Attachment C - Page 1 of 1
City of Norco
General Fund - Estimated Fund Balance
As of June 30, 2023
Description
Audited Fund Balance as of June 30, 2022, Restated 23,998,636 $ Total Estimated FY 2022 - 2023 Revenues - Adopted Budget 30,286,984 $ Total Estimated FY 2022 - 2023 Expenditures - Adopted Budget (27,916,596) Total Estimated FY 2022 - 2023 Estimated Revenues Over (Under) Expenditures 2,370,388 Total Estimated FY 2022 - 2023 Revenue Adjustments - Mid-Year $ (1,803,151) Total Estimated FY 2022 - 2023 Expenditure Adjustments - Mid-Year 1,588,299 Total Estimated FY 2022 - 2023 Estimated Revenues Over (Under) Expenditures (214,852) Total General Fund Estimated Fund Balance as of June 30, 2023 26,154,172 $
RESOLUTION NO. 2023-08
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NORCO, CALIFORNIA, APPROVING VARIOUS MID-YEAR AMENDMENTS TO FISCAL YEAR 2022-2023
ANNUAL OPERATING BUDGET AND AUTHORIZING CHANGES IN APPROPRIATIONS
AND REVENUES THERETO
WHEREAS, the Fiscal Year 2022-2023 annual operating budget for the City of Norco, California was adopted by the City Council on June 15, 2022; and
WHEREAS, certain revenue items listed and attached hereto have been revised to reflect estimated increases/decreases in the adopted budget (Attachment B); and WHEREAS, certain expenditure/expense items listed and attached hereto have been revised to reflect estimated increases/decreases in the adopted budget (Attachment B); and WHEREAS, these revenue and expenditure/expense changes are necessary to accurately reflect the City's estimated expenditure and revenue budget for Fiscal Year 2022-2023; and WHEREAS, the estimated year-end fund balance has been revised to include the mid-year adjustments to the budget, and is attached hereto (Attachment C); and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Norco, California, approved the budget changes listed on Attachment B.
PASSED AND ADOPTED by the City Council of the City of Norco, California, at a regular meeting held on February 15, 2023.
________________________________
Robin Grundmeyer, Mayor
City of Norco
ATTEST:
_________________________
Dana Roa, CMC, City Clerk
City of Norco
Resolution No. 2023-08, Approve Various Mid-Year Amendments FY 2022-2023
February 15, 2023
I, DANA ROA, CMC, City Clerk of the City of Norco, California, do hereby certify that the foregoing Resolution was introduced and adopted by the City Council of the City of Norco, California, at a regular meeting thereof held on February 15, 2023, by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal City of Norco, California, on February 15, 2023.
___________________________________
Dana Roa, CMC, City Clerk
City of Norco, California
Attachments:
Attachment B: FY 2022-2023 Mid-Year Budget Amendments Schedule Attachment C: Estimated Fund Balance for June 30, 2023
Measure R Citizens' Oversight
Committee
STAFF REPORT
Date: January 25, 2023 Agenda Item:
To: Honorable Chair and Commission Members
Prepared By: Lisette Free, Finance Director
Department: Finance
SUBJECT:
Fiscal Year 2022-2023 Second Quarter Measure R Budget Performance Report and MidYear Budget Review and Amendments RECOMMENDATION:
Receive and File the Fiscal Year 2022-2023 Second Quarter Measure R Budget Performance Report and Mid-year Budget Adjustments and recommend transmittal to the City Council
SUMMARY:
One of the Department’s annual goals is to timely inform the Measure R Citizen’s Committee (“Committee”) on actual operating budget results relative to Measure R’s annual adopted budget. This report provides information on how actual results through December 31, 2022, compared to the adopted budget. Any significant variances identified as a result of reviewing/analyzing the budget performance through December 31, 2022 have been recommended as a mid-year budget amendment. For the Mid-Year, total revenues are proposed to be increased by $408,000 and expenditures to decrease by $600,000.
BACKGROUND:
The Measure R Transactions and Use Tax budget for Fiscal Year 2022-2023 was approved by the Citizens' Oversight Board (COC) on April 27, 2022. The COC approved budget was subsequently adopted by the City Council on June 15, 2022. As part of revenue and expenditure reporting and monitoring program, staff has provided the Committee with quarterly budget performance reports. This report provides information as of the second quarter ended December 31, 2022. As a result of timing differences, the first six months of actual recorded data may not serve as accurate prediction of what the year-end numbers are likely to be at June 30, 2023. With this in mind, these numbers have been analyzed in conjunction with other historic and currently available data in order to identify material variances with the adopted budget.
