HomeMy WebLinkAbout99-047• ~ t .y.~
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WHEREAS, the County of Butte receives program income from various State of
California Community Development Block Grants; and
WHEREAS, Community Development Block Grant regulations allow program income
to be disbursed into revolving loan funds established to utilize program income; and
WHEREAS, the County of Butte wishes to adopt a reuse plan to serve as guidelines to
insure such revolving loan funds are in compliance with applicable federal, state, and
local regulations and requirements; and
WHEREAS, these guidelines in the form of a reuse plan have been reviewed and
approved by a state representative of the State Housing and Community Development
Program.
NOW, THEREFORE, BE IT RESOLVED that the Board of Supervisors of the County
of Butte does hereby adopt the document entitled "Reuse Plan Governing Program
Income from Community Development Block Grant-Assisted Activities for the County
of Butte" and attached hereto as Attachment A.
PASSED AND ADOPTED by the Butte County Board of Supervisors on this 23rd day of
March, 1999, by the following vote:
AYES: Supervisors Beeler, Houx, Josiassen, Davis and Chair Dolan
NOES: None
ABSENT: None
NOT VOTING: None
i
' ~
JA E DOLAN, Chair
Butte County Board of Supervisors
ATTEST:
JOHN S. BLACKLOCK, Chief Administrative
Officer and Clerk of the Board
.. ' _-~
l~~~~°A RESOLUTION OF THE BUTTE COUNTY BOARD OF SUPERVISORS
ADOPTING A REUSE PLAN GOVERNING PROGRAM INCOME FROM.
COMMUNITY DEVELOPMENT BLOCK GRANTS
Attachment A
Reuse Plan Governing Program Income from C'ommunitf~ Development Block Grant-Assisted
Activities for the County of Butte
Rev. -1-3125!99
I. Purpose
The piupose of these guidelines is to establish policy and procedures for the administration and
utilization of program income received as a result of activities funded under the State Conununit}~
Development Block Grant (CDBG) Program.
II. Need for Plan Governing Reuse of Program income
This Reuse Plan is intended to satisfy the requirements specified in federal statute and regulation
at Section It)4 (j) of the Housing and Community [)e~rl~~.nnent Act ("the :'~.ct"~), as <::u,~~~clr<i in
19')2 and 2-1 CFR X70.-18~) {~} (,). "These sta!uicry and r~gulator~ sccti<;ns }xnnit a unit of local
govermnent to retain program income for CDBG-eligible activities. Under federal guidelines
adopted b}~ the State of Californians CDBG program, local goycrmucnts arc pernutted to retain
program income as long as the local govenune~zt has received advanced approval from the slate of
its local plan governing program income. This plan has been developed to meet these
requirements.
III. Program Income Defined
Program uicomc is ~lelincd in federal regulation at '-1 ~Fk 5%i), 1~~~ (u), eyhich is uico~por~lc~i h}
reference to this plan.
IV. Reuses of Program Income
The County~s program income trill l~lr ~<< ~ ~ ~„]~ for~li~ihl, ~'[~i'G activit~e~ ,?.._' ;:,~t.ui
National C7bjcctive as specified it f~der:z< <, ~,a- ~~, at 2-1 C~E~R X70.-182 and 2~ CFR 57~) -t~Z
The Count}~ reserves to itself Uic options of utilizing program income to fund aCDBG-eligible
aetivit}• t}rat leas been w~rittcn into a general allocation rant application; or to amend au open
CDBG grant to include an additional CDBG-eligible activity that will be funded from program
income. The County shall follow established State public participation process in either funding or
amending activities according to this section.
W. Distribution far Reuse of Program Income
The County's program income will be distributed as follows: tyro (2) revoh~ing loan funds ;RLFs)
arc established to utilize program income. Program income will be all~~~~~!ed to each l:1_I' as
fal Lows
A. All program income generated through housing E~rants ftmded from the General rind
Native American Allocations will be deposited into the HCI~ Revolving Loan Fund:
B. All program income generated through non-housing grants funded from the General
and Native American Allocations will be deposited into the Business and Retention
RLF as noted in Section C below, 1'he County ma~~ reallocate some or all of the
Page T~~ a
Count~~ of Suttc CD13G Program Income Reuse Plan
contributions to either fund as ciremnsttiuiccs require subject to Section IV.
C. All program income generated through grants funded from the Economic
Development Allocation will be deposited into the E3usincss Expansion and
Retention RLF.
