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HomeMy WebLinkAbout03/17/2003 B A K E R S F I E L D Mike Maggard, Chair Harold Hanson Mark Salvaggio Staff: Darnell Haynes BUDGET AND FINANCE COMMI'I-FEE MEETING of the City Council - City of Bakersfield ~ Monday, March 17, 2003 4:00 p.m. City Manager's Conference Room, Suite 201 Second Floor - City Hall, 1501 Truxtun Avenue, Bakersfield, CA AGENDA 1. ROLL CALL 2. ADOPT FEBRUARY 10, 2003 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. NEW BUSINESS A. Staff report and Committee recommendation on Fiscal Year 2003-04 Community Development Block Grant (CDBG), Home Investment Partnerships (HOME), and Emergency Shelter Grant (ESG) Annual Spending Plan -Kunz B. Review and Committee recommendation on Economic Development Loan Policy Guidelines -Kunz 5. COMMITTEE COMMENTS 6. ADJOURNMENT S:\Darnel~003Bud&FinCom~bf03mar17agen.doc B A K E R S F I E L D Alan ='andy., City I~af~'r '-//¢" Mike Maggard, Chair Harold Hanson Staff. Darnell W. Haynes Mark Salvaggio AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE SPECIAL MEETING Monday, February 10, 2003 · 4:00 p.m. City Manager's Conference Room - City Hall 1501 Truxtun Avenue, Bakersfield, CA 1. ROLL CALL Called to Order at 4:08 p.m. 'Present: Councilmembers Mike Maggard, Chair; and Harold Hanson Councilmember Mark Salvaggio arrived at 4:23 p.m. 2. ADOPT DECEMBER 2, 2002 AGENDA SUMMARY REPORT Adopted as submitted. 3[ PUBLIC STATEMENTS 4. NEW BUSINESS A. Staff report and Committee recommendation regarding Audit Reports for fiscal year ending June 30, 2002 · Comprehensive Annual Financial Report (CAFR) · Independent Auditors Report - Single Audit Report - Schedule of Federal Expenditures for the City of Bakersfield · Independent Auditors Report - Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan · Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield Finance Director Gregory Klimko explained the City has started implementation of the new requirements of GASB 34 (Government Accounting Standards Board), which encompasses new standards for financial reporting. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING ~~T Monday, February 10, 2003 Page - 2 - The only surprise in the audit report was a deficit in the self-insurance fund of $3.4 million. Council has already taken action to transfer $2 million from the ending General Fund balance to the Self-Insurance Fund and.to handle the remaining $1.4 million deficit over the next two fiscal years. The audit was clean and in compliance with generally accepted accounting principles. There were no significant findings for the current year in the Management Letter, Committee Member Hanson made a motion to adopt'the audit reports. The motion was unanimously approved (Committee Member Salvaggio absent for this item). B, Staff report and Committee recommendation regarding landfill closure financial plan Public Works Director Raul Rojas reported that the landfill closure project is fully funded. By fiscal year ending 2002-03 there will be $5.4 million in the Refuse Enterprise Fund to pay the City's share of the closure. The landfill closure plan is scheduled to be filed with regulatory agencies in the spring of 2003. After the State review process, which can be lengthy, construction is anticipated in late 2004. ,The Committee accepted the report (Committee Member Salvaggio absent for this item). Staff will include the report in the next General Information packet. C, Staff report and Committee recommendation regarding Solid Waste Management Program (financial implications of new County fees) Public Works Director Raul Rojas reported on the financial implications of the County's raising their landfill fees beginning FY 2003-04. For the most part, residential customers will notice an increase on their prOperty tax bill, which is a direct bill from the County. This is an increase to residents of $.5 million per year. In addition, there are approximately 120 major retailers, hospitals, malls, etc., which will .be hit the hardest with a 24% increase. These 120 businesses, as a group, will pay an increase of approximately $125,000 per year. The City may receive the complaints, as the City sends the bills to these customers. However, this billing is strictly a pass through from the City to the County. The City charges approximately $200 for hauling the compactor out to the County landfill. However, . in addition to the hauling fee, there is a per ton charge, which is going up 24% by the County's action to raise landfill fees. These business locations produce from 2 to 10 tons each per week depending on the type of business. The City will .also be affected by the increase in the per ton charge for landfill fees when City refuse trucks unload at the landfill. The increase to the City is projected to be $500,000 per year. BUDGET AND FINANCE COMMITTEE MEETING Monday, February 10, 2003 Page - 3 - The use of transfer stations where refuse trucks can unload and the refuse is hauled away by semi-trucks was discussed. However, this would not be cost effective due to the close driving distance to the County's landfill. The Committee discussed informing the businesses that will be impacted with the 24% increase beginning FY 2003-04. Staff will prepare a letter to send out to the effected businesses explaining the County's increase in landfill fees and that the billing is simply a pass through from the City to the County. The letter will include the City's efforts to protest against the increase in landfill fees. D. Discussion and Committee recommendation regarding proposed 2003 Committee meeting schedule The Committee unanimously accepted the meeting schedule with no changes at this time. 5. ADJOURNMENT The meeting adjourned at 4:35 p.m. Attendance: City Manager Alan Tandy; City Attorney Bart Thiltgen; Assistant City Manager John W. Stinson; Assistant to the City Manager Darnell Haynes; Public Works Director Raul Rojas; Finance Director Gregory Klimko; Assistant Finance Director Nelson Smith; and Solid Waste Director Kevin Barnes Others: Peter J. Rudy, KUZZ News cc: Honorable Mayor and City Council · S:\Darnell\02Budget and Finance\03febl0summary BAKERSFIELD Economic and Community Development Department MEMORANDUM ~~ ~ March 13, 2003 TO: Budget and Finance Committee FROM: Donna L. Kunz, Economic Development Director SUBJECT: CDBG, HOME, and ESG Action Plan FY 2003/04 As an Entitlement City under the U.S. Department of Housing and Urban Development (HUD), the City receives annual entitlements in order to improve Iow-income neighborhoods in our City. The City's entitlements for FY 2003/04 are: $4,003,000 for Community Development Block Grant (CDBG) funds; $1,786,088 for HOME Investment Partnership Program (HOME); and $107,000 for Emergency Shelter Program (ESG). Total available funds from HUD to improve Iow-income neighborhoods in the City of Bakersfield is $5,896,088. In order to identify eligible projects to be funded from the HUD's annual