Attachment D - Page 1 of 5
Attachment A provides a summary of revenues and expenditures for each of Measure R approved projects through December 31, 2022.
Revenues
As part of this review, transactions and use tax revenue has also been revised based on the amount received year-to-date and the estimated amount yet to be received for the remainder of the FY 2022-2023. At the beginning of the fiscal year, total Measure R revenues was estimated at $7,802,548. When the budget was developed in June and as a result of the impacts from the Coronavirus Pandemic, Measure R revenue projections were volatile over the last two years. As the health impact from the pandemic began to abate, the economic impact was also expected to stabilize. However, due to rising inflation, there were concerns that consumer spending could slow down causing key revenues such as Measure R sales tax to decline. With this in mind, the City continued to see a significant growth in Measure R transaction and use tax during FY 2021-2022. Early FY 2022-2023 data suggests that the strong growth in sales tax revenue experienced during FY 2021-2022 is continuing. So, the outlook in FY 2022-2023 is favorable as the impacts on city revenues. Through the month of October 2022, actual Measure R Transactions and Use Tax receipts totaled $2,736,898. Based on actual receipts through October 2022, staff is revising estimated revenue from $7,802,548 to $8,210,548, representing an increase of $408,000.
Expenditures
Staff has reviewed the status of the projects for FY 2022-2023 Measure R expenditures and has the following proposed expenditure adjustments resulting in a $600,0000 decrease to the Measure R budget. Staff reviewed the projects and identified the following projects that most likely will not be in construction by the end of the fiscal year.
Staff will subsequently review the projects to be included in the FY 2023-2024 Measure R budget:
• Decrease $250,000 for City Hall/Sheriff Sub-Station Improvements • Decrease $200,000 for Facilities and Maintenance Office • Decrease $80,000 for Morena Arena Emergency Bleacher Lighting • Decrease $170,000 for Nellie Weaver Hall Improvements • Decrease $35,000 for Parkridge Avenue Payment Project In addition, staff is proposing the following new and/or amendments to Measure R projects in FY 2022-2023:
• Redirect Neil Snipes Park Master Plan in the amount of $50,000 to Community Services for Citywide Recreational Programs and Facilities Assessment • Increase $235,000 for Pole Barn's Furniture, Equipment and Website Costs $62,000 Banquet/Meeting Hall: Chairs, Tables, Cart, Dance Floor, Podium, Linens
$10,000 Serving Area: Ice Maker, Refrigerator, Coffee Pot, Beverage Dispensers $3,000 Office: Desks, Workstations, Chairs
$140,000 Small Animal/Livestock Pens
$20,000 Branding/Website
Attachment D - Page 2 of 5
$235,000 Total
FISCAL IMPACT:
Attachment B provides a summary of the recommended adjustments to the FY 2022- 2023 Measure R Transactions and Use Tax Budget. Revenues are recommended to increase by $408,000 and expenditures to decrease by $600,000. The estimated available fund balance as of June 30, 2023 based on these adjustments is $4,893,036.
RELATIONSHIP TO STRATEGIC PLAN:
This item is consistent with Strategic Directive No. 3 - Economic Development and Financial Stability: Assure financial stability by expanding development efforts, diversifying revenue sources and continuing prudent financial management.
