the fund and no grant transfer will occur to return funds to the City of Chula Vista. Subsequent to this acknowledgement, the City of San Diego will seek de-federalization of the funds through the EDA . Because the City of Chula Vista’s original contribution of $100,000 has been expended since the inception of the original Memorandum of Understanding in 2002, there would be no refund sought from the City of San Diego. The City of Chula Vista will continue to have a P a g e | 3
designated representative on the San Diego Region Revolving Loan Advisory Board until such a time that all loans have matured and reached the end of their terms.
DECISION-MAKER CONFLICT
Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There is no current -year fiscal impact associated with approval of a new Memorandum of Understanding with the City of San Diego.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact associated with approval of a new Memorandum of Understanding with the City of San Diego.
ATTACHMENTS
1. Original Memorandum of Understanding, dated January 2, 2003
2. Proposed Memorandum of Understanding between Cities of San Diego and Chula Vista Staff Contact: Kevin Pointer, Principal Economic Development Specialist Tiffany Allen, Assistant City Manager