entitlements, a Notice of Funding Availability (NOFA) is sent out to non-profits, agencies and City departments for possible projects for the following year. The year a total of 33 proposals were submitted form non-profits and agencies totaling approximately $8 million requesting assistance for their projects to improve the quality of lives for Iow-income neighborhoods. In addition, City departments submitted 21 projects totaling approximately $7.3 million for activities that would improve the infrastructure in those Iow-income neighborhoods. Attached is a list of all the proposals and projects submitted for this years CDBG, HOME, and ESG funds. A public notice must be published allowing the public to comment on the proposed uses of the City's entitlement. A notice is scheduled to be published on or about March 22, 2003 with the City Council to approve the final document on April 30, 2003. After reviewing all the proposals and projects, staff has prepared a proposed budget and Action Plan FY 2003/04. Below is a summary of the proposed budget for consideration and recommendation to the City Council. S:~Action Plans~Action Plan 2003-04\B & F Action Plan memo.doc Summary of Proposed Projects for Action Plan FY 2003~2004 Project Title & Description Proposed Funding Amount Target Dates Bakersfield Rescue Mission Community Food Services CDBG - $260,000 Remodel and enlarge the kitchen, dining room from 720 scl.ft, to 3,120 scl.ft. Target Date - Winter 2004 Jefferson Park Pool Rehabilitation Improvement Project CDBG - $250,000 Rehabilitate the Jefferson Park Pool Target Date - Winter 2004 Martin Luther King, Jr. Park Breezeway Roof and Restroom Roof CDBG - $29,000 Improvement Target Date - Fall 2004 Replace the breezeway roof and the restroom roof. Martin Luther King, Jr. Park Swimming Pool Rehabilitation Project CDBG - $250,000 Rehabilitation of the Martin Luther King, Jr. swimming pool. Target Date - Winter 2004 Metropolitan Recreation Center Playground Construction Project CDBG - $80,000 Construction of a new playground for children 5-12 years of age next to the Target Date - Fall 2004 Stramler portion of the Metropolitan Recreation Center. Wayside Park Playground Improvement Project CDBG - $224,000 Make playground ecluipment handicap accessible. Target Date - Spring 2004 Pacheco #10 Area Sewer Installation (Phase IV) CDBG - $502,000 Sewer line installation in an area bordered by Pacheco Road on the north, Target Date - Fall 2004 one block east of Elysium Street on the east, Faith Avenue on the south, and one block west of Centaur Street on the west. Baker Street Streetscape Improvement Project CDBG - $251,500 Streetscape improvements on Baker Street from the railroad tracks north of Target Date - Winter 2004 Sumner Street, south to East Truxtun Avenue. 19t~ Street and Eye Streetscape Improvement Project CDBG - $313,500 Streetscape improvements on 19th Street from H Street to Eye Street and on Target Date - Spring 2004 Eye Street between 19th and 18th streets. Graffiti Removal Program CDBG - $100,000 Removal of graffiti within various Iow-income areas within the City. Target Date - Spring 2004 Bakersfield Senior Center Public Services CDBG - $50,000 Funds to help maintain services to senior citizens. Target Date - Winter 2004 Bakersfield Police Southeast Satellite Office CDBG - $85,000 Lease payments and other operational costs for a satellite office to be Target Date - Winter 2004 located at the public housing project at 1102 So. Robinson Street. Fair Housing Program Services CDBG - $90,000 Implementation of fair housing public services for qualified residents City- Target Date - Summer 2004 wide. Includes education, intake, screening, testing and mediation/conciliation. Home Access Grant Program CDBG - $70,000 Grants up to $2,500 for handicap accessibility in privately or publicly owned Target Date - Winter 2004 residential structures in neighborhoods City-wide. Service Delivery Costs for Housing Related Activities CDBG - $85,000 Staff and overhead costs directly related to carry out single-family rehabilitation activities. Acquisition and Demolition Program CDBG- $210,350 Acquisition and demolition of deteriorated structures in economically Target Date - Summer 2004 distressed areas. Business Loan Program CDBG - $304,632 Financial assistance to qualified existing private for-profit entities for Target Date - Winter 2004 acquisition and/or construction for commercial/industrial improvements within the City. Section 108 Loan Repayment for $800,000 of Public Facilities CDBG - $23,100 First years interest on a $800,000 loan for street improvements. Annual Target Date - Summer 2004 loan repayment of approximately $70,000 will start in FY 04/05 Section 108 Loan Repayment for $4.1 million of Public Facilities CDBG - $115,520 First years interest on a $4,100,000 loan to improve two swimming pools Target Date - Summer 2004 and to build a swimming pool and one career counselin~ training center. S:~,ction Plans~Action Plan 2003-04~B & F Action Plan memo.doc Project Title & Description Proposed Funding Amount Target Dates Planning and Capacity CDBG - $12,000 Eligible planning and urban/redevelopment studies consisting of all costs Target Date - Summer 2004 related to data gathering, plans, environmental analysis, and preparation of documents necessary to implement consolidated planning strategies and obJectives. General Management Oversight and Coordination CDBG - $650,398 Costs associated with overall program management, coordination, and monitoring of the CDBG pro~]ram. Indirect Costs CDBG - $125,000 Cost allocation char~les from other City departments. Public Information CDBG - $20,000 Provision of public information on federal pro~]rams and activities. Submissions of Applications for Federal Programs CDBG - $12,000 Preparation of applications for submission to HUD and other government programs. New Construction Assistance HOME - $939,175 Housing development assistance for costs associated with the acquisition Target Date - Winter 2004 for construction of affordable housing]. Downtown Infill Housing Assistance Plan HOME - $200,000 0% loans of up to $15,000 for downpayment and closing costs assistance to Target Date - Winter 2004 help Iow-income people purchase their homes. Single-Family Rehab Loan Program HOME - $400,000 Housing loans for the rehabilitation of single-family dwellings for Iow-income Target Date - Winter 2004 persons (deferred and below market rate loans). CHDO Set Aside HOME - $267,913 Loans for acquisition of dwellings for rehab and reselling to eligible Iow- Target Date - Winter 2004 income buyers. To be implemented by a Community Housing Development Organization (CHDO). HOME Administration/Planning Costs HOME - $189,000 Costs related to overall management and coordination of the HOME program. Bakersfield Homeless Center ESG - $51,000 Funding] to support operation and maintenance costs of the center. Target Date - Summer 2004 Bakersfield Rescue Mission