V[. Housing; Preservation RLF
This fund will be used for the purpose of makhig lawns to rehabilitate residential touts occupied by
households, which have an annual income, which is 80 percent (8Q%,), or less of the County°s
median income. At least ~ 1 percent {? i','~o) of the funds cspended for activities ilutdcd guider this
RLF shall be used on revolving activities. No more than fifteen percent {1>%) of the program
income received during the year shall be expended for housing rehabilitation grants. No more t;,t~n
sixteen percent (1(i" ~~) of the funds expended from this RLF shall be usi;d for activit}~ dcli~-cry
costs. No more th~ul eighteen percent (l 8%) of the amount expended annually may be used for
general admitlistrative costs related to this RLF acti~~ity. Total expended for non-revolving
activities (grants. activity delivery costs and gaiert] achiunistration) shall not exceed forty-nine
pcrceut {~9%) of the total funds expended during the program year {July 1-June 30}.
The County reserves the right to adjust these limitations consistent with existing State policy.
T'hc Butic Count~~ Housing Preser,-ation RLF ~~~ill be used to (trance the follo~~°ing types of
acu~ toes and related costs through the use of loans, loan guarantees, interest supplements, or other
means far the impro~~ement of residential dwelling units occupied by lower-income households.
For the purpose of ibis section, the Ucparimant administering this fund shall determine the
appropriate use and level of support ncccssar< to alleti late identified horsing rehabilitation
problems:
'y. Em,,^_rrrcnev home repairs incl.~ding but not limited to roofs. fmmd~;tions_ :md sidin,~~.
t, r:n~r~~~~-elficienc~ i~7lpro~~e~~?cstts in residential strt:.'~.::_
C. Residential handicapped access improvements:
D. Payments to cover harncowncr hazard insurance premiums, monthly mortgage payments, or
other payments necessary to prevent foreclosure, homelessness of Ownertl3orrower, or to
secure the County's previous investment of rehabilitation services with CDBG funds. If such
payments arc made, the County or it's designee may, in its sole discretion. add such
patiancnts to the principal amount that the ChvnerfBorrower is obligated to pa}~ under the
program;
E. Costs related to the inspection. testing, and abatement of Lead base paint any! asbestos
rG110\ Al.
F, Provide dow~~ payment assistance for eligible target income r~,ntcrs to parchase their rcutal
dwellings. Do~~~n payment assistance may be in the form of tow interest loans for up to 10'%,
of the purchase price of the Name.
Page 'I'hrec
Butte Counts Program Income Rcusc Plan
1. Hligibility
a} trust be a first Buie ho-nc buyer with no home o~vncrship in the last 3 years
b} subject home must be in the unincorporated area of Butte County
c} purchaser must have occupied the subject home as a rental for a minimum
of six {G} mouths prior to the purchase date
d} purchaser must meet the most current CDBG income guidelines.
2. Term
a} loans shall be made based on the County's most current rehabilitation loan
standards
b) loans may be fu11y deferred in order to provide needed gap financing.
The review and funding of requests for CDBG loan or ~ra-tt assistance under this RLF will be
conducted under guidelines devclorcd and approved by the Butte Count}~ Board of Supen~isors.
All assistance provided to activities under this RLF shall be made for aetil~itics that are located
within the Cowtty's jurisdiction. If the activities funded tinder the RLF are for dte same activities
as those funded under au open State CDBG agreement, then the funds available in this RLF shall
be expended or obligated prior to drawing down funds from the State CDBG program.
a..ll. Ii s:~~'sness Expansion and l~ctentioi~~ .~~
ZIllS C!i:~lt "e'ti~~ ~ ~_ l1Std i0 i~li ..~... ~il;~~ fli~LinCIItg forbU5lnCSSCS that Ca'.1 doer-ne-tt t}?e 1"'-'C'd fOr
CDBG asst<tance and that will create or retain q~_-alifvins~ ~~=~rmancnt jobs that will bc^. priu~ilk-11v
filled by members of households which have an annual income that is eighty percent (8U°lo} or less
of the Countv's rncdian household income, adjusted for svc. At (cast fifty-one percent (S I %,) of
tht :::~ui~ cxfx nck~' 'ur activities funded under this RLF shall be used on revolving activities. I1p
To forty-nine percent (49°ia} of the program income funds received during the program year tray
be ex}xnded for non-revolving r-ctivitic~ tin to cig1ttcen percent (18°4~) of the amount expended
annually tna}~ be upended for general acituinistratiou costs related to this RLF activiri~. Total
ftuu~~ .~~a,~~„t.~~a for ncn-re~~~'~.i ~~~ activities (grants. activity delivery costs, and general
ad~--inistration} shall r~oi c~:cecd forte--nine p-:xce-tt (~9"ro) of the total funds.