REVIEWED AND APPROVED BY:
Certified as to Availability of Funds: Lisette Free, Finance Director Approved by: Lori Sassoon, City Manager
ATTACHMENT(S):
Attachment A - 2nd Qtr Budget to Actual
Attachment B - FY 22-23 Measure R Mid-Year Report
Attachment D - Page 3 of 5
Attachment A
Revenue Description
FY 2022-2023
Approved
Budget
FY 2022-2023
Amended
Budget
FY 2022-2023
Actual as of
12/31/22
% of
Budget
Budget
Remaining
Revenues
Estimated Measure R Tax Revenues $ 7,802,548 $ 7,802,548 $ 2,736,898 35% (5,065,650) $ Investment Earnings 64,914 64,914 17,319 27% (47,595)
Total Revenues $ 7,867,462 $ 7,867,462 $ 2,754,217 35% (5,113,245) $ Expenditures
Total
Approved
Project
FY 2022-2023
Approved
Budget
FY 2022-2023
Amended
Budget
Prior
Expenditures
as of 06/30/22
FY 2022-2023
Encumbrances
as of 12/31/22
FY 2022-2023
Actual
Expenditures
as of 12/31/22
Total
Expenditures
as of 12/31/22
% of
Budget
Budget
Remaining
Operating and Maintenance
Trail System Maintenance $ 567,000 $ 567,000 $ - $ 344,858 $ 172,429 $ 517,287 91% $ 49,713 Committee Stipends 1,400 1,400 - - - - 0% 1,400
Professional Services 10,000 10,000 - - 6,150 6,150 62% 3,850 Subtotal 578,400 578,400 344,858 - 178,579 523,437 90% 54,963 Measure R Capital Projects
Facilities Improvements
City Hall Remodel - Efficiency Assessment 54303.10 $ 100,000 $ 100,000 $ 100,000 $ - $ 26,550 $ - $ 26,550 27% $ 73,450 City Hall/Sheriff Sub-Station Improvements 54303.2 562,206 500,000 499,295 62,911 24,172 21,151 108,234 9% 453,972 Citywide ADA Assessment 54300.2 400,000 396,770 396,770 3,230 - 9,948 13,178 3% 386,822 Citywide Facility Painting & Treating 54303.8 250,000 100,000 134,173 115,827 - - 115,827 0% 134,173 Citywide Flooring 54303.9 250,000 250,000 250,000 - - - - 0% 250,000 Facilities and Maintenance Office 54303.11 300,000 300,000 300,000 - - - - 0% 300,000 Moreno Arena Emergency Bleacher Lighting 54111.5 100,000 100,000 100,000 - 14,900 - 14,900 15% 85,100 Moreno Arena Sound System 54410.2 154,882 130,000 154,882 - - 524 524 0% 154,358 Nellie Weaver Hall Improvements 54303.6 539,000 408,710 446,110 92,890 45,272 6,538 144,700 12% 394,301 Pole Barn IT Infrastructure 54111.6 200,000 200,000 200,000 - - - - 0% 200,000 Pole Barns 54410.1 3,540,190 3,227,284 2,648,233 891,957 2,308,947 29,950 3,230,854 88% 309,336 Security System Upgrade 54303.12 60,000 60,000 60,000 - 18,410 - 18,410 31% 41,590 Land Improvements
Animal Control, Parmenter & Wayne Makin Parking Lots 54111.2 301,557 150,000 153,945 147,612 - 3,073 150,685 2% 150,873 Citywide Irrigation System Upgrades 54111.3 420,000 420,000 420,000 - - - 0% 420,000 - Wayne Makin/Shearer Master Plan 54111.4 2,500,000 2,500,000 2,500,000 - 6,000 - 6,000 0% 2,494,000 Park Improvements
Cityside Park Enhancements 54410.5 510,000 504,240 504,240 5,760 - - 5,760 0% 504,240 Neal Snipes Park Master Plan 54111.7 50,000 50,000 50,000 - - - - 0% 50,000 Street Improvements
Canyon Ridge Circle Pavement Project 54900.11 120,000 120,000 120,000 - 191 4,014 4,205 4% 115,795 Citywide Urban Forest Tree Planting Project 4108.7 82,000 49,843 34,260 47,740 25,401 9,384 82,525 102% (525) Electronic Feedback Signs 54900.12 100,000 100,000 100,000 - - - 0% 100,000 - Hillside Ave Pavement Project 54900.5 910,000 710,000 288,032 621,968 2,719 86,741 711,427 31% 198,573 Kingman Drive Pavement Project 54900.13 190,000 190,000 190,000 - 191 4,014 4,205 2% 185,795 Oak Ridge Circle Pavement Project 54900.14 130,000 130,000 130,000 - 191 4,014 4,205 3% 125,795 Parkridge Avenue Pavement Project 54900.15 225,000 225,000 225,000 12,669 - 20,101 32,770 15% 192,230 Queens Road Pavement Project 54600.5 100,000 100,000 100,000 - 191 4,014 4,205 4% 95,795 Rim Crest Drive Pavement Project 54900.16 400,000 400,000 400,000 - 191 4,014 4,205 1% 395,795 Second Street Pavement Project - East Side 54900.6 1,254,000 1,200,000 1,254,000 - - - 0% 1,254,000 - Shadow Canyon Circle Payment Project 54900.7 701,350 600,000 687,000 14,350 624,145 884 639,379 91% 61,971 Sixth Street Decorative LED Light Pole Project 54900.17 30,000 30,000 30,000 - - - 0% 30,000 - Third Street Pavement Project 54900.8 550,000 500,000 502,933 47,067 - 2,840 49,907 1% 500,093 Valley View Ave - Third St to Fourth St 54900.1 1,770,629 1,000,000 1,701,270 69,359 1,455,700 - 1,525,059 86% 245,570 Vista Ridge Circle Pavement Project 54900.18 130,000 130,000 130,000 - 191 4,014 4,205 3% 125,795 Woodward Avenue Pavement Project 54900.19 300,000 300,000 300,000 31,853 - 9,587 41,440 14% 258,560 Trails Improvements