ESG - $51,000 Funding to support operation and maintenance costs of the center. Target Date - Summer 2004 ESG Program Administration ESG - $5,000 Cost related to overall management and coordination of the ESG pro~]ram. Subtotal: CDBG $4,113,000 (Entitlement=S4,003,000; Program Income=S110,000) Subtotal: Home $1,996,088 (Entitlement=S1,786,088; Program Income=S210,000) Subtotal: ESG $107,000 (no program income) Total $6,216,088 S:~Action Plans~Action Plan 2003-04~B & F Action Plan memo.doc NON-PROFIT REQUEST FOR FUNDING FY 2003~04 Applicant Description & Location Estimated Cost HUD Recommendation Proposal Name City Funds Eligible Comments Requested Other Sources Community Development Block Grant Applications - FY 2003/04 Greenfield Union Construction of two 1,440 $638,860 Total Cost Yes Not funded School District sq.ft, modular buildings to 21% of Service Area is house a community $388,860 City in the County. Did not Greenfield Community resource center and a $100,000 Health Start apply to County. Not Partnership Project prenatal, job training $150,000 Applicant within a redev, project programs on 5 acres, area. District owned property at Has not applied to the 5600 Monitor Street County. Ward 1 Bakersfield Police Construct a 3,200 sq.ft. $143,820 Total Cost Yes Not funded Activities League. multi-purpose room to Currently has two house safe haven and after $143,820 City CDBG funded projects: Multi-purpose room school program located at FY99 $116,500 & Construction project. 301 E. 4th. Has not applied to FY02 $108,000. Funds County. not expended to date. Ward 1 Boys and Girls Club of Acquisition of a vacant $399,515 Total Cost Yes Not funded Bakersfield 22,500 sq.ft. C-1 Project will serve County commercial zoned property $384,515 City residents. The Boys and Girls to be developed as a park/ $ 15,000Applicant Has not applied to Club Park and Outdoor playground located s.w. County. Recreation Area. corner of Niles and Beale. Has not applied to County. Ward 2 Community Action Removal of two dilapidated $213,374 Total Cost Yes Not funded Partnership of Kern buildings and the Project will serve construction of one modular $213,374 City County residents. Has Friendship House located at 2424 Cottonwood not applied to County. Community Center Road. Has not applied to the Master Plan for County. Completed CDBG- Renovation & Ward 1 funded project 2002. Expansion. Bakersfield Senior Assistance to the $106,000 Total Yes Funded :$55,000 Center Inc. Bakersfield Senior Center in Operation Budget Consistent with City providing needed services Council non-profit policy Bakersfield Senior to seniors at 530 4th Street. $55,000 City Center Services $51,000 Applicant Program. Ward 1 Has not applied to County. Greater Bakersfield Acquisition assistance to Unknown Total Cost Unkn Not funded Partners in Progress. purchase 531 California for Incomplete application the start-up small business $200,000 City Carson Business incubator center to employ Center 75 jobs by 2005. Ward 1 Applicant Description & Location Estimated Cost HUD Recommendation Proposal Name City Funds Eligible Comments Requested Other Sources Mt. Elgon Corporation Install a modular building at Unknown Total Cost Unkn Not funded 425 Lakeview for a business Application withdrawn Mt. Elgon Business incubator. $62,451 City Incubator. Ward 1 Has not applied to County. Bakersfield Rescue Construction of a 2,400 $716,195 Total Cost Yes Fund $260,051 Mission (BRM) sq.ft, commercial kitchen at Has submitted the Bakersfield Rescue $260,051 City application to County. Community Food Mission facility located at $375,076 County Site within Old Town Services Project. 830 Beale Avenue. .$ 81,068 BRM Kern Project Area. Ward 2 Gurdwara Guru Angad Construction of a 9,000 $1,103,514 Total Cst No Not Funded Darbar, Inc. sq.ft, senior center to meet Not eligible as the needs of the Asian- $377,600 City proposed. Religious Darbar Senior Center Indian seniors located at $625,914 County organization the S.E. corner of Stine and $100,000 Applicant Hoskings. Has applied to Ward 7 County Community Action Planning grant to promote $32,180 Total Cost No Not Funded Partnership of Kern and implement a youth Not eligible as group volunteers $32,180 City Eligible submitted for HOME Group Work Camps under funding Program Program to rehab or repair CDBG homes occupied by Iow 3ublic income residents, services Ward 1 HOME Program Applications - FY 2003/2004 "Dean sherwood Construction of 128 ' Unknown Total Cost Unkn Not funded affordable apts. on 15.5 acre Incomplete application Sherwood Forest parcel located at Chester $800,000 City Apartments. Avenue, South Union, south of Planz Road. Ward 1 Neighborhood Construction of 60 affordable $4,964,760 Tot. Cost Yes Fund $390,000 Empowerment and apartments located on a New Construction Economic Develop. 3.47 acre parcel at West $390,000 City Columbus & San Dimas. $600,000 State HCD Ashley Brookvilla $3,400,000 Tax Senior Apartments. Ward 3 Credit $374,760 Developer equity Applicant Description & Location Estimated Cost HUD Recommendation Proposal Name City Funds Eligible Comments Requested Other Sources Good Shepherd Rehabilitation assistance for $86,000 Total Cost No Not funded Communities two existing single family Religious organization dwellings located at 1917 $33,840 City Housing Rehabilitation Canter Way and 4513 Perris Program 2003. Way that house Canterway Home developmentally disabled Perris Way Home adults. Wards 6 & 2 Housing Authority of the Construction of 52 affordable $5,630,000 Tot. Cost Yes Fund $605,000 County of Kern senor apartments located on New Construction a 2.0 acre parcel within the $605,000 City Baker Street Village Old Town Kern $5,025,000 HUD-202 Redevelopment Project Area at 1010 Kentucky. Ward 2 Emergency Shelter Grant (ESG) Applications - FY 2003/2004 .... Bethany Services, Inc.Continue to fund operational $1,428,000 Annual Yes Funded $51,000 cost of the Bakersfield Operating Budget Shelters/Services to Bakersfield Homeless Homeless Center including homeless clients Center cost of security maintenance $75,000 City & utilities at 1600 E. Truxtun. City-wide Community Action Expansion of the $63 million Annual Yes Not Funded Partnership of Kern Homeless on-line and on- Operating Budget Services only to track program that provides Homeless Clients Homeless On-Track & supportive Services to $45,256 City On-line Program homeless Families. City-wide Bakersfield Rescue Continue to fund operational $1,416,000 Annual Yes Fund $51,000 Mission (BRM) cost of the BRM including Operating Budget Shelter/Service to maintenance, utilities, and homeless clients Homeless Intervention personnel. $59,800 City Services City-wide Mickey's House of Assistance to establish a Unknown Total Cost No Not funded Restoration, Inc. residential treatment center Application not Exodus House for women released from submitted prison at 233 Clyde Street Mickey's House Ward 1 Housing Authority of Construction of a 22,600 $3.1 million Tot. Cost Yes Fund $300,000 the County of Kern sq.ft, commercial project for $200,000 Sect. '108 Section 108 $200,00 police sub station, retail 1.8 mil Private loan funding within training center, child care on $300,000 CDBG Southeast Bakersfield a 2.7 acre parcel located at $800,000 To be Project Area the So. corner of So Owens determined and E. California. Will provide job training Has not applied to County. ~.