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RESOLUTION (ID #3296) DOC ID: 3296 J
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Grant
From: Allen Parker M/CC Meeting Date: 07/07/2014
Prepared by: Brandon Mims, (909) 384-5122
Dept: City Manager Ward(s): All
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing
Substantial Amendment #1 to the 2014-2015 HUD Action Plan to Fund Various Community
Development Projects. (At Meeting of June 16, 2014, Item Continued to June 23, 2014; Item
Continued to July 7, 2014) (#3296)
Current Business Registration Certificate: Not Applicable
Financial Impact:
No financial impact.
Mayor to open the hearing. . .
Motion: Continue to July 21, 2014.
Synopsis of Previous Council Action:
On April 21, 2014 the City Council adopted the 2014-2015 Housing and Urban Development
(HUD) Department Action Plan.
Background:
As a recipient of federal funding from the U.S. Department of Housing and Urban Development
(HUD) the City is required to prepare and submit to HUD an Annual Action Plan. The Annual
Action Plan generally describes how the City will utilize and distribute funds between eligible
activities during the program year. The City Council approved the 2014-2015 HUD Action Plan
on April 21, 2014.
Amendments or changes to the Action Plan can only be made through the City's adopted
Substantial Amendment/Citizen Participation Process, which requires that the entire text of the
proposed amendment be made available for reasonable public review and comment period.
Following the public comment period the City Council will conduct a public hearing during
Council Meeting to consider the proposed changes to the Annual Action Plan. At the conclusion
of the public hearing, the proposed changes may be adopted as part of the Annual Action Plan.
Federal regulation requires that HUD be notified of all changes to the City's Action Plan. An
updated Plan and/or activity listing will be forwarded to HUD upon final approval by the City
Council.
Proposed Amendments
Pursuant to the city's adopted Citizen Participation Process the following projects are proposed
to be added to the 2014-2015 Action Plan by substantial amendment:
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Job Referral Service-$350,000 Prior Year Funding
The Job Referral Service (JRS) is a FREE applicant/employer referral service offered through
the City of San Bernardino. The program assists individuals 18 and over with finding jobs with
local employers and local employers with hiring San Bernardino residents in need of
employment. Not a job training program, JRS would contact local businesses to determine job
opportunities, post the job opportunities on a City's website on behalf of employers, pre-screen
applicants, facilitate referrals of qualified candidates and organize and promote on-site
recruitments. Employers would provide any needed job training. JRS would provide free job
referrals to job applicants and assist in resume writing and other job preparation endeavors such
as mock interviews. JRS is committed to promoting the quality of life and economic vitality in
the community by matching the employment needs of the business community with the
employment needs of local residents. JRS will work collaboratively with other job training and
placement agencies, educational institutions and the City's non-profit partners.
Economic Development Loan-$750,000 of Prior Year Funding
The Business Economic Development Loan Program (BEDLP) is designed to stimulate
economic development activity by assisting San Bernardino's private sector to create or retain
jobs for low and moderate income (LMI) persons. The program assists businesses by making
fixed-rate financing available to them at reasonable interest rates and by providing public
improvements in support of economic development activities. BEDLP provides flexibility in
interest rates and loan terms to complement conventional business financing and other State and
Ce Federal business financing programs. BEDLP funding can provide payment deferments, lower
payments in the first year, and interest-only payments. BEDLP funds are intended to be used in
situations where a funding gap exists and alternative sources of public and private financing are
not adequate.
JC Supplies
JC Supplies, Inc., a private manufacturing company currently situated in Ontario, California,
meets the eligibility requirements for a BEDLP loan and has proposed to move their business
Ioperations to the City of San Bernardino (Exhibit B). The proposed economic development loan
will:
• Create 25 jobs in the community,
• Increase sales tax revenue,
• Increase property tax revenue on commercial building sale,
• Foster local business development, and
• At peak operations,will create up to an additional 52 jobs.
