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CIl ~ OF SAN BERNARDI' t) - REQUr 1T FOR COUNCIL AC' :ON
"'.
From: KENNETH J. HENDERSON, DIRECTOR
Subject: CAPITALIZATION OF SMALL BUSINESS LOAN
PROGRAM
Dept: COMMUNITY DEVELOPMENT
Date:
JANUARY 8, 1987
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Synopsis of Previous Council action:
On November 3, 1986, the Mayor and Common Council approved in concept the transfer
of the San Bernardino Economic Development Council Small Business Loan Program to
to the City.
On December 8, 1986, the Mayor and Common Council approved the transfer of the
SBEDC Small Business Loan Program to the City and established the City of San
Bernardino Small Business Revolving Loan Program with appropriate guidelines and
standardized loan agreement.
On January 5, 1987, the Mayor and Common Council considered capitalization of the
City Small Business Loan Program and continued the matter to January 19, 1987.
Recommended motion:
Move to approve allocation of a fifty-fifty (50/50) basis approximately $726,413,
in one percent (1%) IDB funds to the City of San Bernardino Community Development
Department and the San Bernardino Economic Development Council, and, further that
the City Attorney's Office be directed to prepare a resolution allocating future
fund proceeds to City Community Development Department.
Contact person:
Ken Henderson
Phone:
5065
Supporting data Ittached:
Staff Report
Ward:
1-7
FUNDING REQUIREMENTS:
Amount: Approx. $363,206
Source: (ACCT. NO.)
(ACCT. DESCRIPTION)
IDB ONE PERCENT FEE
Finance:
Council Notes:
1/1?/H7 Council Mtg.
75,0262
Agenda I tern No,
I
C~'TV .OF SAN BERNARDI.'O - REQUFctT FOR COUNCIL AC"'-'ON
STAFF REPORT
On January 5, 1987, the Mayor and Common Council considered appropriat-
ing anticipated one percent (1%) IDB fee revenues to the City Community
Development Department and to the San Bernardino Economic Development
Council (SBEDC) on a fifty-fifty (50/50) basis and authorizing the City
Attorney to prepare a resolution allocating future fund proceeds to the
City. The matter was continued to January 19, 1987 with staff re-
quested to provide an administrative budget, including appropriate
staffing, the estimated number of loans to be made, and program income
from current outstanding loans assumed from SBEDC.
With respect to income received from current outstanding loans, the
following summarizes the loans and lease/purchase agreements assumed by
the City:
Business Loan Amount/Interest ~ Mo. Pymt. Term
Buttercup Bakery $ 70,000/10.5% LD/Amortized $ 920.83 7 years
Option House** $246,000/ inc1. in Lease/Purch. $ 684.00 -------
lease
Don's Drug Store Lease w/purch. option Lease $1,500.00 10 years
Cajun's Seafood $ 20,000/8 % Amortized $ 191.13 15 years (5 yr CD)
Foothill/Meridian P1. $ 60,000/7% Amortized $ 465.18 20 years (15 yr CD
Heritage House $ 75,000/10% Quarterly Int. $1,875.00 Due 5/17 /87
Parking Lot Pymt. Only
La Esperanza* $326,000/10% Amortized $1,700.00 15 years
Julia's Enterprises $ 30,000/8% Amortized $ 363.98 10 years (5 yr CD)
Community Financial $ 60,000/10% Amortized $1,274.82 5 years
Services*
Progressive Mortgage $ 27,314/7% Deferred $ 245.51 15 years
Operation Second $200,000/12% Amortized $4,500.00 2 years
Chance*
*La Esperanza and Operation Second Chance are technically in default. Operation Second
Chance is going through bankruptcy proceedings.
**Option House is not current with its payments and Community Financial Services had
six (6) monthly payments deferred from November 1, 1986 to April 1, 1987.