~n~=~onn'~ n.~ ~=,,~;qg request1-21-O3.doc PUBLIC FACILITIES AND IMPROVEMENTS Street Improvements Department EligibilityRecommendation/ Ward Ranking Comments Pacheco #10 Street Area Sewers - Phase IV Public Works Yes Fund $502,000 Sewer mains and laterals in the areas bounded by Centaur Street, Faith Avenue, Elysium Ward 7 Priority 1 Prior Year Funding Street, and Pacheco Road. Design completed November 2000. Funds available from FY 00 $ 35,003 previous years. ($220,000) FY01 $ 50,000 Estimated Cost - $502,000 FY02 $148,915 Casa Loma #6 Storm Drain Improvements - Phase I Public Works Yes Not Funded Catch basins, storm drain and additional sewer piping along Planz Road and Brook Ward 1 Priority2 Will meet with neighborhood to Street. determine scope of project. Estimated Cost - $564,000 East Bakersfield Draina.qe Improvement Public Works Yes Not Funded Conduct a drainage study and fund Phase 1 of improvements in the area bounded by Ward 2 Priority 3 Drainage study must be charged Brundage Lane, Mt. Vernon Ave., Union Ave., State Route 178. Study $150,000 must be toward 20% administration cap. charged toward the 20% admin cap. Construction Cost $206,500 Chico Street Curb and Gutter Improvements Public Works Yes Not Funded Installation of curb, gutter and street improvements on Chico and Kern Streets between Ward 2 Priority4 Area development with mixed Tulare and Baker Streets. industrial/commercial residential Estimated Cost $83,500 Median Island Improvement in CDBG Tar. qet Area Public Works Yes Fund $253,000. Construction of median islands, landscaping, irrigation systems in CDBG eligible area. Wards 1,2,3 Priority 5 Continuation of improvements in Estimated Cost $253,000 redevelopment project areas Graffiti Removal General Yes Fund $100,000 Removal of graffiti within various Iow-income areas including education and outreach. Services Priority 1 Continuation of City-wide graffiti Total cost $34,000 of program City-Wide program Estimated Cost $156,000 (CDBG targeted area) Martin Luther Kin.q Jr. Park General Yes Fund $29,000 Breezeway and Restroom roof replacement. Services Priority2 Continuation of MLK, Jr. Park Estimated Cost $29,000 Wards 1 upgrade Baker Street Streetscape Improvements EDCD Yes Fund $251,500 Install street improvements, landscaping and street furniture on Baker Street between Ward 2 Priority 1 Continuation of streetscape funded railroad right of way and East Truxtun Avenue. with EDI - $490,000 Estimated Cost $251,500 Street Improvements Department EligibilityRecommendation/ Ward Ranking Comments ~ 19th and Eye Street Streetscape EDCD Yes Fund $313,500 Install street improvements, landscaping, street furniture on 19th Street from H Street to Ward 2 Priority 2 Continuation of streetscape Eye and Eye Street from 18th to 19th Streets. improvement in the downtown area Estimated Cost $313,500 Jefferson Park Pla~/ground Equipment Recreation Yes Fund $205,000 Retrofit. Upgrade playground equipment and install ADA surfacing, and Parks Priority 1 Continuation of Jefferson Park Estimated Cost - $118,000 Ward 2 improvements Wayside Park Playground Equipment retrofit Recreation Yes Fund $224,000 Upgrade playground equipment and install ADA surfacing, and Parks Priority 2 Upgrading and ADA accessible Estimated Cost $224,000 Ward 1 playground improvements Lowell/martin Luther King Jr. Jefferson, Wayside Parks Recreation Yes Not funded Basketball court resurfacing, and Parks Priority 3 Estimated Cost - $205,000 Ward 1 IV/artin Luther King Jr. Park Picnic Site Improvements Recreation Yes Not Funded Install permanent picnic sites, and Parks Priority 4 Continuation of MLK, Jr. Park Estimated Cost - $21,000 Ward 1 improvements Lowell Park Picnic Site Improvements Recreation Yes Not Funded Install 4 permanent picnic sites, and Parks Priority 5 Continuation of upgrading to Estimated Cost $15,000 Ward 1 Lowell Park Metropolitan Recreation Center Pla~/ground Construction Proiect EDCD/County Yes Fund $80,000 Install new playground equipment, of Kern Parks Priority 1 Continuation of improvements to the Estimated Cost $80,000 & Recreation Chester ^ve./34th Street area Ward 3 improvements Martin Luther King Jr. Center Swimmin.q Pool Restoration Phase III Recreation Yes Fund $250,000 Replacement of pool decking, mechanical filtration, pumping system and restroom at and Parks Priority 1 FY 98 - $6,172 MLK. Project can be phased. Mechanical system and filtration is near collapsing. Ward 1 FY 99-$5,395 $71,500 upgrade system. FY 00 - $88,433 Estimated Cost - $246,000 FY 02 - $63,500 FY 02 - $300,000 (Sect. 108) Jefferson Park Pool Rehabilitation Phase III Recreation Yes Fund $250,000 Rehabilitation of decking, gutter system, mechanical system and restroom, and Parks Priority 1 FY 95 - $46,167 Estimated Cost $510,000. Ward 2 FY 98 - $243,000 FY 00 - $37,321 FY 01 - $116,512 FY 02 - $300,000 (Sect. 108) S.'\GEORGE\CIP 2003-04 f:und request.doc BAKERSFIELD Economic and Community Development Department MEMORANDUM ,~'/'J/""~ March 14, 2003 TO: Budget and Finance Committee (~~ FROM: Donna L. Kunz, Economic Development Director SUBJECT: Economic Development Loan Policy Guidelines Background The City of Bakersfield has made several economic development loans over the past 7 years. In some cases, loans were forgiven over a 5 year period, some were loaned at 0% interest with a balloon payment due at the end of five years and some were combined with tax increment rebates if the projects were located in qualifying redevelopment project areas and a significant private investment was made. The attached list provides the detail of our loan activity since 1995. Last year, one of our deferred loan recipients experienced a downt. Urn in business and approached the City to modifY'the terms of his loan. Since there waSn't an established policy concerning forgiving or requiring repayment on our loans, staff brought the request to the City Council with several alternatives, one which called for forgiveness of his loan and another alternative which called for a modified repayment schedule. The City Council referred the loan modification request to the Budget and Finance Committee to establish a loan policy and report back to the City Council concerning the loan modification request. The following Loan Policy and guideline was unanimously approved at the September 12, 2002 Budget and Finance Committee meeting. These guidelines provided staff a framework to fairly evaluate requests for financial assistance, review qualifications of prospective borrowers, establish criteria