The baseline term of the proposed loan will be:
• Five Year deferral of payments
• 50%payback after five(5)Years at prime lending rate plus 1%
• Maintain 22 jobs new jobs in the City for five (5) years
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Applicant is a SBA Faith Based Small Business Summit award winner, and loan is in partnership
with Wells Fargo Bank requesting 20-year $1,312,500 CDC debenture to augment Bank's 10-
year $1,687,500 term facility (with 25-year amortization) to support real estate acquisition of an
office building, parcel 0266-363-56-0000 in San Bernardino, California. The applicant Lightcap
Industries dba: JC Supply' & Manufacturing operates manufacturing company in Ontario,
California. They will be moving from this location to the newly purchased building. Buyer and
seller have come to agreement, via purchase agreement dated February 2014 and amended May
21, 2014, to purchase the property for $3,700,000. The applicant, Connie Lightcap, will be
injecting 19% into the project from business funds. Borrower will occupy 100% of the subject
property moving forward. Title to the property will be in the name Lightcap Industries. The
manufacturing building at 4010 Georgia Blvd (known as 2239 Gannet Parkway until 2008 when
the city renamed the street). The two-story structure has office space; 7 dock high doors; 7 load
levelers; 4 ground level doors; 9,000 amps, 277/480 volts, 3 phase power with concrete tilt-up
construction. The property is .26 miles northwest of Interstate 215 and University Parkway in
northern San Bernardino. The site is within a light industrial and residential area, bordered by
Georgia Boulevard to the east and the railroad tracks to the west.
The borrowers are also seeking to refinance their equipment with Wells Fargo and some credit
facilities that they have with Community Bank. The borrower is exploring opening a new
location in the mid-west because of an increase in sales in the area, due to the work of two sales
people they brought on board two years ago. They are seeking to explore putting together the
infrastructure through their financing with a new lender to facilitate their expansion. The
financing proposed is completely separate from this transaction and is still being negotiated. The
new financing documentation has been provided only for the purpose of analyzing the viability
of the company to cover their debt following both transactions, and since the bank submitted the
proposal as an entire package.
Ownership demonstrates commitment to this project, as she will contribute $700,000 (19%) into
the project as the cash down payment required prior to escrow closing. The applicant's down
payment will come from business and personal funds. $100,000 of the deposit has already been
paid to escrow.
The bank would not offer financing to borrower without SBA assistance as the loan request
exceeds the lender's conventional advance rate for this type of property.
Company History
JC Supply was established May 7, 1998. Initially their primary business platforms were
distribution of paving materials; rebar splicing and building products for the precast segment of
the concrete construction markets. They prospered in the transportation sector due to business
enterprise programs specifically DBE/SBE/UDBE/WBE coupled with the mandate of products
of domestic origin contract requirement for infrastructure projects. In 2006 they received a major
contract to supply load transfer dowels and assemblies for the LAX Airbus Taxiway. JC
proposed its participation in the manufacturing process in a joint venture and in agreement with
their supplier a major manufacturer. When the supplier was unable to perform JC began to build
equipment and secure raw materials and was able to complete the project on time and on budget.
They became a competitor to their supplier in the airport segment of the concrete paving market.
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They determined that their future depended on being self-sufficient in all segments of
manufacturing - requiring major financial investment and a major move to a facility able to
moo" support the manufacturing growth. Today on 9.3 acres with 130,000 square feet of
manufacturing under roof, their commitment to excellence drives everyone at JC Supply and
Manufacturing to deliver. The manufacturing process is designed for ultimate quality and
flexibility. The company is driven by their dream vision for the consideration of a new limited
business enterprise "BY THE PEOPLE AND FOR THE PEOPLE" as they literally participate in
the building of the very foundation of the county.
Their founder, Connie Lightcap speaks to the DREAM: "Heading Providence, inspired by a
DREAM, and rooted in old time American Values this new business enterprise draws on
individualism, exceptionalism, and sacrifices forsaking unjust enrichment, has led to a
restoration of hope and a rekindling of the American Dream. JC Supply&Manufacturing birthed
by opportunity, tempered in adversity, sustained by passion and committed to ingenuity for the
common good. With its essence of Respect, Integrity, Synergy, and Enthusiasm, we will RISE,
optimizing the benefits of capitalism, balanced by the scales of social justice, which has led to a
restoration of trust. JC Supply has experienced miraculous growth and prosperity in spite of a
shattered economy. JC Supply & Manufacturing currently pays approximately $50,000 per
month in rent. This amount has been added back as the principal and interest payments of
$18,222 per month will replace this rent payment. The business manufactures load transfer
materials - such as dowels/baskets used in concrete paving. Additionally they do miscellaneous
structural metal work. They serve the western United States. Their biggest competitor is
American Highway Technology of southern California. Key customers include Accurate
Technology, Jetline Engineering, and Birchwood Technology. Competitors include Santa Ana
companies: Carich Enterprises and A&A Tool and Die.