When all of the above is taken into account, only $3,441.12 in payments
is received on a monthly basis plus quarterly interest payments of
$1,875.00 on the Heritage House Parking Lot. Actual monthly program
income should be $11,845.450.
At the January 5, 1987 Council meeting there was a brief discussion
regarding staffing of the economic development loan program function.
Up until the current fiscal year, the City's CDBG grant averaged about
$2.2 million per year. Authorized administrative staff was sixteen
(16) full-time equivalents (FTE's) for fiscal year 1978/1979 and
75-0264
1/8/87
fifteen (15) FTE's for fiscal years 1979/1980, 1980/1981, and
1981/1982. with the merger of Community Development with the Re-
development Agency in November, 1981, the staffing level was gradually
reduced to nine (9) authorized positions primarily to reduce the size
of the administrative budget and provide more funding for community
projects.
Late last year the Mayor and Common Council authorized the separation
of the Community Development Division from the Redevelopment Agency and
its incorporation into the City Administrator's Office. When Community
Development was part of the Redevelopment Agency, only one (1) clerical
position was necessary, inasmuch as the Agency had a front office
receptionist. With the separation, only one (1) clerical position
(secretary) is assigned to the Department. An additional clerical
position is needed whether or not funding is actually provided to
Community Development to implement the economic development program.
During the above referenced Council meeting, staff was requested to
justify additional staffing requests, provide an administrative budget
and estimate the number of loans to be made with the IDB fee proceeds.
Currently, staff administers all of the CDBG projects approved by the
Mayor and Common Council, three (3) separate loan programs, the
Neighborhood Rehabilitation Program (NRP), Rental Rehabilitation
Program (RRP) and Section 312 program, respectively, and the mortgage
revenue bond and various housing programs. Presently, there is one (1)
Rehabilitation Coordinator who oversees the administration of the three
(3) loan programs described above with assistance from one (1) loan
office and two inspectors.
Based upon the number and type of loan programs currently administered
by the Department, I feel we cannot assume additional functions and
loan programs without the proper funding and staffing. As such, the
following represents the administrative budget necessary to implement
the economic development program:
Salari~~
Loan Officer (Range 1111 A/B)-$26,482 at 100% of time:
Sr. Steno Clerk (Range 1071 A/B)-$16,150 at 25% of time:
$ 26,482
$ 4,037
Fringe Benefits
Loan Officer/100% of time:
Sr. Steno Clerk/25% of time:
$ 7,415
$ 1,130
11arketing
Advertising:
Brochures:
$ 3,000
$ 1,500
Travel, Conferences/Seminars:
$ 2,000
Rent
116 square feet at $1.25:
$ 1,740
Loans:
$315,902
1/8/87
$363,206
The average loan is estimated to be $30,000 with a program-mandated
maximum of $50,000. As such staff feels 10.5 loans can be made with
the initial capitalization of $363,206. Currently on file are the
following applications:
American Medical Devices:
Cajun Seafood:
RW Enterprises:
Sam Johnson:
Ed Reincke:
$250,000
$ 25,000 (approximately)
$ 50,000
$ 80,000
$150,000 (approximately)
$555,000
With an initial capitalization of $363,206 and revenues from future
mortgage, commercial and industrial bonds, the economic development
program could commence on a relatively firm financial foundation.
Staff recommends adoption of the form motion.
~~~
Kenneth J. Henderson, Director
Community Development Corporation
KJH/ lab
file: sblpstaffreport
1/8/87
cp......y OF SAN BERNARDI"O - REQlJ~ST FOR COUNCIL A~TION
From: KENNETH J. HENDERSON, DIRECTOR
Oept: COMMUNITY DEVELOPMENT
Date: DECEMBER 12, 1986
Subject: INDUSTRIAL DEVELOPMENT BOND (IDB)
ONE PERCENT (l~) FEE
Synopsis of Previous Council action:
The Mayor and Common Council previously adopted resolutions numbered 81-411,
82-379 and 83-75 establishing and capitalizing the San Bernardino Economic
Development Council revolving loan fund.