for protecting the public investment, and provide justification of the use of public funds with a cost-benefit analysis. Since the time the City's loan policy was approved, a state legislative bill also passed that required any public financial assistance to projects - below market loans or grants to private activities for construction or development costs, automatically triggered prevailing wages on the construction costs associated with the entire project. This action has significantly curtailed our economic development and redevelopment lending and grant activity. / C:~Documents and Settings\dkramer\Local Settings\Temp\B & F memo ED loan policy, doc Last year, the City Council set aside approximately $740,000 of CDBG funds for the purpose of economic development activity -loans for businesses expanding or locating in the Southeast. Staff sent out hundreds of letters to business owners and business tenants located in the Southeast informing them of the loan program. Businesses that indicated an interest in the program were then sent a loan application, a copy of our loan policy and guidelines and information explaining the prevailing wage issues associated with SB975. Staff received a few inquiries, but only one completed application - the Housing Authority for a planned commercial development on East California. The complexities of the CDBG program requirements and the SB975 legislative requirements have made it extremely difficult for staff to attract and process loan requests. It has been suggested that the City change some of its policies concerning the loan program to encourage more applicants. These suggestions include: 1 .) Allow the loans to be forgiven after 5 years 2.) Lighten up the collateral and underwriting policies, allow collateral other than real estate. 3.) Allow more than 10%-30% of public funds be available to the project. All of these suggestions are allowable under the current HUD guidelines. HUD allows the local jurisdiction to establish its lending policy. CURRENT LOAN POLICY GUIDELINES 1) Basic tenets a) The City of Bakersfield is a funder of last resort. b) The City of Bakersfield will only provide gap financing. c) Repayment begins immediately (nothing less than annual payments). No balloon payments. d) Projects must meet the "but for" test: the applicant must demonstrate the proposed project cannot succeed but for City assistance. 2) Qualifications a) A completed loan application with all required attachments must be submitted. Our clock begins ticking only when a completed package has been submitted. b) Determination of sound credit position of borrower(s). c) A proven ability of borrower(s) to repay. C:\Documents and Settings\dkramer\Local Settings\Temp\B & F memo ED loan policy.doc 3) Criteria a) Security (collateral) must be, i) equal to or greater than the amount of the loan. ii) in a form acceptable to the City of Bakersfield (preferably real estate). b) The proposed project must demonstrate the ability to (at least one), i) create jobs. ii) retain jobs (defined as those that would be lost "but for" this assistance). iii) reduce blight. c) The borrower(s) will accept the City's efforts to protect the community's investment in the proposed project through one or all of the following: i) clawback (recovery of all or part of the subsidy costs if the project fails to meet performance criteria). ii) penalty (fines or charges for non-performance or relocation). iii) recalibration (adjustments to the amount of the subsidy to reflect changing business conditions). d) The responsibility for maintaining the property rests with the property owner and will run with the property. 4) Cost-benefit analysis a) Identify all costs: i) cost of the loan amount. ii) cost of interest that the City could be earning on funds if the funds were not used as loan proceeds. iii) time value of money - the cost to the City of Bakersfield of not having the use of the funds. iv) loss of tax revenue, if any. v) any negative impacts (direct or indirect) to our area's existing businesses. vi) assistance will not diversify our local economy, if applicable. C:\Documents and Settings\dkramer\Local Settings\Temp\B & F memo ED loan policy, doc Vii) spur revitalization. viii) increase tax revenue b) Identify all benefits i) monetary (1) increase in property tax revenue, if any (2) increase in sales tax revenue, if any (3) increase in business license revenue, if any (4) increase in other tax revenue, if any ii) non-monetary (1) assistance will positively directly impact our area's existing businesses, (2) assistance will diversify our local economic base. (3) assistance will play a pivotal role in strengthening existing clusters or forming new clusters in our area. c) Evaluate the following to determine whether the proposed use will result in a cost or a benefit: i) the business will produce a product for export outside our area. ii) the quality of the jobs to be created. (1) benefits. (a) the percent of jobs to be created that will provide benefits. (b) how the benefits provided by the new jobs compare to those provided by others in local industry, (2) wage rate. (a) the wage rate of jobs compared to others in local industry, iii) whether the business will target Iow- and moderate-income individuals for employment. d) are other types of government assistance received by the borrower(s)? C:\Documents and Settings\dkramer\Local Settings\Temp\B & F memo ED loan policy, doc Companies Assisted by the City of Bakersfield Economic & Community Development Department March 2003 Company Location of Type of work Owner/CEO/ Total $ of agreement # jobs Source of Use of funds Date Assisted affected performed by Developer to be created funds project compan}, AB Dick 1200 18th Street Computers & Bentley $30,000 N/A Tax off-site improvements 8/12/02 RDA Copiers Sales Partnership tax increment Increment HPS Mechanical 3100 E. Belle Plumbing Les DenHerder $50,000 20 CDBG permit fees and 10/3/01 Terrace Avenue Contractor 5 year loan at 0% Tax equipment CDBG $20,000 Inerement 7/9/01 RDA tax increment Specialty Trim & 631 California Canvas Awnings Jerry Margrave $10,000 N/A Tax permit fees and 2/12/01 RDA Awning Avenue tax increment Increment development costs Victory Circle 700 S. Mount Race car chassis Les DenHerder $50,000 21 CDBG permit fees and 8/16/00. Vernon Avenue mfg 5 year loan at 0% Tax equipment CDBG $20,000 Increment 8/14/00 RDA tax increment Bks Civic Light 1931 Chester Theater Bks Civic Light $75,000 3 new CDBG lease reduction 6/8/00~: Opera Opera 5 year forgivable loan 6 retained . Sangera Auto Auto Mall Auto Sales Mehnga Sanghera $60,000 10 CDBG equipment 1/26/00. 