Santa Ana River Trail and Trail Assessments 54600.1 201,600 201,457 201,457 143 12,458 12,601 - 6% 189,000 Trail Fencing Replacement for FY 22-23 54600.6 700,000 700,000 700,000 557,058 - 786 557,844 80% 142,156 Subtotal $ 18,132,414 $ 16,083,304 $ 16,011,600 $ 2,120,814 $ 5,167,398 $ 225,588 $ 7,513,801 34% 10,618,613 $ Total Expenditures $ 16,661,704 $ 16,590,000 $ 2,120,814 $ 5,512,256 $ 404,167 $ 8,037,238 36% 10,673,576 $ FY 2022-2023 2nd Quarter Budget to Actual Report
Measure R Transactions and Use Tax
Attachment D - Page 4 of 5 Page 268 of 282
Attachment B
Description
FY 2022-2023
Approved
Budget
FY 2022-2023
Proposed
Adjustment
FY 2022-2023
Amended
Budget
Revenues
Estimated Measure R Tax Revenues $ 7,802,548 $ 408,000 $ 8,210,548 Investment Earnings 64,914 64,914 -
Total Revenues $ 7,867,462 $ 408,000 $ 8,275,462
Expenditures
Operating and Maintenance
Trail System Maintenance $ 567,000 $ - $ 567,000
Committee Stipends 1,400 - 1,400
Professional Services 10,000 - 10,000
Subtotal 578,400 578,400 -
Measure R Capital Projects
Facilities Improvements
City Hall Remodel - Efficiency Assessment 100,000 - 100,000 City Hall/Sheriff Sub-Station Improvements 499,295 (250,000) 249,295 Citywide ADA Assessment 396,770 - 396,770
Citywide Facility Painting & Treating 134,173 - 134,173 Citywide Flooring 250,000 - 250,000
Facilities and Maintenance Office 300,000 (200,000) 100,000 Moreno Arena Emergency Bleacher Lighting 100,000 (80,000) 20,000 Moreno Arena Sound System 154,882 - 154,882
Nellie Weaver Hall Improvements 446,110 (170,000) 276,110 Pole Barn IT Infrastructure 200,000 - 200,000
Pole Barns 2,648,233 235,000 2,883,233
Security System Upgrade 60,000 - 60,000
Mobile Storage Unit - Special Events - 30,000 30,000
Land Improvements
Animal Control, Parmenter & Wayne Makin Parking Lots 153,945 - 153,945 Citywide Irrigation System Upgrades 420,000 - 420,000
Wayne Makin/Shearer Master Plan 2,500,000 - 2,500,000
Park Improvements
Cityside Park Enhancements 504,240 - 504,240
Neal Snipes Park Master Plan 50,000 (50,000) -
Citywide Rec Programs and Facilities Assessment - 50,000 50,000 Street Improvements
Canyon Ridge Circle Pavement Project 120,000 - 120,000
Citywide Urban Forest Tree Planting Project 34,260 - 34,260 Electronic Feedback Signs 100,000 - 100,000
Hillside Ave Pavement Project 288,032 - 288,032
Kingman Drive Pavement Project 190,000 - 190,000
Oak Ridge Circle Pavement Project 130,000 - 130,000
Parkridge Avenue Pavement Project 225,000 (35,000) 190,000 Queens Road Pavement Project 100,000 100,000 -
Rim Crest Drive Pavement Project 400,000 - 400,000
Second Street Pavement Project - East Side 1,254,000 - 1,254,000 Shadow Canyon Circle Payment Project 687,000 - 687,000
Sixth Street Decorative LED Light Pole Project 30,000 30,000 - Third Street Pavement Project 502,933 - 502,933
Valley View Ave - Third St to Fourth St 1,701,270 - 1,701,270 Vista Ridge Circle Pavement Project 130,000 - 130,000
Woodward Avenue Pavement Project 300,000 - 300,000
Trails Improvements
Santa Ana River Trail and Trail Assessments 201,457 (130,000) 71,457 Trail Fencing Replacement for FY 22-23 700,000 - 700,000 Subtotal 16,011,600 (600,000) 15,411,600
Total Expenditures $ 16,590,000 $ (600,000) $ 15,990,000 Revenues Over (Under) Expenditures $ (7,714,538)
Beginning Fund Balance, July 1, 2022 12,607,574
Estimated Ending Fund Balance, June 30, 2023 $ 4,893,036 Measure R Transactions and Use Tax
FY 2022-2023 Measure R Mid-Year Budget
Attachment D - Page 5 of 5
City Council
STAFF REPORT
Date: February 15, 2023 Agenda Item:
6.B.