Management
Connie Lightcap has been managing the company since its inception in 1998. As the company
has continued to grow she hired Manuel Gonzales to direct the manufacturing operations in
2007.
Loan Objective
The loan will enhance community and area development, provide financing for a manufacturing
enterprise, and support a women-owned business in a labor surplus area. NOTE: The final loan
documents will be approved separate from this substantial amendment process in a subsequent
Council item.
PUBLIC REVIEW TIMELINE
In accordance with federal regulations the cited amendment will be available for public review
and comment until July 15, 2014. A copy of the full amendment (staff report and resolution) is
available for review in the City Manager's Office and City Clerk's Office, 300 North "D" Street,
San Bernardino, CA, 92418. You may also request a digital copy of the amendment by e-
mailing Mims Brgsbcity.org your request prior to July 15, 2014 at 5:00 p.m. Public comments
will also be recorded in the minutes of the public hearing which is tentatively scheduled for JuIY
28, 2014.
Updated:7/2/2014 by Georgeann"Gigi"Hanna J Packet Pg. 821
3296
City Attorney Review:
Supporting Documents..
reso 3296 (PDF)
Exhibit A-FROM JUMPSTART TO BEYONED (DOCX)
Exhibit B -Brochure (PDF)
Exhibit B -February 2014 interims (PDF)
Exhibit B- ampaccdc @gmail.com_20140609_180812 (PDF)
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1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING SUBSTANTIAL AMENDMENT #1 TO THE
3 2014-2015 HUD ACTION PLAN TO FUND VARIOUS COMMUNITY
4 DEVELOPMENT PROJECTS.
5
WHEREAS, as a recipient of federal funding from the U.S. Department of Housing _
6
7 and Urban Development (HUD) the City is required to prepare and submit to HUD an Annual 0-c
8 Action Plan that describes generally how the jurisdiction proposes to use Community a
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9 Development Block Grant (CDBG), Home Investment Partnership (HOME) program, and c°v,
10 Emergency Solutions Grant (ESG) program; and
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11 WHEREAS, amendments or changes to the Action Plan can only be made through the o
12
r City's adopted Substantial Amendment/Citizen Participation Process, which requires that the
13 E
14 entire text of the proposed amendment be made available for reasonable public review and
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15 comment period; and
16 WHEREAS, pursuant to the city's adopted Citizen Participation Process the following N
17 projects are proposed to be added to the 2014-2015 Action Plan by substantial amendment: co
18 N
Youth Services/Youth Employment- $350,000 Prior Year Funding
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20 San Bernardino Youth Employment Services (SBYES) is a FREE applicant M
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21 referral service offered through the City of San Bernardino. The program assists
22 youths age 16+ with finding jobs and local employers with finding qualified E
23 applicants. SBYES staff will work specifically with San Bernardino businesses to Q
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compile and post job listing information, prescreen possible candidates and facilitate
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26 referrals of qualified applicants. The program may also offer subsidies to businesses
27 that choose to hire local youth.
28 SBYES is committed to promoting quality of life and economic vitality in the
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I community by matching the employment needs of the business community with the
2 employment needs of program participants. SBYES will work collaboratively with the
3 San Bernardino Employment and Training Agency (SBETA) State of California
4 Employment Development Department, San Bernardino Community College District
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and Unified School District, County of San Bernardino Employment Services, and the
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7 City's non-profit partners. o
8 Homeless Access Center- $1,000,000 of Prior Year Funding Q
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9 Through its approval of Project Jump Start, a program aimed at reducing F
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10 homelessness, the City authorized further exploration of funding opportunities, N
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including allocating $1,000,000 of Community Development Block Grant (CDBG) °
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13 funds to the design, planning, and construction of a Homeless Access Center as
14 detailed in Exhibit"A,""Project,lump Start Proposal."