5 year loan at 0% Stiers RV Sales Auto Mall RV Sales Mike Stier $60,000 10 CDBG equipment 10/21/99~ 5 year loan at 0% · No funds were "actually distributed to the listed company," since payments were provided directly to a vendor. Therefore, the date listed is the date the agreement was approved by the Bakersfield City Council. ~:Date that funds were "actually distributed to the listed company." _Assistance provided this company did not involve the "use of the Community Development Block Grant (CDBG) and other funds that primarily benefit low to moderate income persons." Pleasant 7500 District Call Center/ Ed Hogan $250,000 300 CDBG equipment purchase 7/21/99. Travel Service Blvd. Travel Agency 5 year forgivable loan Rite Aid 1701 23rd Street Drug Store Kevin Tweed $13,000 N/A Tax off site _ tax increment Increment improvements 11/9/98 RDA Sonic Burge[ 1401 23rd Street Fast Food Scott Mc Millan $22,500 N/A Tax off site _ tax increment Increment improvements 11/9/98 RDA DOPACO, Inc. 5801 District Cardboard Edward Fitts $200,000 75 CDBG equipment purchase 1/14/99~: Blvd. Packaging & 5 year forgivable loan 4/9/98} Printing Step2 7021 Schirra Plastic Products Tom Murdough $137,200 180 CDBG equipment purchase 8/12/98- Company Court 5 year forgivable loan Harvel Plastics 7001 Schirra Plastic Pipe Earl Wismer $125,000 40 CDBG fees and 3/11/98. Court 5 year forgivable loan equipment Kern-Tech, Inc. 405 East 19th Tooling Mike Miller $170,246 18 new CDBG equipment purchase 3/26/975 Street equipment Cliff David 5 year loan at 0% 10 retained 3/27/99~ Galey's Marine Auto Mall Drive Boat sales and Don Galey $60,000 6 new CDBG fees and equipment 7/23/98~ Supply service 5 year loan at 0% 14 retained 8/20/98:~ L&A Oak 2401 East Furniture mfg Leslie Mufioz & $30,000 61 retained CDBG equipment purchase 3/28/96. Designs, Inc. Brundage Lane Armando Nava 2 year loan at 8% Guy Chaddock & 2201 East Furniture mfg Guy Chaddock $200,000 130 new and CDBG buy down lease rate 6/26/96. Co. Brundage Lane 5 year forgivable loan transfers Southwest 1500 South Pipeline Floyd E. $150,000 16 retained CDBG purchase of property 4/3/97~/ Contractors, Inc. Union Avenue operations mfg Bowman, Jr. 5 year 9 new forgivable loan Hammons Meats, 1700 South Wholesale meat Craig Hammons & $35,000 23 retained CDBG equipment purchase 12/4/96. Inc. Union Avenue distributor Donald Hammons 5 year 6 new forgivable loan John Q. Hammons 801 Truxtun Hotel John Q. Hammons .land & 100 .Transient 'offsetting operational 6/29/95:~ Hotels Avenue improvements: $4.5 M Tax costs 8/31/955 · CDBG: $2.5M .Tax .fumiture, fixtures, 9/21/95:~ Increment and 10/19/95~ · CDBG equipment 11/14/95~ Holiday RV 2710 Auto Mall RV sales and Newton Kindlund $65,000 23 retained CDBG permit fees and 9/14/95~ Drive service forgivable loan 15 new equipment 1/18/96~ · No funds were "actually distributed to the listed company," since payments were provided directly to a vendor. Therefore, the date listed is the date the agreement was approved by the Bakersfield City Council. gDate that funds were "actually distributed to the listed company." _Assistance provided this company did not involve the "use of the Community Development Block Grant (CDBG) and other funds that primarily benefit low to moderate income persons." KGET 2120 L Street TV station KGET, Ackerly $175,000 N/A Tax rehabilitate building _ Communication tax increment Increment 6/24/96 RDA Group Carlson 1120 21 st Street Educating 8: Gayle Carlson $12,000 N/A Tax Off-site improvements _ Development training redevelopment Increment 4/5/95 RDA people with assistance disabilities Total Community Development Funds Committed $4,217,446 Jobs to be created/retained by Companies using the funds 1~096 Cost Per Job Created by CDBG funds $3,848 SSED Projects\Companies provided CDBG or RDA (1995 thru March 2003).DOC · No funds were "actually distributed to the listed company," since payments were provided directly to a vendor. Therefore, the date listed is the date the agreement was approved by the Bakersfield City Council. ~Date that funds were "actually distributed to the listed company." _Assistance provided this company did not involve the "use of the Community Development Block Grant (CDBG) and other funds that primarily benefit low to moderate income persons." The following documents pertain to the: BUDGET & FINANCE COMMITTEE meeting of Monday, March 17, 2003 at 4:00 PM. HAI~OUT AT BUDGET & FII~CE COMMITTEE MEETING ONM-~RCH lY, 2003. § 570.209 24 CFR Ch. V (4-1-98 Edition) (ii) .Al! housing activities for which unde.-~.-:.:ing and selecting CDBO-as- the Community Develooment Finan- sisted economic development projects ciai Ins[it'-'tion'obligate~ CDBO amsist- which are financially viable and will ante during [he program >'ear may be make .-.he most effective use of the copJidered to be a single st~-ucture for CDBG funds. These guidelines, also purposes of applying the criteria at ferred to as the underwriting guide- pa--agraph (a)(3) oft. his section, lines, are published as appendix A to [7) Where an ac~:ivity meeting the cfi- this par-:.. The use of the underwriting te.~.a at §510.209Co)(2)(v)may also meet guidelines published by HL'D is not the requirements of either paragraph mandato~'. However. grantees electing (d)($)(i) or (d)(6)(i) of this section, t}~e ' not'to use these guidelines would be ex- grantee n~y elect to qualL~y the activ- pected to conduct basic financial un- ity' under either the area benefit cfi- der~miting prior to the provision of te.~ia at paragraph (a) (1) (vii) of this CDBG financial assistance to a for- section or the job aggregation criteria at parag.-aph (a) (4) (vi) (D) of this sec- profit business. Where appropriate. rich. but not both. Where an activity HUD's underwriting guidelines recog- may- nee; the job aggregation criteri~ nize that different levels of review are at both paragraphs (a) (4) (~!) CD) and (E) appropriate to take into account dif- of t_his set,on, the grantee may' elect ferences in the size and scope of a pro- to qualhZy the activity under eirJner cfi- posed project, and in the case of a teflon, but not both. microenterprise or other small busi- ness to take into account the dif- if3 .--R 344~. Sept. 6. 1988; 53 FR 41330. Oct. 21. ferences in the capacity and level of 1998. a~ amended at 60 FR 1945. 3an. ~. 1995: ~0 FR 17445..Apr. 6. ]99~; 60 FR ~69!2. Nov. 9. phisticar_ion among businesses of dif- I995: 5I FR 1~674. Ap:'. 29. 