To: Honorable Mayor and City Council Members
Prepared By: Lori Sassoon, City Manager
Department: City Council
SUBJECT:
Consideration of the City's Legislative Platform for 2023 RECOMMENDATION:
Adopt Resolution No. 2023-09, to approve the Legislative Platform 2023 for the City of Norco, and authorize actions in support of the platform.
SUMMARY:
The City actively participates in legislative advocacy on a variety of topics, both at the state and federal levels, around issues and priorities that impact the City of Norco. The adoption of a Legislative Platform provides a framework for that engagement during the legislative sessions.
BACKGROUND:
The City of Norco engages on a regular basis with our state and federal legislators on a wide variety of issues. The City has also retained the services of a legislative advocacy firm, Joe A. Gonsalves & Son, to work on behalf of the City specifically on state legislative matters.
In order to provide a framework for guidance on these legislative activities, the proposed Legislative Platform has been adopted for Council's consideration. The Platform establishes the City's legislative priorities, and is rooted in the City's mission, vision, and Strategic Plan. The Platform is the statement of the City's official positions on these various legislative issues for this legislative year.
Once the platform is adopted, as legislative proposals are put forward that are in support of and consistent with the City's Legislative Platform, staff can then draft letters of support for the Mayor's consideration and signature. Staff, Council Members, and our state advocacy firm may also take other actions, such as making phone calls or meeting with legislators and their staffs to discuss Norco's positions. Similarly, if there are proposals
that are in opposition to or otherwise do not support the City's Legislative Platform, letters of opposition may be drafted, and other contacts made to express the City's concerns.
The draft Legislative Platform is generally organized around the City's 2022-2026 Strategic Plan, with the addition of the overriding priority of "Local Control". The complete Legislative Platform is found in Exhibit A of the proposed Resolution. The Platform is meant to provide a general, overarching guide in these topic areas of concern and support. Over time, the Council will likely refine the platform to include additional topics.
It is anticipated that the Council will consider an updated Legislative Platform each calendar year.
The proposed resolution also authorizes the Mayor and City Manager, and their designees, to take action on behalf of the City in support of the Legislative Platform. These actions include, but are not limited to, signing letters on behalf of the City, sending emails, making telephone calls, and meeting with legislators, their staffs, and government agency officials. The City Manager will be responsible for keeping track of the City’s advocacy work, and reporting those activities to the City Council on a regular basis. The City Council will receive copies of all letters signed by the Mayor in support of or opposition to any state or federal legislative or regulatory action.
FISCAL IMPACT:
None
RELATIONSHIP TO STRATEGIC PLAN:
This action supports the City's Strategic Plan by providing a structured way in which the City will advocate for legislation that is in support of the City's Strategic Priorities, and oppose legislation that does not support those priorities.
REVIEWED AND APPROVED BY:
ATTACHMENT(S):
Resolution No. 2023-09
Legislative Platform 2023
RESOLUTION NO. 2023-09
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NORCO, CALIFORNIA, ADOPTING A LEGISLATIVE PLATFORM
FOR THE CITY OF NORCO AND AUTHORIZING ACTIONS IN
SUPPORT OF THE PLATFORM
WHEREAS, the City of Norco actively participates in legislative advocacy on a variety of topics, both at the State and Federal levels; and WHEREAS, State, Federal, and other levels of government often propose policies, programs, and regulations that can have either positive or negative impacts on the City’s mission, vision, Strategic Plan, and furtherance of our equestrian and animalkeeping lifestyle; and WHEREAS, the City often desires to take positions on proposed legislation, rulemaking, or other State or Federal actions that can require a timely response in order for the City to have its voice heard before decisions are made that will impact Norco; and WHEREAS, a Legislative Platform has been developed for 2023 that can guide those legislative advocacy actions taken by the Mayor or City Staff in furtherance of that Platform.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Norco, California, does hereby take the following actions:
1. The 2023 Legislative Platform, marked as Exhibit A to this resolution, is hereby adopted.
2. The Mayor and the City Manager, and their designees, are hereby authorized to take advocacy actions on behalf of the City of Norco in support of the City’s Legislative Platform. These actions include, but are not limited to, signing letters on behalf of the City, sending emails, making telephone calls, and meeting with legislators, their staffs, and government agency officials.