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15 Economic Development Loan -$750,000 of Prior Year Funding
16 The Business Economic Development Loan Program (BEDLP) is designed to v
17 stimulate economic development activity by assisting San Bernardino's private sector
18
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to create or retain jobs for tow and moderate income (LMI) persons. The program v
19
20 assists businesses by making fixed-rate financing available to them at reasonable o
N
21 interest rates and by providing public improvements in support of economic (D
22 development activities. BEDLP provides flexibility in interest rates and loan terms to E
23 complement conventional business financing and other State and Federal business a
24
financing programs. BEDLP funding can provide payment deferments, lower
25
26 payments in the first year, and interest-only payments. BEDLP funds are intended to
27 be used in situations where a funding gap exists and alternative sources of public and
28 private financing are not adequate.
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I JC Supplies, Inc., a private manufacturing company currently situated in
2 Ontario, California, meets the eligibility requirements for a BEDLP loan and has
3 proposed to move their business operations to the City of San Bernardino (Exhibit
4 "B"). The proposed move will result in a total increase of 25 jobs in the community.
5
Based on the proposed job retention/job creation objectives of the project, staff is
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proposing to issue a$750,000 loan to JC Supplies with the following baseline terms:
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8 1) Five Year deferral of payments; Q
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9 2) 50% payback after five (5) Years at prime lending rate plus I%; N
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3) Maintain 22 jobs new jobs in the City for five (5)years. °
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13 NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON QE
14 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
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SECTION 1. That the City Council, through "Substantial Amendment #1 to the
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17 2014-2014 Action Plan" and pursuant to HUD approval, will commit Community
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18 Development Block Grant(CDBG) funds to the following projects as follows:
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19 1. Youth Services/Youth Employment-$350,000 Prior Year Funding
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20 2. Homeless Access Center-$1,000,000 of Prior Year Funding
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3. Economic Development Loan-$750,000 of Prior Year Funding
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24 SECTION 2. That funding for the proposed projects shall be appropriated into the
25 City's 2014-2015 Budget in account number 100-119-0014-5502.
26 SECTION 3. That a copy of the complete Substantial Amendment shall be available
27
for public review for a period not less than thirty (30)days.
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1 SECTION 4. That a copy of the complete Substantial Amendment shall remain on
2 file in the City Clerk's Office for future review.
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1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING SUBSTANTIAL AMENDMENT #1 TO THE
2 2014-2015 HUD ACTION PLAN TO FUND VARIOUS COMMUNITY
DEVELOPMENT PROJECTS
3
4
5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
6 and Common Council of the City of San Bemardino at a meeting ^_
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thereof, held on the day of , 2014, by the following vote,to wit: o
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Council Members: AYES NAYS ABSTAIN ABSENT LO
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MARQUEZ
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11 BARRIOS c
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12 VALDIVIA
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13 SHORETT E
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NICKEL Q
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JOHNSON �-
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17 MULVIHILL
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19 Georgeann Hanna, City Clerk
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20 The foregoing resolution is hereby approved this day of , 2014. N
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R. Carey Davis, Mayor 0
23 City of San Bernardino a
24 Approved as to form:
25 Gary D. Saenz, City Attorney
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AVON& 27 13�2
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FROM JUMPSTART TO BEYOND a
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HOMELESSNESS INTERVENTION ACTION PLAN n
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CITY OF SAN BERNARDINO
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Mayor Pro Tem '
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Hon. Virginia Marquez
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San Bernardino Police Department x
Jarrod Burguan,Chief of Police W
Mayor's Office:
Matthew Muir,Associate Legislative Aide
Michael W. McKinney, Chief of Staff 2
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Table of Contents
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Background and Summary................. .....3 0
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KeyPrinciples:.............................................................................................................................. .............4 c
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1. Ownership to Activity...................................................................................................................4
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2. The City Must Fund Strength""Not Need:.............................. N
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3. San Bernardino Must Recognize the"Magnet Effect" Does Exist: .........................................6 0
4. Maintain Field Experts ...........................6
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Central Drop-In &Service Access Center .............. ..............................6 =
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TransitionalHousing................................................................................................................................7
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Collaborative justice Courts....................................................................................................................7
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Cost Benefit Analysis - City of San Bernardino...................................................................................8 M
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SuggestedStrategy Outline:...................................................................................................................10 O
1. Identify a Central Beginning Point:...........................................................................................11 m
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11. Develop Measurable and Achievable Goals: ...........................................................................11 ~
III. Emergency Shelter,Evaluation and Transitional Providers:.............................................11 F
IV. Target the Most Vulnerable:...................................................................................................12 a.
