TITLE:
Receive Report and Conduct Public Hearing for Disclosure of Accomplishments and Closeout of Activities Funded by Community Development Block Grant (CDBG) 20-CDBG-12080 ISSUE:
The expenditure period for the City’s 2020 Community Development Block Grant Program (CDBG) award 20-CDBG-12080 ended on June 21, 2024. Funds in the amount of $496,981.62 have been expended and the activity is complete. Per CDBG requirements, a public hearing must be conducted before the governing body to notify the public of accomplishments funded by the grant. The 2020-CDBG grant was awarded to fund a Business Assistance Loan Program activity and General Administration. Following is a description of accomplishments resulting from the funded activities.
ANALYSIS:
In 2020, the City applied for funding for an Economic Development Program activity from the Competitive 2020 CDBG program for a Business Assistance Loan Program and General Administration and was awarded $500,000 in 2021. A Business Assistance Loan Program activity is an eligible CDBG activity and meets CDBG’s low-moderate income job creation and retention (LMJ) National Objective.
This grant funded Business Assistance loans to qualifying businesses, expenses for professional services from a contracted Business Loan consultant, and staff time related to Business Assistance loan activities and general administration of the CDBG program. The intent of the grant was to fund low-interest, flexible-term loans for businesses within City limits, where the loans result in the creation or retention of jobs. Of those jobs, at least 50% are filled by low-moderate income persons, thus ensuring that this activity benefits the predominantly low-moderate income community.
The grant was active for a three-year period from June 22, 2021 through June 21, 2024. This “regular” CDBG program was operated simultaneously with a COVID-19 Business Assistance Loan Program, which funded loans to businesses with a COVID-19 nexus, and a Microenterprise program, which funded loans to low-moderate income Microenterprise businesses. Operating multiple loan programs concurrently ensured that the City had more options available to meet the needs of individual businesses. Closeout reports will be completed separately for the other loan programs.
Prior to the award term, a Request for Proposals for a qualified loan consultant was released on October 21, 2020. Community Development Services was selected, and a contract was executed on June 1, 2021. The loan consultant assists with processing applications, completing loan documents, and loan underwriting. Throughout the grant period, funds in the amount of $399,792.00 were expended on loans; $67,503.75 were expended on consultant services; $4,685.87 were expended on staff time in support of program activities; $25,000.00 were expended on general administration of the CDBG program; and $3,018.38 was unspent and will be disencumbered. A total of 13 jobs were created and/or retained.
The following table lists the business name, loan amount, and number of jobs created and/or retained for each loan made using grant funds from this award:
Business Name
Amount Loaned
Jobs Created / Retained
Drop In Donut
$20,000
1 Noyo Electric & Solar
$70,000
2 Tall Guy Brewing
$210,000
7 Juice Me
$31,792*
1 Fort Bragg Transmission
68,000
2 *Additional $178,208 loaned under CDBG COVID-19 grant award, for total $210,000.
As these Business Assistance Loans are repaid, funds are deposited into the CDBG Program Income account, and then become available to be used for CDBG-eligible activities, as allowed by HCD. The City may either submit a Program-Income only application to HCD, or add Program Income to a Notice of Funding Availability (NOFA) application to increase the amount of funds used for a project. Following approval of the application, Program Income will be included in a three-year contract between the City and HCD, for an amount not to exceed existing and projected receipts during that time frame (currently estimated at approximately $500,000.00). Staff will be seeking direction from Council at the next meeting regarding Program Income application direction, as well as 2024 NOFA direction.
RECOMMENDED ACTION:
No specific action is required of Council. The purpose of this item is to provide a report and conduct a required Public Hearing to disclose accomplishments and closeout of activities funded by CDBG #20-CDBG-12080.
ALTERNATIVE ACTION(S):
None.
FISCAL IMPACT:
The 2020 grant project was implemented with CDBG grant funds. The 2020 grant provided General Administration funding that was adequate to cover administrative costs; any on-going administrative tasks after grant close out may be covered by the City’s CDBG grant administration funds from any active CDBG award. CDBG funding is intended to assist the low- and moderate-income population; as over 50% of the jobs created and / or retained as a result of these loans are filled by persons considered low- and moderate- income as per CDBG income limits, this meets the low-moderate job creation and retention National Objective.
CONSISTENCY:
The State CDBG mission is to improve the lives of low- and moderate-income residents through the creation and expansion of community and economic development opportunities, which supports livable communities for all residents. This mission is consistent with Fort Bragg City Council Priority Areas, established in City Council’s April 2019 Goal Setting process, including Priority Area “Jobs/Industry” (Economic Development Loans and Grants, Business Assistance Program).
IMPLEMENTATION/TIMEFRAMES:
The expenditure deadline for the 2020 grant was June 21, 2024. Final Funds Requests for the grant have been submitted to HCD. Grant close-out reports, due to CDBG within 30 days of contract expiration, will be submitted to HCD after the close-out public hearing is held. The City’s Agreement with CDBG expired on June 21, 2024. It is unclear when CDBG will authorize close-out of the City’s contract with the state because final closeout is subject to U.S. Department of Housing and Urban Development (HUD) monitoring and review of State CDBG funding allocations.
ATTACHMENTS:
Public Hearing Notice – English
Public Hearing Notice – Spanish
NOTIFICATION:
CDBG “Notify Me” Subscribers
AGENCY: City CouncilMEETING DATE: June 24, 2024DEPARTMENT: Community DevelopmentPRESENTED BY: L. PetersonEMAIL ADDRESS: [email protected]: City CouncilMEETING DATE: June 24, 2024DEPARTMENT: Community DevelopmentPRESENTED BY: L. PetersonEMAIL ADDRESS: [email protected] AGENCY: City Council
MEETING DATE: June 24, 2024
DEPARTMENT: Community Development
PRESENTED BY: L. Peterson
EMAIL ADDRESS: [email protected]
AGENCY: City Council
MEETING DATE: June 24, 2024
DEPARTMENT: Community Development
PRESENTED BY: L. Peterson
EMAIL ADDRESS: [email protected]
AGENDA ITEM SUMMARY