3. The City Manager will be responsible for keeping track of the City’s advocacy work, and reporting those activities to the City Council on a regular basis. The City Council will receive copies of all letters signed by the Mayor in support of or opposition to any State or Federal legislative or regulatory action.
Resolution No. 2023-09 – Adopting Legislative Platform for City of Norco
February 15, 2023
PASSED AND ADOPTED by the City Council of the City of Norco, California, at a regular meeting held on February 15, 2023.
___________________________
Robin Grundmeyer, Mayor
City of Norco, California
ATTEST:
________________________
Dana Roa, CMC, City Clerk
City of Norco, California
I, Dana Roa, CMC, City Clerk of the City of Norco, California, do hereby certify that the foregoing Resolution was introduced and adopted by the City Council of the City of Norco, California, at a regular meeting thereof held on February 15, 2023 by the following vote of the City Council:
AYES:
NOES:
ABSENT:
ABSTAIN:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Norco, California, on February 15, 2023. ________________________
Dana Roa, CMC, City Clerk
City of Norco, California
Attachment: Exhibit A - 2023 Legislative Platform
Exhibit A
City of Norco 2023 Legislative Platform
1. Overarching Priority: Local Control
a. Retain local control over all land use decision-making. b. Retain control of local revenues and how revenues are obtained and expended at the local level.
c. Advocate for equitable distribution of online sales taxes. d. Oppose any actions that seek to reduce city authority and/or increase state authority over operations of our cities.
e. Support the home rule authority of charter cities.
2. Public Health, Safety, and Wellness
a. Advocate for funds to support full undergrounding of the Riverside Transmission Reliability Project (RTRP), and oppose all efforts for RTRP construction of above ground high-voltage power lines.
b. Support collaborative efforts to provide services, shelter, and housing for homeless neighbors; advocate for federal and state funding for these programs.
c. Support public safety programs and funding for police, fire, and animal control services.
d. Advocate for the closure of the California Rehabilitation Center Norco (CRC) and adaptive reuse of the Norconian Hotel and Resort property. e. Support legislation that protects working animals, and promotes the use of working animals.
f. Strengthen traffic safety laws; promote driver education and traffic calming measures.
3. Human Capital
a. Oppose state measures and mandates that increase personnel salary, benefits, and other related costs to cities.
4. Economic Development and Financial Stability.
a. Support the development and operation of the Navy’s Technology Bridge in Norco.
b. Advocate for funding for adaptive reuse and/or historic preservation; seek the expansion of the Norconian’s designation on the National Register of Historic Places to include the entire Norconian District.
c. Support measures that promote local economic development and give cities flexible economic development tools.
d. Oppose unfunded mandates.
e. Advocate for state funds to help meet the state’s affordable and workforce housing mandates.
City of Norco 2023 Legislative Platform
5. Communication and Stakeholder Experience
a. Support measures that encourage small farms and agricultural activities. b. Advocate for the equestrian and animal-keeping lifestyles; oppose any measures that would adversely impact these lifestyles.
6. Infrastructure and Asset Management
a. Support measures to secure water resources and enhance water supply b. Advocate for funds to support recycled water infrastructure. c. Oppose any diversion of existing funding sources for street and other infrastructure maintenance.
d. Advocate for funding towards demolition and remediation for the former State sewer plant that was used by CRC, and transfer of the site (once clean) to the City for open space
City Council
STAFF REPORT
Date: February 15, 2023 Agenda Item:
6.C.
To: Honorable Mayor and City Council Members
Prepared By: Lori Sassoon, City Manager
Department: Administration
SUBJECT:
Restructuring of COVID-related Loan and Grant Programs to a new Small Enterprise Assistance Loan (SEAL) Program in support of Economic Development RECOMMENDATION:
Approve restructuring the existing COVID-related Small Business Grant and Small Enterprise Assistance Loan (SEAL) Programs into a targeted small business loan program; and the Fiscal Year (FY) 2023-2024 Budget be amended to consolidate remaining funds from these existing programs into the new program in the Special Revenue Fund.
SUMMARY:
In response to the COVID-19 pandemic, the City had previously created a small grant program and a small business loan program. At this time, it is recommended that these programs be ended, and be replaced by a new micro-loan program in support of businesses that generate sales tax and/or engage in lines of business that support the City's equestrian and agricultural lifestyles. The new loan program would be funded with remaining dollars from the prior programs.
BACKGROUND:
Over the last few years, in response to the COVID-19 pandemic, the City created two business assistance programs as follows:
• The Small Enterprise Assistance Loan (SEAL) program was approved to provide microloans of up to $20,000 to small businesses or non-profit organizations. The stated goal of the program was to help small enterprises survive during times of crisis, and/or expand their operations in more favorable economic conditions. In a series of actions, $150,000 was appropriated by the City Council from the Special Asset Revenue Fund for this program.
