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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: July 15, 2026
To: Honorable Mayor and City Council Members
From: Eric Levitt, City Manager
Department: Economic Development
Subject: Reallocation of $200,000 ARPA funds (American Rescue Plan Act) from the Façade Improvement Paintbrush
Program to the Entrepreneurial Resource Center (ERC)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution No. 2026-113 authorizing:
1. The reallocation of $200,000 in previously allocated ARPA fund from the Façade Improvement Paintbrush Program to the ERC; and
2. The City Manager, or designee, to sign the agreements, and any subsequent amendments, subject to the review and approval by the City Attorney as to form.
City Manager's Comments
The City Manager recommends approval of allocating $200,000 in ARPA to the ERC.
Executive Summary
This item is intended to reallocate ARPA funding from the Façade Improvement Paintbrush Program to the Entrepreneurial Resource Center in the amount of $200,000.
Background
The City of San Bernardino was awarded $77,656,407 under the American Rescue Plan Act (ARPA). The City received half of the funds in May 2021, and the remainder of the funds in May of 2022. Treasury issued the final rule for the use of the funds on January 6, 2022, providing clarification on allowable investments, but generally not expanding the list of eligible projects and programs. The City worked within the guidance, focusing on investments in Qualified Census Tracts (QCTs) and other allowable investments based on the Enumerated Use Categories as well as expenditures within the revenue loss (standard allowance) category.
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As of December 2024, Mayor and City Council had approved allocation for $77,656,407 in ARPA funds. The following summary table shows which amounts were obligated under treasury rules by December 31, 2024, year-to-date actuals and remaining balance that is required to be fully spent by December 31, 2026.
Allocation Expenditures to Date Remaining Balance
$1,000,000 $237,449 $762,551
The following table explains the proposed $200,000 and the projected remaining balance within the Façade Improvement Paintbrush Program that is required to be fully spent by December 31, 2026:
Item Amount
Original Paintbrush Allocation $1,000,000
Actual Expenditures $237,449
Outstanding Commitments $160,000
Total Committed/Spent $400,000
Transfer to ERC $200,000
Planned Navigation Center Transfer* $200,000
Remaining Paintbrush Balance $200,000
*Subject to separate Council action.
While Economic Development Department staff conducted internal review of the drawdowns of the Façade accounts, trends were noted that would not support the full expense of the $1,000,000. Staff had reviewed these projected balances and expect the remaining approximately $200,000 retained within the Paintbrush Program to be fully committed and expended through existing approved projects by December 31, 2026.
Discussion
As part of an Economic Development initiative, on August 2, 2023, Mayor and City Council approved allocating a total of $1,873,700.00 to the Entrepreneurial Resource Center (ERC), encompassing a partnership between the City, University Enterprises at CSUB and the Small Business Development Center (SBDC) for Entrepreneurial Development Services.
On June 5, 2024, as a continuation of the Economic Development initiatives, Mayor and City Council approved the allocation of $1,000,000.00 to the Façade Improvement “Paintbrush” Program which aims to assist small businesses with façade, or exterior improvements to their business. RPA funds were required to be obligated by December, 2024 and must be expended by December 31, 2026. Staff has reviewed reallocation with Grants Manager and the City Attorney’s Office to confirm that the transfer can be completed consistent with Treasury requirements. Through ongoing program monitoring, staff identified a portion of the funds allocated to the Façade Improvement Paintbrush Program that are not anticipated to be expended within the required timeframe. To ensure these federal funds remain available to benefit the community and are not forfeited, staff 3 4
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evaluated eligible ARPA-funded initiatives and identified the ERC as a high-performing program with the capacity to effectively utilize the remaining funds.
As of June 2026, the Façade Improvement Paintbrush Program has awarded funding to 23 businesses, resulting in total grant commitments of $400,000.00. Of those awarded projects, 14 projects have been completed and reimbursed, totaling $237,448.88 in expenditures, while 9 projects remain under construction or in various stages of completion with anticipated reimbursements totaling approximately $160,000.00. Based on the current pipeline of approved projects, staff estimates that approximately $602,551.12 of the original ARPA allocation will remain unspent prior to the December 31, 2026 federal expenditure deadline. Despite staff aggressively marketing the program through emails, social media posts, community meetings, and in person door knocking the program, the amount of eligible applications we are receiving will not allow us to spend down the funds in the required timeframe due in part to the required time for project completion, reimbursement processing, and the limited number of eligible applications currently in the program pipeline.
Of the original $1,000,000 ARPA allocation for the Façade Improvement Paintbrush Program, approximately $400,000 has been expended or committed to existing projects.
This action reallocates $200,000 to the Entrepreneurial Resource Center (ERC). Based on current program projections, staff anticipates recommending a separate Council action to reallocate an additional $200,000 to the Navigation Center. The remaining approximately $200,000 is expected to remain within the Paintbrush Program to complete existing project commitments. Staff is confident, leaving the remaining approximately $200,000 within the Paintbrush Program enabling them to continue outreach efforts, and being able to work with approximately 9-10 additional businesses to award funds to. The Economic Development Department wants to try to help as many businesses as possible, leaving some funds available in the Paintbrush Program would allow staff to continue working with those additional businesses and reallocate funds we know wouldn’t be spent by the deadline.
