City of Gonzales
PUBLIC WORKS / CITY ENGINEER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: April 17, 2023
FROM: Patrick Dobbins, Public Works Director/City Engineer THROUGH: Trevin W. Barber, City Manager
SUBJECT: Resolution No. 2023-14 Loan for US Department of Agriculture
RECOMMENDATION
It is recommended that the City Council Adopt Resolution 2023-14, A Resolution of the City Council of the City of Gonzales authorizing staff to submit a Formal Loan Application to the US Department of Agriculture for partial funding of the First Phase of the Community Center Project.
BACKGROUND
Design & construction of the Community Center Complex will be funded by a variety of sources including the following:
• Measure X (local sales tax) expected to provide $7,500,000 of project funding. • $5.0 M State grant for the Teen Innovation Center secured by State Senator Anna Caballero • Community Development Block Grant (CDBG FY 2022/23 and FY 2023/24) • County contribution to relocate existing library from the Gonzales Shopping Center • Two grants (Electric Vehicle Charging Station Grant from the California Energy Commission and Building Forward Library Infrastructure Grant Program)
• Capital Campaign with a $10.0M goal with current contributions totaling $5.8M Earlier this year, the City project team submitted a preapplication with the US Department of Agriculture (USDA) for a loan that would be secured by long term City revenue sources. This financing will provide for construction of the first phase of the Community Center Project. The USDA loan program is available to rural communities and offers a low interest rate as well as a long repayment period, both of which are advantageous for the city. The current interest rate is 3.75% with up to a 38-year term.
AGENDA
ITEM
15 REVIEW AND ANALYSIS
On March 15, 2023, USDA staff emailed the attached letter stating the city’s preapplication was accepted and the city was invited to submit a formal application for the $8.0M loan. The letter outlines the various documents and forms the city needs to provide for USDA staff to consider our application complete.
The city project team and USDA staff held a kick-off meeting March 21 to step through the items needed for the formal application. A follow-up meeting was held on April 5.
The formal application requires a “public meeting” be held to inform residents of the proposed project and accept comments on items such as the economic and environmental impacts, service area, project alternatives, or other issues. As the Council is aware, over the last two years staff provided updates on the Community Center Project at the following Council Meetings:
• January 17, 2023
• September 19, 2022
• August 1, 2022
• February 22, 2022
• January 18, 2022
• December 6, 2021
• November 15, 2021
• September 7, 2021
• July 6, 2021
• March 1, 2021
A Public Notice of this evening’s meeting was published in the April 5, 2023 edition of the Salinas Valley Tribune and public notices were posted at the kiosks at City Hall and the City Council chambers.
CEQA COMPLIANCE
The proposed project was deemed “exempt” from CEQA pursuant to CEQA Guidelines Section 15332 as the project constitutes “in-fill development” under the conditions described as follows:
• The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. • The proposed development occurs within city limits on a site of no more than five acres substantially surrounded by urban uses.
• The site has no value as habitat for endangered, rare, or threatened species. • Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality.
• The site can be adequately served by all required utilities and public services.
A Notice of Exemption was filed with the County Clerk on April 1, 2022. The project was also determined to have a Categorical Exclusion under NEPA.
Staff recommends that the City Council authorizes the project team to execute the attached forms and submit a Formal Loan Application to the US Department of Agriculture for partial funding of the First Phase of the Community Center Project.
How Recommendation Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: Constructing a Community Center will provide residents with a facility for a wide variety of public and private functions, recreation programs and other activities which will enhance the quality of life of Gonzales residents.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment and resources necessary to provide excellent services that enhance the quality of life of our diverse community. X Yes ____ No____ N/A
Explain: See explanation above for the Mission.
City services will be delivered in a cost-effective, respectful and friendly manner to ensure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner. X Yes ____No ____ N/A Explain: See Vision explanation above.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety Yes __X_ No ___ N/A
• Housing Yes __X No ___ N/A
• Recreation X Yes ____ No ___ N/A
• Environment X Yes ____ No ___ N/A
• Education X Yes ____ No ___ N/A
ALTERNATIVES
The city could seek other financing options for the $8.0M needed to advance the Community Center Complex Project but staff recommends pursuing the USDA loan due to the low interest rate and long repayment term.
BUDGET IMPACT
There is no budget impact to this evening’s presentation.
CONCLUSION
It is recommended that the City Council Adopt Resolution 2023-14, A Resolution of the City Council of the City of Gonzales authorizing staff to submit a Formal Loan Application to the US Department of Agriculture for partial funding of the First Phase of the Community Center Project.
Attachments:
1. Resolution No. 2023-14
2. USDA March 15, 2023, letter approving Loan Preapplication
3. USDA March 22, 2023, letter with the Formal Application Checklist
4. Equal Opportunity Agreement (Form RD 400-1)
5. Assurance Agreement (Form RD 400-4)
6. Certificate for Contracts, Grants, and Loans (Form 1940-Q, Exhibit A-1)
7. Applicant Certification of Federal Collection Policies (Form RD 1910-11)