• The Small Business Grant program was funded with $250,000 to provide grants of up to $5,000 to local small businesses and non-profits that suffered a negative economic impact from COVID-19. This program was funded from revenues provided through the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) provision of the March 2021 American Rescue Plan Act (ARPA). These have been referred to as the “ARPA Grants”.
To date, four (4) SEAL loans have been funded, with three recent applications pending.
Forty-one (41) ARPA grants have been distributed. Most of the funds have been expended for both programs, as indicated by the following chart:
Program Appropriation Expenditures to Date Remaining Balance Available
SEAL Loan $150,000 $80,000 $70,000
(3 applications pending)
Small Business
Grant (ARPA
Grant)
$250,000 $205,000 $45,000
With the easing of the COVID-19 pandemic, staff is recommending that these programs be concluded, and the remaining funds be used to create a new SEAL program to provide microloans of up to $15,000 in accordance with the following (see 2023 SEAL Guidelines):
• Loans would be provided to existing small businesses that best fit the City’s economic development goals and vision. Those priorities include businesses that generate sales tax, and/or small businesses that are engaging in lines of business in support of the City’s agricultural and animal-keeping lifestyle, such as small cottage food purveyors, small farmers, agritourism ventures, etc. • To be eligible, the business would be required to generate at least 75% of its revenues in taxable sales to the City of Norco. Businesses that obtain most of their revenue from non-taxable activities, such as service-oriented businesses like salons, consultants, medical offices, etc., would not be eligible. • The program would support expansion or growth of these businesses, with loan payments returning to the program to create a revolving fund for these loans. • Like the current program, the new SEAL program would offer maximum flexibility to borrowers, allowing business owners to use the funds for physical improvements, such as a new façade, or for working capital. It would also keep a similar graduated interest rate schedule: 2% simple interest for the first 18 months, then 3% simple interest for months 19 through 39, and 4% simple interest for months 40 through 60. Payments and interest income will return to the program’s revolving fund.
• Monthly payments on loans would begin after six (6) months. The current program does not require or even allow for monthly payments; it requires payment in full.
The new program would provide for monthly payments, which encourages payback and financial planning. It will also provide program revenue back into the revolving fund.
• Non-profit entities would not be eligible.
As with the current SEAL program, funds will be available on a first-come/first-served basis and applications will be reviewed by a Loan Committee comprised of the City’s Economic Development Working Group, with final approval confirmed by the City Manager. To properly protect the City’s interests, all loans will be personally guaranteed by the business owners, documented by a Promissory Note.
On February 6, 2023, the Economic Development Working Group met to discuss this proposal. The group was in favor of ending the current programs and creating the new microloan program, and the focus on sales-tax generating and/or equestrian, agricultural, or animal keeping lines of business. The group also felt it was appropriate to require payments during the loan term, and suggested that staff evaluate modifications to the existing loans to allow for payments during their terms. The group did debate whether or not to make non-profits eligible for these loans, without reaching consensus; there was also discussion about whether or not previous grant recipients should be eligible for this funding. Staff is recommending that eligibility be limited to for-profit enterprises at this time, given the focus on economic development and the limited funds available.
Establishment of this permanent program will provide an ongoing source of targeted small business support that fits with the City’s major economic development goals, which are to support the agricultural, animal-keeping lifestyle in the business community, and grow the sales tax base.
As noted, three applications are pending. It is recommended that those applications be considered after the adoption of the new program.
The program could be amended by the City Council from time to time as needs and priorities shift.
FISCAL IMPACT:
It is recommended that the remaining $115,000 in loan and grant programs funding be reallocated and moved to the Special Asset Fund for the new SEAL program. The current SEAL program is held in the Special Revenue Fund, while the ARPA grant program is currently budgeted in the ARPA Fund. Approval of this use in the Special Asset Fund will require a 4/5 vote of the City Council.
RELATIONSHIP TO STRATEGIC PLAN:
This item supports the City's strategic plan goal of Economic Development and Financial Stability: Assure financial stability by expanding development efforts, diversifying revenue sources and continuing prudent financial management.
