HomeMy WebLinkAboutReso 1997-18753 RESOLUTION NO. 18753
RESOLUTION OF THE CITY COUNCIL OF THE CiTY OF CHULA
VISTA 1) ACCEPTING CLAGGETT WOLFE ASSOCIATES'
(CONSULTANT) PHASE I FINDINGS AND RECOMMENDATIONS
AND AUTHORIZING STAFF TO PROCEED WITH PHASES II AND
Ill TO DEVELOP A SMALL BUSINESS REVOLVING LOAN
PROGRAM; 2) APPROVING AN AMENDED AGREEMENT WITH
CONSULTANT FOR PHASES II, III AND A NEW PHASE IV (EDI
GRANT APPLICATION) AT AN ADDITIONAL COST OF $5,700
TO BE PAID FROM RE-PROGRAMMED CDBG AND ECONOMIC
DEVELOPMENT FUNDS; AND 3) AUTHORIZING STAFF TO USE
SECTION 108 AS ARESOURCE FOR ECONOMIC DEVELOPMENT
PROJECT NEGOTIATIONS, SUBJECT TO APPROVAL BY
COUNCIL OF INDIVIDUAL LOAN APPLICATIONS
WHEREAS, City Council directed staff to evaluate the benefits of implementing a HUD
Section 108 business development loan/loan guarantee program; and
WHEREAS, Council approved $30,000 in Community Development Block Grant (CDBG)
funding to hire a consultant to prepare a feasibility analysis of the HUD 108 Loan/Loan
Guarantee Program, and assuming positive results, to assist staff to develop a Chula Vista
Business Loan Program; and
WHEREAS, Council approved an agreement with Credo, Wolfe and Associates for
consulting services; and
WHEREAS, the existing Consultant agreement consists of three phases as follows:
Phase I - Feasibility Analysis and recommendations regarding general types of loans City
should pursue; Phase II - Development & Submission of City's generic application to HUD; and
Phase Ill- Development of recommended loan program(s); and
WHEREAS, Phase I has been completed and the report is on file in the Office of the
City Clerk and known as Document No. CO97-137, and Consultant determined there is a need
for direct "gap" financing to supplement private loans; and
WHEREAS, staff is recommending that Phases II and Ill be undertaken in order to
create a Small Business Revolving Loan Program and to submit an application to HUD
requesting authority for the City to make such loans, subject to pre-established, HUD-
approved loan criteria; and
WHEREAS, staff is recommending a new fourth phase, i.e. the preparation and
submission of an Economic Development Initiative (EDI) grant application to HUD for Loan
Loss Reserve funds to support the Section 108 Loan Program; and
WHEREAS, the existing contract, therefore, needs to be amended to reflect the
expanded scope and cost to cover Phase IV; and
WHEREAS, staff is recommending that Council authorize staff to begin to utilize the
Section 108 Loan/Loan Guarantee Program as an economic development tool for specific large
development projects, with loan terms to be negotiated on a case-by~case basis. These
Resolution 18753
Page 2
negotiated, project-specific loans or loan guarantees would be subject to approval by Council
and would require separate, individual applications for approval to HUD; and
WHEREAS, approval of this resolution poses no risk to the City's General Fund. The
proposed 108 Loan program is unlike previous City use of Section 108, wherein the 108
funds have been "paid off" by the City from annual CDBG awards. The business loans are
repaid by the business borrowers themselves. CDBG funds are allocated only in the event of
a default, and then are allocated to pay off the debt over an extended period - up to 20 years.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does
hereby adopt the resolution which: 1) accepts the Consultant's Phase I findings and
recommendations and authorizes staff to proceed with Phases II and Ill to develop a Small
Business Revolving Loan Program; 2) approves an amended agreement with the Consultant
for Phases II and IU and a new Phase iV (EDI grant application) at an additional cost of $5,700
($5,500 from Acct. 653~6531-BG 105 and $200 from Acct. 100-0261-5201 re-programmed
to Acct. 649-6491-BGI06) and authorizes the Mayor to execute the same, which is on file
in the Office of the City Clerk and known as Document No. CO97-137; and 3) authorizes staff
to use Section 108 funds as a resource for economic development project negotiations,
subject to approval by Council of individual loan applications.
Presented by Approved as to form by
Chris Salomone Joh Kaheny ~
Community Development Director '
Resolution 18753
Page 3
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 5th day of August, 1997, by the following vote:
AYES: Councilmembers: Moot, Padilia, Rindone, Salas, and Horton
NAYES: Councilmembers: None
ABSENT: Councilmembers: None
ABSTAIN: Councilmembers: None
ATTEST:
~Authelet, City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Beverly A. Authelet, City Clerk of the City of Chula Vista, California, do hereby certify that
the foregoing Resolution No. 18753 was duly passed, approved, and adopted by the City
Council at a regular meeting of the Chula Vista City Council held on the 5th day of August,
1997.
Executed this 5th day of August, 1997
Beverly ~. Authelet, City Clerk
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