Since opening in November 2023, the ERC has demonstrated significant success in supporting local entrepreneurs and small businesses not only within San Bernardino but across neighboring cities including Rialto, Fontana, Colton, Highland, Loma Linda, Moreno Valley and Riverside . Between November 2023 and December 2025, the ERC hosted 158 workshops, training sessions, and business support events, engaging 4,193 entrepreneurs and business owners. These efforts contributed to the retention and creation of 1,079 jobs, the launch of new businesses, and the generation of approximately $1.69 million in increased business revenues and government contracts secured by participating businesses.
The Entrepreneurial Resource Center has demonstrated its ability to successfully administer and fully expend ARPA funding in accordance with program requirements. As of June 6, 2026, all ARPA funds previously allocated to the ERC have been fully 3 4
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expended consistent with the terms of the Memorandum of Understanding and approved program activities. The successful deployment of these funds, coupled with the program's measurable economic outcomes, demonstrates the ERC's capacity to effectively utilize additional resources while maintaining compliance with federal funding requirements.
To ensure continued program operations and alignment with federal expenditure requirements, staff executed Amendment No. 1 to the MOU on June 8, 2026, extending the agreement term through December 31, 2026. This extension is consistent with the timeline originally presented to the Mayor and City Council and aligns with the ARPA expenditure deadline established by the U.S. Department of the Treasury. Concurrently, Amendment No. 2 is being presented for consideration to increase the agreement's not- to-exceed amount by an additional $200,000, allowing the ERC to continue delivering business support services while ensuring the timely expenditure of ARPA funds.
The proposed transfer of $200,000 in ARPA funding from the Façade Improvement Paintbrush Program to the Entrepreneurial Resource Center represents a strategic reallocation of federal resources to a program with demonstrated performance, established administrative capacity, and a clear ability to expend funds prior to the ARPA deadline. Unlike programs that may face limitations related to project timelines or applicant demand, the ERC maintains an active pipeline of entrepreneurs and small businesses seeking assistance and has a proven track record of delivering measurable economic benefits to the community.
Approving the transfer will ensure that ARPA funds remain invested in San Bernardino rather than being forfeited due to federal expenditure deadlines. The additional funding will enable the ERC to continue providing technical assistance, business development services, workforce training, and entrepreneurial support that contribute to business growth, job creation, and long-term economic resiliency throughout the city.
Through June 30, 2026, the table below reflects the direct results of the City’s investment for those with a physical address within the City of San Bernardino:
551 One-on-One Counseling Engagements
2,438 Entrepreneurs Trained
43 New Businesses Started
92 New Jobs Created
1,063 Jobs Retained
$1,677,747.47 Increase in Sales
3 Number of Government Contracts Acquired
$137,600.00 In government contract awards
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Of the original $1,000,000 ARPA allocation for the Façade Improvement Paintbrush Program, staff is proposing to reallocate $200,000 to the ERC and an additional $200,000 to the Navigation Center, both of which have demonstrated the capacity to fully expend funds prior to the December 31, 2026 deadline. The remaining funds will continue to support the Façade Improvement Paintbrush Program and fulfill existing commitments to participating businesses. This balanced approach allows the City to maximize the impact of its ARPA investment by preserving successful economic development initiatives, supporting critical community services, and ensuring compliance with federal expenditure requirements.
Community Development and Housing is expected to bring forward a separate Council item regarding the proposed Navigation Center reallocation.
Strategic Targets and Goals
The reallocation of the American Rescue Plan Funds aligns with Key Target No. 4.
Economic Growth and Development by investing in economic development of local San Bernardino-based businesses.
Fiscal Impact
There is no General Fund fiscal impact associated with the use of American Rescue Plan funds.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California adopt Resolution No. 2026-113 authorizing:
1. The reallocation of $200,000 in previously allocated ARPA fund from the Façade Improvement Paintbrush Program to the ERC; and
2. The City Manager, or designee, to sign the agreements, and any subsequent amendments, subject to the review and approval by the City Attorney as to form; and
Attachments
Attachment 1 Resolution No. 2026-113
Attachment 2 Amendment #2 to MOU Entrepreneurial Resource Center Attachment 3 MOU Entrepreneurial Resource Center
Ward:
All Wards
Synopsis of Previous Council Actions:
October 20, 2021 Mayor and Council committed American Rescue Plan funds to eligible projects and programs and amended the 2021/22 Budget by $8,160,000.00 Resolution 2021-247.
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February 2, 2022 Mayor and Council committed American Rescue Plan funds to eligible projects and programs. Resolution 2022-26.
June 7, 2023 American Rescue Plan Act-Funded Entrepreneurial Development Services and Resource Center (All Wards) of the Mayor and City Council meeting was continued to the June 30, 2023 workshop.
June 30, 2023 At the Strategic Initiatives Workshop, Mayor and Council received an update on the ERC from staff and California State University, San Bernardino partners and the Façade
Improvement “Paintbrush” Program.
August 2, 2023 The Mayor and City Council approved execution of an MOU for the ERC.
June 5, 2024 Mayor and City Council approved the allocation of $1,000,000.00 to the Façade Improvement “Paintbrush”
Program.
September 18, 2024 Mayor and City Council received and filed an update on ARPA funds, projects, allocations, and spending to date.
CC