REVIEWED AND APPROVED BY:
Certified as to Availability of Funds: Lisette Free, Finance Director Approved by: Lori Sassoon, City Manager
Approved as to Form: Harper and Burns, LLC, City Attorney ATTACHMENT(S):
SEAL Guidelines 2023
1 SMALL ENTERPRISE ASSISTANCE LOAN (SEAL)
PROGRAM GUIDELINES
Revised February 2023
OVERVIEW
The City of Norco is offering financial assistance to small businesses through its Small Enterprise Assistance Loan (SEAL) Program. The program provides low-interest loans from $5,000 to $15,000 to eligible small businesses in the City of Norco to assist with physical improvements or business expansion. SEAL Program loans are meant to help support growth and expansion of businesses that are engaging in lines of business related to the City’s agricultural and animal-keeping lifestyle, and/or that generate sales tax. The SEAL Program is funded by the City of Norco and lending is subject to availability of funds, generally offered on a first-come/first-serve basis.
BUSINESS ELIGIBILITY
A qualifying business must meet the following basic requirements to be eligible for the Program:
• Maintain operations within the City of Norco
• Possess an active City of Norco business license
• Have been in continuing operation as a for-profit enterprise in Norco for at least two (2) years prior to date of application (this requirement may be waived by the Loan Committee based on special circumstances)
• Employ no more than 25 employees
In addition to these basic eligibility requirements, participation is limited to businesses that fall into one or more of the following categories:
• Category 1: Agricultural Lifestyle - The business is engaging in work that is primarily related to and supporting the City’s agricultural and animal-keeping lifestyle (small farmers, cottage food purveyors, equestrian instruction, agritourism ventures, etc.) • Category 2: Sales Tax Generation - The business’ taxable sales must equal 75% or more of its revenues, such as retailers, restaurants, and other businesses.
Businesses that generate most of their revenues from non-taxable sales, such as service businesses (salons, medical offices, consultants, etc.) are not eligible.
2 FINANCIAL CONSIDERATIONS
The following factors will be addressed by the Loan Committee when evaluating an application for a loan:
• Applicant must demonstrate an ability to repay the requested loan • To protect the City’s interests, all loans are to be personally guaranteed • Participation in other county, state or federal loan programs is not a disqualification, but the Loan Committee may consider the applicant’s existing debt service and degree of need in making a determination for funding
• Debt consolidation will not be an eligible use of funds.
TERMS AND INTEREST RATES
Loan terms are flexible:
• 18 months to 5 years (60 months)
• No prepayment penalty
• Monthly payments required after the first 6 months; payments will vary by loan amount
A graduated interest rate is applied:
• First 18 months: 2% simple interest
• Months 19-36: 3% simple interest
• Months 37-60: 4% simple interest
REQUIRED DOCUMENTATION
For an application to be considered, the following documents must be submitted:
• Completed and signed Application Form
• Copy of valid California driver’s license or state-issued identification card • Copy of valid City of Norco Business License
• Copy of Profit & Loss Statement and/or business tax returns, as well as Sales and Use Tax returns, from the previous two (2) complete calendar years and for any partial year-to-date
• Business bank statements from the most recent 12 months • Documentation (e.g. corporate bylaws, partnership agreement) specifying what person(s) in a corporation or partnership are authorized to sign documents and assume debt on behalf of the business
• Proof of business liability insurance
• Proof of workers compensation insurance, if applicable • Any additional documentation reasonably requested by the Loan Committee
INELIGIBLE BUSINESSES
The following businesses are not eligible for funding:
• Any business or activity that is not currently in compliance with applicable local, state or federal ordinances or laws
• Any national chain that is not locally franchised
3 ELIGIBLE USE OF FUNDS
Funds under this program may be used to pay for either:
• Physical improvements (e.g. façade, tenant improvements, etc.) • Business expansion
The specific uses of the funds will be considered by the Loan Committee.
EXECUTED DOCUMENTS
Approved borrowers will execute the following documents:
• Loan Agreement
• Promissory Note
• All loans will be personally guaranteed by the enterprise owner
APPLICATION
The Application Form can be downloaded from the City of Norco’s website at:
http://www.norco.ca.us/SEAL
SUBMITTAL
Applications, with all required attachments, must be submitted in one of the following ways:
• In person, during regular business hours, to the Finance Department at Norco City Hall
• Via email at [email protected]
PROCESSING
Applications will generally be processed in the order they are submitted, although the Loan Committee may consider applications based on which best align with the City’s goals and priorities for economic development. No administrative fees or processing charges are imposed. Applications will be reviewed by the Loan Committee. An email/letter will be provided to the applicant regarding the eligibility status. Successful applicants will receive funding within 30 days of approval.
LOAN COMMITTEE
The Loan Committee is comprised of Norco’s Economic Development Working Group, an advisory group that works with the City Manager to support the City of Norco’s business community. The Working Group provides lending recommendations to the City Manager, who finalizes loan approvals.