Recommended moti.on:
ADOPT RESOLUTION "A" with amount to be granted to SBEDC specified at $
OR
ADOPT RESOLUTION liB" with amount to be granted to SBEDC specified at $
W 0sl~~
Contact person: Ken Henderson
Phone:
5065
Supporting data attached: Staff Report
Ward:
1-7
FUNDING REQUIREMENTS:
Amount:
NIA
Source:
Finance:
Council Notes:
7!>-0262
12/22/86 Council
Agenda Item No. 0<...
C."Y' OF SAN BERNARDlt40 - REQUEST FOR COUNCIL ACTION
STAFF REPORT
At the December 13, 1986 Ways and Means Committee meeting,
the Committee requested an item relating to the one percent
(1%) IDB fee be placed on the agenda of the Mayor and Common
Council for the December 22, 1986 meeting. At the December
8, 1986 meeting of the Mayor and Common Council, Community
Development and SBEDC staff were directed to prepare a report
indicating how the IDB fee could be used to capitalize the
small business loan program and SBEDC's marketing program.
Traditionally, these funds have been utilized to fund the
revolving program previously administered by SBEDC and
assumed by the City on December 8, 1986. Staff was requested
to report back to Council at the January 5, 1987 meeting.
During the Ways and Means Committee meeting noted above,
$400,000+ was recommended from the IDB fee proceeds to
finance, among other things, the baseball team club house,
bleachers and sewer lines. The attached resolution wAw,
prepared for but not considered at the December 8, 1986 .
meeting of the Mayor and Common Council and only addresses
the small business loan program and the SBEDC marketing
program as recipients of the one percent (1%) IDB fee.
Resolution wBft authorizes financial assistance for the
capital improvements at Fiscalini Field, allocates an un-
specified amount to SBEDC for its marketing program and
authorizes the City to retain the one percent (1%) IDB fee
for its small business economic development program.
Staff recommends the Mayor and Common Council consider
adoption of resolution WAW or resolution WBft.
~
Kenneth J. Henderso , Director
Community Development Department
KJB/lb
file: staffreportidb
12/17/86
7S..026.
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A
RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO RELATING TO THE
FUNDING OF THE REVOLVING LOAN FUND TRANSFERRED FROM THE SAN
BERNARDINO ECONOMIC DEVELOPMENT COUNCIL TO CITY'S COMMUNITY
DEVELOPMENT DEPARTMENT, AND PROVIDING INITIAL FUNDING FOR THE SAN
BERNARDINO ECONOMIC DEVELOPMENT COUNCIL'S MARKETING PROGRAM.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. Recitals.
A. By Resolution No. 81-411, City approved an agreement
with the San Bernardino Economic Development Council, Inc., for
the establishment of a revolving loan fund to encourage
commercial and industrial development within the City.
That
agreement has been amended pursuant to Resolution No. 82-379 and
Resolution No. 83-75.
B. City and San Bernardino Economic Development Council,
Inc., have now agreed that the revolving loan fund formerly
operated by the San Bernardino Economic Development Council,
Inc., can best be operated by the City's Community Development
Department, and the City has adopted a resolution approving an
agreement with the San Bernardino Economic Development Council
providing for assumption by the Community Development Department
of all economic development loans outstanding with the San
Bernardino Economic Development Council.
C. The Mayor and Common Council are advised that the
Finance Director of the City of San Bernardino presently holds,
for delivery upon proper request, certain funds in the City's
industrial revenue reserve and development fund, consisting of
approximately $250,000, as a result of certain revenue bonds
previously sold by City, and approximately $435,000 for bonds
12/18/86
1
1 sold but not yet out of escrow will be forthcoming, but perhaps
2 not until 1988. A one percent (1\> reserve fee on revenue bonds
3 issued comprise the source of this account. Additional funds are
4 expected as follows: $86,000 from the sale of Sandalwood bonds,
5 expected this month, and approximately $299,000 from SistecSof
6 Charity of the Incarnate Word, expected to be received in
7 February or March of 1987. Funds from the one percent (1%> fee
8 have previously been utilized for the purpose of funding the San
9 Bernardino Economic Development Council, Inc., revolving loan
10 fund.