The Cotntt~ rucn~cs ,hc right to adjust these lituitations consistent vv~th existing State policy.
If activities funded under the RLF are for the same activities as those funded under an open State
CDBG grant agreement, then the funds available in this RLF shall be substantialiv upended or
obligated prior to dra~ti~ing doti~n funds from the State CDBG program.
The review and funding of requests for CDBG loan or grant assistance under ibis RLF shall be
conducted under the federal undenvri?ing guidelines e~~;,cified at '?~ CFR~~t).-kg2 (e) which_ bti~
adoption of this Reuse Plan, arc incorporated by reference to the RLF's project review procedures
in addition to those gnidclittes fatu~d in Exhibit `B"
Ya4;e Four
Butte County Program Income Reuse Plan
In addition, any activiri~ requesting funding under this RLF shall be deemed eligible under Section
510.82 and Section 105 (a} of the Act. Each activity shall prop ide sufficient public benefit as
speciC~ed under Section 570.-482 (f). Any CDBG assistance for infrastructure shall meet the
requirements of Section 570.83 (b) {~}) (F},
All assistance provided to activities under this RLF shall be made for activities that are located
~~~ilhin the County's jurisdiction.
VIII. General
Program income received by the RLFs shall tx: substantially obligated at the end of the Program
Year which is defined as July I-June 30. The County shall comply kith all State CDBG reparting
requirements, including submittal of an annual Grantee Performance Report for each RLF and
submittal of the required Atuiual Program Income Report. The County shall ensure that the use of
program income under this Plan complies w7th all CDBG program requirements. The County shall
utilise the Latest available State CDBG Program Grant Management Manual to ensure ongoing
compliance with CDBG requirements.
Butte County
Community Dc~~clopment Block Cram Program
Business Expansion and Retention RLF
Exhibit "B"
(Reti-. 2-2!] 0/99)
Loan Amounts
Minimum - $10,000
Masinuun - $100,000
Loans may be made for under $10,000 if the borrower has been in business
for at least 3 vears. has been prof;tablc for the prc~~ious 2 years. and has
a superior credit record. Collateral requirements, for Loans under $10,000
nzav be ~i<zived if these criteria arc fulfilled.
Repayment Terms
y~orking Capital - ui~ to ~ years
Equipment - up to 10 vears
Other-term 1° tsed on ti~~:~ useful life of ih~ as~~t finan;~c~!
A tnasinmm of xis ((i) months interest only payments ma~~ be allowed to either
improve repo}anent ability or initial nntltipie disbursements at project inccptiotz.
Loans may be reatuortired and differ from this section if it is uz the
best interest of the RLF to establish alternative repayment terms.
Rites, Fees, and Charges
111terCSt Cale - pr11nC ~ ~°ii Iila~m1Ut11, 41~1t11 a llllilltaillll Of >°, u.
Fees and charges = $150 application fee upon acceplauce
2% loan processing fee
Actual closing costs
$fi.iH) n2o~lthlti set-~~icc fee =added to loan payment
2°l0 loan modification fee for atzy changes after loan closing
Epuit~~ Requirements
2U`% of pr~jcct costs may be borro«~cr cash. Equii}~ for ~~~orkin~ capital loans
may be satisiicd by an appropriate amount of net working capital based on a
current lx~rrower financial statement. 1/quity requirements will be based on the
portfolio as a ccholc, allowing for flesibilit~~ on a project-b}-project basis.
Exhibit "B"
Page Try o
Butte Countti~ Program Income Reuse Plan (Re~~.2-2110199}
1Llatchin~ Requirement
For cvcr~~ one dollar ($ I } of RLF 6n,mciug. there shall he one d~ll<~r (i 1) of
private capital Private capital is either:
(1) Owner cash;
~_ : Bank f ~r~ acing
(3} Private, third fklrty~ lending or im~esun~nt; or.
(-t) Existing net ~lorking capital ins-csted in the business.