V. Permanent Housing:....................................................................................................................1.3
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PlaitGraphic(Visual) .............................................................................................................................14
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SuggestedPlait Phasing..........................................................................................................................15 x
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Financial Impacts....................................................................................................................................1.6 E
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Side-by-Side Comparison.......................................................................................................................1.7 Q
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Background and Summanj:
Through an informal estimate based upon services provided,the City of San Bernardino
estimates nearly 2,000 unsheltered homeless persons reside within its borders. In February a
2014,Police Chief Jarrod Burguan initiated project"Jumpstart Downtown," a Downtown Core o
safety initiative which,in part,established contact with the homeless population in that region. Q
That focus will decrease after a 90 day period,returning to normal police operations. Project
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"Jumpstart," pointed out the need for San Bernardino to have a long-term goal addressing
homelessness and looking beyond the Project to the future needs of the community. Project N
"Jumpstart" also pointed out some of the deficiencies of the City's information relative to
homelessness,our partner agencies, and the methodologies under which we look at the issue o
overall. T'
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Over the course of Project Jumpstart over 250 contacts were made with homeless persons,115 E
field interviews with homeless took place,and 66 homeless camps were encountered and E
removed. Of the 115 field interviews that took place 18 homeless persons were willing to accept Q
service and services were available to assist. A summary of the assistance is as follows:
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• Three hotel vouchers were provided
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.go*-, 0 Three transitional housing appointments were given
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• Eight veterans of the United States Military were provided services N
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• Two were provided temporary shelter housing
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• One individual was placed by CASE Z
• One referral was made to the Salvation Army 0
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In addition to the 18,five were provided relocation assistance,through generous donations
from our business community, to be reunited with their families in locations of distance.
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The purpose of this policy paper is to outline a long-term vision for the City of San Bernardino �-
in dealing with homelessness issues and to seek approval for taking the next steps within the
guidelines included in this document. It is our belief that through this implementation a o
reduction in overall panhandling and vagrancy crimes will be achieved. W
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The program outlined below is an amalgamation of the successful projects launched within the
Cities of Ontario, Costa Mesa,and Santa Ana. It is designed to maximize usage of our public x
fundin g(primarily grant fundin g)to 1) address the at-risk population within our City and 2)to w
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work toward a solution that brings about permanent housing for our homeless residents. The
program is broken down into four(4)basic areas:
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Homelessness Initiative Plan
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➢ Homelessness Prevention Programs
➢ Central Drop-In/Access Center
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➢ Emergency Shelter/Treatment/Initial Services o
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➢ Permanent Housing 'r'
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Key Principles: N
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In order to create a measurement for dealing with the success of a long-term homelessness
initiative,the Mayor and Common Council must create certain policy directives that will define
the scope of the problem,change the methodology of our City's investments,and ultimately
create measurements for success that will allow for modifications or continuation of the c
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program. �E
The primary principles include:
1. Ownership to Activity sn
The City must recognize the issues and devise a strong policy initiative that aids our M
community in relieving the problem of homelessness. For San Bernardino,Project °w
Jumpstart Downtown was the beginning of recognition and action of a homelessness z
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plan-starting with a key central core and now working outward. w
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From the standpoint of looking for solutions within the confines of"Jumpstart" we have ~
taken ownership of the entire homeless population with the borders of the Downtown Q
Core. Pursuant to the County of San Bernardino's 2013 Homeless Count and U)
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Subpopulation Survey within the City,there are approximately 950 homeless residents
within San Bernardino. That population differs greatly from the nearly 2,000 estimated
homeless persons within the City's limits at any given time. An accurate count will O
provide the City with the magnitude of the issue and will govern the amounts of LL
services that need to be provided. In order for an accurate count,the following must be
accomplished: -2
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a. San Bernardino must establish who are our Homeless Residents:
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The City should establish criteria on a broad and inclusive basis to determine' U
"who" are the City's homeless residents. This will determine the size of the issue q
for the City of San Bernardino and will create accurate information to base the
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Homelessness Initiative Plan
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City's need for additional services. In addition,accuracy and inclusiveness
within the City to determine its residents will,in large part,protect the City from
Civil Liberty challenges. Criterion can be established from such items as:
i. How long has the person been in San Bernardino? a
ii. Have they worked in San Bernardino? o
iii. Do they have family within our City? a
iv. What is the general background-ties to the City?