11 SECTION 2. Imolementation.
12 A. In order to provide initial funding for a proposed
13 marketing program to be conducted by the San Bernardino Economic
14 Development Council, Inc., for creation and expansion of
15 commercial and industrial opportunities within the City of San
16 Bernardino, and the marketing of the benefits of this City to
17 prospective industrial and commercial operators, the Finance
18 Director of the City of San Bernardino is hereby authorized and
19 directed to transfer forthwith to the San Bernardino Economic
20 Development Council, Inc., the sum of $ ,
21 following which the Mayor and Common Council will consider
22 additional funding when and as needed, upon submission of a
23 program involving participation by both the private and public
24 sectors.
25 B. The remaining present balance in the industrial revenue
26 bond reserve and development fund shall be transferred by the
27 Finance Director to the revolving loan fund established for the
28 Community Development Department of the City of San Bernardino,
12/18/86
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to be utilized in accordance with the guidelines established for
that department's small business development revolving loan fund.
C. The City Clerk of the City of San Bernardino is hereby
directed to notify the San Bernardino Economic Development
Council, Inc., that no additional funding under the contracts
referred to in Section I above shall be forthcoming from the City
of San Bernardino except upon specific approval of the Mayor and
Common Council, following the submission of a program for the
marketing activities to be undertaken by said San Bernardino
Economic Development Council, Inc.
D. The Finance Director is authorized to transfer to the
revolving loan fund of the Community Development Department, upon
appropriate request from that department, any future funds
deposited in the industrial revenue reserve and development fund,
subject, however, to further direction by the Mayor and Common
Council in the event that additional funding is sought by and
approved for the marketing program of the San Bernardino Economic
Development Council, Inc.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a meeting thereof, held on the
day of , 1986, by the following vote, to
wit:
/ / / / /
/ / / / /
12/18/86
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City Clerk
The foregoing resolution is hereby approved this
of , 1986.
AYES:
NAYS:
ABSENT:
Council Members
day
Mayor of the City of San Bernardino
Approved as to form:
~t1fn&v
12/18/86
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e
RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO RELATING TO THE
FUNDING OF THE REVOLVING LOAN FUND TRANSFERRED FROM THE SAN
BERNARDINO ECONOMIC DEVELOPMENT COUNCIL TO CITY'S COMMUNITY
DEVELOPMENT DEPARTMENT, PROVIDING FOR FUNDING OF CAPITAL
IMPROVEMENTS TO FISCALINI FIELD, AND PROVIDING INITIAL FUNDING
FOR THE SAN BERNARDINO ECONOMIC DEVELOPMENT COUNCIL'S MARKETING
PROGRAM.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. Recitals.
A. By Resolution No. 81-411, City approved an agreement
with the San Bernardino Economic Development Council, Inc., for
the establishment of a revolving loan fund to encourage
commercial and industrial development within the City. That
agreement has been amended pursuant to Resolution No. 82-379 and
Resolution No. 83-75.
B. City and San Bernardino Economic Development Council,
Inc., have now agreed that the revolving loan fund formerly
operated by the San Bernardino Economic Development Council,
Inc., can best be operated by the City's Community Development
Department, and the City has adopted a resolution approving an
agreement with the San Bernardino Economic Development Council
providing for assumption by the Community Development Department
of all economic development loans outstanding with the San
Bernardino Economic Development Council.