1996] feting s~as. Recipients are encouraged. when ~hey develop their own programs § 570209 Guidelines for evaluating and under'~riting criteria, to also rake and selecting economic develol~ these factors into account. The objec- rnent projects, tires of ~he underwriting guidelines are The follcwing guidelines are provided to ensure: [o assist ~ne recipient to evaluaEe and (1) That project costs are reasonable; select acuvities to be carried out for (2) That all sources of project financ- economic develomment purposes. Spe- lng are committed; ci~Scally, r/-.ese guidelines are applica- (3) 'i-nat to the extent practicable, ble to activities that are eligible for CDBG funds are not substituted for CDBG assLs~ance under §570.203. These non-Federal financial support; o-.de..nes also apply to acti~ties ca~- tied out under the authorit~¢ of §570.204 (4) That the project is financially fea- that would otherwise be eligible under sible; §570.203, were it not for the involve- (5) That to the extent practicable, ment of a Community-Based Develop- the return on the owner's equity in- ment Organization (CBDO). fl-his vestment will not be um-easonably would include activities where a CBDO high; and makes loans to for-profit businesses.) ($) That to the extent practicable, These guideEnes are composed of ~wo CDBG funds are disbursed on a pro ra~a components: guidelines for evaluating basis w~ith other finances provided to project cc~ and financial require- the project. ments; and standards for evaluating Co) Standards for evafuatfmf pubffc ben- public bene~. The standa~-ds for evalu- erst. The grantee is responsible for a~ng public benefk are mandatom/, but making sure that at least a minimum the guidelines for evaluarAng projects level of public benefit is obtained from costs and ~nancia/ requ~ements are the expenditure of CDBC funds under not. the categories of eligibility governed (a) Gufd~_/fmes and objectfwes for eva/u- by these guidelines. The standards set atfnf project, costs and f~mancfa/ requfre- forth below identify the ~ of public memt$, l-iL-D has developed guidelines beneF~,: that will be recognized for this tha: are designed to provide the recipi- purpose and the minimum level of each ent with a framework for financially that must be obtained for the amount Ofc. of Asst. Secy., Comm. Planning, Develop., HUD § 570.209 of CDBG funds used. Unlike the guide- of an area. the grantee may elect to lines for project costs and financial re- count the activity under either the quirements covered under paragraph jobs standard or the area residents (a} of this section, the use of the s~and- standard, but not both. a-'ds for public benefit is mandatory. (iv) Where CDBG assistance for an Ce.'zain public facilities and improve- activity is limited to job training and ments eligible under §570.201(c) of the placement and/or other employment regulations, which are undertaken for suppor: services, the jobs assisted with economic development purposes, are CDBG funds shall be considered to be also subject to these standards, as created or retained jobs for the put- specified in § 570.208(a) (4) (vi) (F) (2). poses of applying the aggregate stand- (l) S~andards for acta'vicies in the a~e- ards. gate. Activities covered by these gu/de- (v) Any activity subject to these lines must. in the aggregate, either: guidelines which meets one or more of (i) Create or retain at least one full- the following criteria may, at the ~me equivalent, permanent job per grantee's option, be excluded from the ~35.00e of CDBG funds used; or aggregate standards described in para- (ii) Provide goods or services to re~i- graph (b) (I) of this section: dents of an area. such that the number (A) Provides jobs exclusively for un- cf low- and moderate-income persons employed persons or participants in residing in the areas served by the as- one or more of the following programs: slsted businesses amounts to'at least (~1) Jobs Training Partnership Act cne tow- and moderate-income person (3Tt~A): per S350 of CDBC funds used. ('23 3cbs Opportunities for Basic (2) Appl. v~ng ~he a~re~are standards. Skills (JOBS): or (i) A metropolitan city or an urban county shall apply the aggregaze (3) Aid to Families with Dependent ~%andards under paragraph (b)(1) of tJ~is Children (AFDC); section to all applicable activities for (B) Provides jobs predominantly for which CDBG funds are first obligated residents of Public and Indian Housing ~tr/nin each single CDBG program yea~. units; · ~tr. hout regard to the source year of (C) Provides jobs predominantly for r/ne funds used for the act/vities. A homeless persons; g.-antee under the HUD-Administered (]2)) Provides jobs predominantly for Small Cities or Insular A~eas CDBG low-skilled. Iow-and moderafe-income programs shall apply the aggregate persons, where the business agrees to standards under parsgraph Co)(1)oft his provide clear oppor'cunities for pro- 5~ction to all funds obligated for appli- motion and economic advancement. cable activities from a given grant; Such as through the provision of train- pro§ra/n income obligated for applica- lng; ~- activities will, for these purposes, (E) Provides jobs predominantly for be aggregated with the most recent persons residing within a census ti-act open grant. For any time period in (or block numbering area) that has at which a community has no open HLqD- least 20 percent of its residents who are Administered or Ir~sular Are~ granr_s, in pover~/: the aggregate standards shall be ap- (F) Provides assistance to busi- plied to all applicable activities for ness(es) that operate(s) within a census w~,2ch program income is obligated tract (or block numbering area)that during that period. 'has at least 20 percent of its residenr~ (ii) The grantee shall apply the ag- who are in poverrjc, ~-~gace standards to the number of (G) Stabilizes or revitalizes a neigh- jokks to be created/retained, or to the borhood that has at least 70 percent of number of persons residing in the area its residents who are low- and mod- 5erred (as applicable), as determined at orate-income: the time funds are obligated to acti~.- (]-{) Provides assistance to a Commu- ti~. niry Development Financial Institu- ',fiji) V~'here an activity, is expected tion that serve an area that is predomi- both to create or retain jobs and to nantly !ow- and moderate-income per- provide goods or services to residents sons~ 63 § 570.209 24 CFR Ch. V (4-1-98 Edition) (I) Provides assistance to a Commu- findings of noncompliance relating to nit~.'-Based Development Organization previous CDBG assistance provided by se.~Sng a neighborhood that has a: the recipient. least 70 percent of its residents who a.-e (4) Appl~wino= the individual ac~ivf~ lo~'- and moderate-income: s~andards. (i) Where an activity is ex- (J) Provides employment opportuni- pected both to create or retainjobs and ties that are an integral component of to provide goods or services to resi- a project designed to promote spatial dents of an area. it will be disqualified' deconcentration of low- and moderate- only if the amount of CDBG assistance ~come and minority persons; exceeds both of the amounts in para- (K) With prior HUD approval, pro- graph (b)(3)(i) of this section. rides substantial benefit to low-income (ii) The individual activity standards persons through other innovative ap- in paragraph 00)(3)(i) of this section proaches; shall be applied to the number of jobs fL) Provides services to the residents to be created or retained, or to the of an area pursuant to a strategy .ap- number of persons residing in the area proved by HL~D under the provisions of served (as applicable), as determined at §91.215(e) of this title; the time funds are obligated to activi- [M) Creates or retains jobs through ties. businesses assisted in an area pursuant (iii) Where CDBG assistance for an to a strategy approved by HUD under activity is limited to job training and the provisions of §91.215(e) of this tir_le, placement andfor other employment (3) Standards for individual activitJes, support se.