This matching requirement ~r~ill be based an Uie portfolio as a whole, ahtot4ing
for f7esibilit~~ on a project-b}~-project basis,
Debt to Net Worth Ratio
This ratio should not c~ceed ~:1 unless tmden+riting proti ides adequate
justification or additional securit~~ is provided. Debt is defined as the
total liabilities or thc'.-~.:~ i~_"r~
SecurittlCollatcral
Securit_c maF~ be required as a seeondar<~ source of repal~mcnt. Collateral ~~ahies
~~~ili be adjusted based on the fohlo~~ing, net of any existing liens:
(i) Rcah estate - 9~°f~
(2) Equipment - 7~`% (Vehicles ~ti-ill be based on current lo«~ Blue Book)
(3) Marketable Securities - 70%
(-h) Accounts rccci~~ablcs,'fn~cnton~ 50",~~
(~) Other business or personal assets - ~0%
Public. Benefit
Loans provided by the RLF shall meet one of the National Objectives as stated
in 2a CFR. Par+, ~7t??(?R. and meet th~~c evaluation guidelines in 2~ CPf? >7!??(?')
Exhibit "B"
Page 7"In•ce
Butte County CDBG Protiram Income Reuse Plan (Rey°, 2-2110/99)
Loan Anprayat Board
Loan in excess of b15,00t) submitted for consideration ~~ill be approved by the
existing Tri-County Economic Development Corporation Loan Administration
Board (LAl3), as specified in Scetion VII of this Reuse Plan.
Loans at or belo~ti~ $15,Ot)U will be; approved by the Tri-Coruity EDC staff. Loans
under $15,000 shall be submitted to the County on the form attached as Exhibit
"C" Rccogniring that the Tri-County FDC mar' from. time to time, render
~:;°n~ices to borrowers which are highly personal and confidential in naU~r~~
County. in its dealings with the Tri-Cowity EDC, will at all tinges maintain
confidentiality and will not require a public record to be made or violate the
confidentiality rcquireurents of the Tri-County EDC as allowed by law.
Eti~iblc Protects ttnd Activities
(1) acquisition of owner-occupied I~:n~.l and facilities;
(2) acquisition of machinery, equipment, furniture. and futures;
(3) tyorking capital;
(~) lines of credit;
(5) loan guarantees; and.
(G) loan participations.
Eli<~ible Project Costs
Eiigiblc costs include the follo~ti~iug:
(1) cost of purchasing land and buildings;
(2} machinery and equipment costs including delivery. installation.
eliginccring, architectural, legal, insurance and related costs associated with
the acquisition and installation of machinen- and equipment:
(3} other costs such as sales and use lax. loan Fees, and interest on interim
construction financing;
{-t} refinancing existing debt when it can be demonstrated that the refinancing
will improve repayment capacity, expand job creation or retention. or
improve the sustainability of the borrower. Refinancing may not be used for
the snlc purh~~ ,-,, of reducing the risk of other lenders or in~estors_ ui.
(~) working capital.
County of Butte
Communit~~ Devclopmrnt Bloek Grant
Loan RevienlAuthorization to Disburse Funds
Exhibit "C"
Client RLF #/Type:
Date of Application:_ Loan Date:
ApprovaL_ _ _ Business Type:
Credit Mcmo Atu~ehed _Ycs_No If no.
explain: -----._. _.-- -
Loan request amount; $ __
C`DBC RLF balance: ~_
Remaining balance: ~-_ -___. -__--_-____
Tri-County Economic De~clopment ("nrt?oration C'crtification
The analysis supporting this request has been conducted by the Tri-Count}~ Eco~lomic Development
Corpcnation ti~~luch sen-cs as staff to the Loan Advisor<~ Board. The Loan Advison~ Board or staff has
~~n~ll~~cd this information and other business credit informati~,~ ~ .<<l is recomniendin~ approval of this loan.
I hereby certify the above information to be correct to the best of my kmo~~-ledge
Marc Nem~uiic, Executive Director, Tri-County EDC.
Based on the abo~~e described information, this small business loan is an eligible activity under the
Couut~~~s Business Expansion and Retention Revoh~ing Loan Fund.
The amount of CDBG funds to be loaned to the borrower, at the proposed terms, has been dctcnnincd to be
appropriate to achieve the projcei's expected public benef7t.
Rcvic~led bv:
Starlyn Brown, Deputy, Assistant Chief Administrative Officer, Butte County
Rev. 2-2110199