C. The Mayor and Common Council are advised that the
Finance Director of the City of San Bernardino presently holds,
for delivery upon proper request, certain funds in the City's
industrial revenue reserve and development fund, consisting of
approximately $250,000, as a result of certain revenue bonds
12/18/86
1
1 previously sold by City, and approximately $435,000 for bonds
2 sold but not yet out of escrow will be forthcoming but perhaps
3 not until 1988. A one percent (1\> reserve fee on revenue bonds
4 issued comprise the source of this account. Additional funds are
5 expected as follows: $86,000 from the sale of Sandalwood bonds,
6 expected this month, and approximately $299,000 from Siste~of
7 Charity of the Incarnate Word, expected to be received in
8 February or March of 1987. Funds from the one percent (1\> fee
9 have previously been utilized for the purpose of funding the San
10 Bernardino Economic Development Council, Inc., revolving loan
11 fund.
12 SECTION 2. Imolementation.
13 A. In order to provide initial funding for a proposed
14 marketing program to be conducted by the San Bernardino Economic
15 Development Council, Inc., for creation and expansion of
16 commercial and industrial opportunities within the City of San
17 Bernardino, and the marketing of the benefits of this City to
18 prospective industrial and commercial operators, the Finance
19 Director of the City of San Bernardino is hereby authorized and
20 directed to transfer at such time as the Finance Director
21 determines to the San Bernardino Economic Development Council,
22 Inc., the sum of $ , following which the Mayor and
23 Common Council will consider additional funding when and as
24 needed, upon submission of a program involving participation by
25 both the private and public sectors.
26 B. The Finance Director is authorized to transfer, when
27 such funds become available within the industrial revenue reserve
28 and development fund, the sum of $400,000 to finance certain
12/18/86
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1 capital improvements at Fiscalini Field as authorized by the
2 Mayor and Common Council.
3 C. The remaining present balance in the industrial revenue
4 bond reserve and development fund shall be transferred by the
5 Finance Director to the revolving loan fund established for the
6 Community Development Department of the City of San Bernardino,
7 to be utilized in accordance with the guidelines established for
8 that department's small business development revolving loan fund.
9 D. The City Clerk of the City of San Bernardino is hereby
10 directed to notify the San Bernardino Economic Development
11 Council, Inc., that no additional funding under the contracts
12 referred to in Section 1 above shall be forthcoming from the City
13 of San Bernardino except upon specific approval of the Mayor and
14 Common Council, following the submission of a program for the
15 marketing activities to be undertaken by said San Bernardino
16 Economic Development Council, Inc.
17 E. The Finance Director is authorized to transfer to the
18 revolving loan fund of the Community Development Department, upon
19 appropriate request from that department, any future funds
20 deposited in the industrial revenue reserve and development fund,
21 subject, however, to further direction by the Mayor and Common
22 Council in the event that additional funding is sought by and
23 approved for the marketing program of the San Bernardino Economic
24 Development Council, Inc.
25 I HEREBY CERTIFY that the foregoing resolution was duly
26 adopted by the Mayor and Common Council of the City of San
27 Bernardino at a meeting thereof, held on the
28 day of , 1986, by the following vote, to
wit:
12/18/86
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AYES:
Council Members
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1986.
Mayor of the City of San Bernardino
Approved as to form:
~&~~Z/
C1.ty Attorney
12/18/86
4
CI\ , OF SAN BERNARDl .0 - REQUr IT FOR COUNCIL A( 'lION
From: Councilwoman Esther Estrada
Subject: General Obligation Bonds
Dept: Council Office
Date: January 8, 1987
Synopsis of Previous Council action:
NONE
Recommended motion:
To discuss Government Obligation Bond financing
rc
~", ~,i;.
Signature
-...,.
Contact person:
Phil Arvizo
Phone:
1:)1ElR
Supporting data attached:
Ward:
FUNDING REQUIREMENTS:
Amount:
Source:
Finance:
Council Notes:
75-0262
Agenda Item No
~