~vices, the jobs assisted vrith Any acti~ty subject to these guide- CDSC funds shall be' considered to be lines which falls into one or more of cr~_ated or retained jobs for r. he put- the following categories will be cons,:d- p~ses of appl),ing the individual activ- ered by HUE) to provide insufficient ~ ity s~andards in paragraph Co)(3)(i) of public ~enefit, and ther~ore may under this section. no ch'cumstances be assisted with (c) A.tnendmencs to economic deveYop- CDBG funds: men~ projects altar review detezTninat~'ons. (i) The amount of CDBC assistance If, aker the grantee enters into a con- exceeds either of the fol]owin§, as ap- b-act to provide assistance to a project, plicable: the scope or financial elements of the (A) $50.000 per full-time equivalent, project change to the extent that a sig- perrnanentjob created or retained; or nificant contract amendment is appro- (B) $1.000 per low- and moderate-in- priate, the project should be reevalu- come person to which goods or services ated under these and the recipient's are provided by the activity, guidelines. (This would include, for ex- (ii) The activity consists of or in- ample, situations where the business cludes any of the following: requests a change in the amount or (A) General promotion of the commu- terms of assistance being provided, or n!ry as a whole (as opposed to the pro= an extension to the loan payment pe- motion of specific areas and programs): riod required in the contract.) If a re- (B) Assistance to professional sports evaluation of the project indicates that teams; the financial elements and public bene- (C) Assistance to privately-owned fit to be derived have also substan- recreational facilities that s~rve a pre- tiallv changed, then the recipient dominantly higher-income clientele, should make appropriate adjustments where the recreational benefit to users in the amount, type, terms or condi- or members clearly outweighs employ- tions of CDBG assistance which has ment or other benefits to low- and been offered, to reflect the impact of moderate-income persons; the substantial change. (For example, ' (D) Acquisition of land for wkich the if a change in the project elements re- specific proposed use has not yet been sults in a substantial reduction of the identified; and tot_al project costs, it may be appro- (E) .~ssistance to a for-profit business priate for the recipient to reduce the w,kile that business or any other busi- amount of total CDBG assistance.) If ness ox~ned by the same person(s) or the amount of CDBG assistance pro- entity(les) is the subject of unresolved vided to the project is increased, the Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.301 amended project must still comply lng selection criteria), and how much 'with the public benefit sta~.dards under and under what terms the assistance pa~-agraph (b)of this section, will be provided, or in the case of a (d) Docuznentatfon. The grantee must planned public facility or improve- maintain sufficient records to dem- ment. how it expects to determine its onstrate the level of public benefit, location. based on the above standards, r_hat is (b) Float-funded acriwfrfes and ~uaran- actually achieved upon completion of teas. A recipient may use undisbursed the CDBG-assisted economic develop- funds in the line of credit and its CDBG ment activity(ies) and how that com- program account that are budgeted in pares to the level of such benefit an- statements or action plans for one or ticipated when the CDBG assistance more other activities that do not need was obligated. If the grantee's actual the funds immediately, subject to the results show a pattern of substantial limitations described below. Such variation from anticipated results, the funds shall be referred to as the "float" grantee is expected to take all actions for pu.-pcses of this section and the ac- reasonably within its control to ia- tion plan. Each activity carried out prove the accuracy of its projections. If using tine float must meet all of the the actual results demonsr~-~te that same requirements that apply to r_he recipient has failed the public ben- CDBG-assisted activities generally, and efzt standards. HUD may require the must be expected to produce program recipient to meet more sr--ingent income in an amount at least equal to s%andards in future years as appro- the amount of the float so used. When- priate, ever the recipient proposes to fund an [60 FR 1947. Jan. 5. 1995. as amended au 60 FIR activin' ~-ith the float, it must include 17445. Apr. $, 1995] the acti',iry in its action plan or amend the act/on plan for the current pro- Subpart D--Entitlement Grants gram year. For purposes of this sec- tion, an activity that uses such funds SOU~RCE: 53 F~R 34449. Sept. 6. I9~. urdess will be called a "float-funded activity." otherv~se noted. (1) Each float-funded activity must be indisidually listed and described as § 570.30~ General. such in the action plan. This subpart describes the policies (2)(i) The expected time period be- and procedures governing r_he making tween obligation of assistance for a of community development block float-funded activity and receipt of gr-dnts to entitlement communities, program income in an amount at least q~ne policies and procedures set forth in equal to the full amount drawn from subparts A. C. 3, K, and O of this par~ the float to fund the activity may not a/so apply to entitlement grantees, exceed 2.5 years. An activity from which program income sufficient to re- §570.301 Activity locations and float- cover the full amount of the float funding, sistance is expected to be generated The consolidated plan, action plan. more than 2.5 years after obligation and amendment submission require- may not be funded from the float, but ments referred to in this section are may be included in an action plan if it those in 24 CFR part 91. is funded from CDBG funds other than (a) For activities for which the grant- the float (e.g., grant funds or proceeds ee has not yet decided on a speci~c Io- from an approved Section 10~ loan cation, such as when the gr~ant~ is al- guarantee). locating an amount of funds to be used (ii) Any extension of the repayment for making loans or grants to busi- period for a float-funded activity shall nesses or for residential rehabilitation, be considered to be a new float-funded the description in the action plan or activity' for these purposes and may be any amendment shall identify who may impler~ented by the grantee only if the apply for the assistance, the'process by extension is made subject to the same which the grantee expects to select limitations and requirements as apply who will receive the assistance {includ- to a new float-funded activity.