HAYWARD CITY COUNCIL
RESOLUTION NO. 23-______
Introduced by Council Member__________________
RESOLUTION AUTHORIZING THE TRANSFER AND APPROPRIATION OF $100,000 FROM THE GENERAL FUND TO THE COMMUNITY DEVELOPMENT BLOCK GRANT FUND (FUND 225) FOR REPAYMENT OF THE RUSSELL CITY DISTILLERY LOAN TO THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WHEREAS, in 2014 the City issued a $100,000 economic development small business loan using Community Development Block Grant (CDBG) funds to the owner of Russell City Distillery (RCD); and WHEREAS, the loan terms included a requirement that at least 51% of the staff hired and/or retained by the borrower be low- to moderate-income individuals and a requirement that the borrower report demographic information to the City, including race, ethnicity, and income level of staff hired and retained; and WHEREAS, the loan terms also included a lien on the property, ensuring that the City would be able to recover the loaned funds in the event that the borrower defaulted on the loan; and WHEREAS, RCD did not open and the CDBG requirement to hire low- to moderate-income individuals was not met; and WHEREAS, the activity failed to meet a CDBG national objective, and the City cannot meet the Department of Housing and Urban Development’s (HUD) requirements to close out the activity; and WHEREAS, since the activity cannot be completed and closed according to HUD guidelines, the City must return the funds to HUD; and WHEREAS, the City may not use program income from other loan repayments or any other CDBG funding to repay the loan to HUD; and WHEREAS, staff recommends Council authorize a loan of $100,000 from the General Fund to the CDBG Fund (Fund 225); and WHEREAS, the City has a lien on the RCD property enabling the City to recover the original loan funds and replenish the General Fund when the property is sold.
NOW THEREFORE BE IT RESOLVED that the City Council of the City of Hayward hereby approves the transfer and appropriation of a loan of $100,000 from the General Fund to the CDBG fund (Fund 225) to repay HUD for the incomplete RCD small business loan.
BE IT FURTHER RESOLVED that the City Council of Hayward hereby approves a repayment to the General Fund in the amount of $100,000, should the property be sold, and the City recovers the original loan funds.
IN COUNCIL, HAYWARD, CALIFORNIA , 2023.
ADOPTED BY THE FOLLOWING VOTE:
AYES: COUNCIL MEMBERS:
MAYOR:
NOES: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ATTEST:______________________________________
City Clerk of the City of Hayward
APPROVED AS TO FORM:
__________________________________________
City Attorney of the City of Hayward
ATTACHMENT II