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Recommendation.
Recommendation: • Bernardino
resident homeless" w
population.
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2. The City Must Fund Strength--Not Need: E
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The City's current focus has;heretofore,been based upon a funding strategy that centers
on the immediate need to provide emergency services and interim housing for our
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homeless population. This means that we are basing our funding on the need to handle Cn
emergency services(immediate placement,wrap around services,medical needs,and
intervention services) or transitional housing for the estimated 2,000 population. Our M
funding from County services,however;is based upon the 950 identified homeless. By
funding the immediate need,we are not providing a long-term solution to addressing Z
the homeless issue and may,in fact,be double counting individuals as transitional
housing releases them back to the streets. The City's funding should be focused on m
organizations that can work together to provide services,through a Central Drop-
In/Service Access Facility,as well as three(3) main areas-prevention of at-risk Q
population;emergency/transitional sheltering;and permanent housing. We must fund
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the strength of a solution as opposed to the immediate needs of homeless to stop the
revolving door effect that our current funding strategy allows.
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The net effect is to re-evaluate the public funding provided to our service providers U_
AND to better utilize funding not allocated at this time. Re-evaluation of our non-profit
service providers may be widely unpopular from their perspective-but the
performance provided during"Jumpstart"necessitates review as many services were at w
capacity or unable to assist in long-term solutions to homelessness.
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Recommendation: . U
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2014-201 as recommended by Staff within Budget Submital
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guidelines Recommendation:Instruct staff to re-evaluMe ziiid re-zilign speriding priorities to 1iorrieless 7
Initiative Action Plan c
3. San Bernardino Must Recognize the "Magnet Effect" Does Exist: C
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Providing services attracts those in need of services. Otherwise known as the"magnet
effect," it is the act of drawing an additional homeless population from nearby N
jurisdictions as a result of offering the services needed for care. From this perspective,
the City's heart and willingness to provide may exceed its financial capacity or the c®v
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political desire of our other residents. This means the City-while we should be very Z
broad in our openness-must limit services to those homeless residents defined under °
Item 2a in an effort to limit attracting adjacent jurisdiction's unsheltered homeless
population. By limiting the scope of the issue to those individuals defined as "resident E
homeless" the City addresses the needs while not providing a magnet to other
jurisdictions. E
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This also means establishing and enforcing proper vagrancy,panhandling,and loitering
ordinances within reasonable guidelines. While such laws have not been enforced
during"Jumpstart," they may be required as we move a portion of our homeless cn
population toward permanent housing in order to combat the effect of overwhelming
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our established infrastructure or increasing the population. M
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4. Maintain Field Experts: z
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We must maintain experts in the field that can provide adaptable solutions and become °o
partners with the City.
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Central Drop-In & Service Access Center a.
Without a central location for homeless persons to access,it becomes increasingly difficult for
them to seek the help that might be necessary. For the City, a Central Drop-In Center is W
beneficial because it will provide wrap-around services (defined in"Suggested Strategy Q
Outlines" part III) that will address multiple life domains,such as, safety and emotional,
physical, and mental needs. While not only benefiting the homeless in the City, this center will x
permit the SBPD to handle the homeless in need efficiently and allow them to return to service w
as soon as possible. With a central location to notify and deliver the homeless, the SBPD will be
able to attend to other pressing emergency matters.
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Owned by the City and operated by a sole-source provider,this Central Drop-In Center will
offer emergency housing services for the homeless of San Bernardino as well.Some of these
services will include balanced meals, storage for personal belongings, showers and restrooms,
washers and dryers, daycare options for homeless families,career counseling and training,basic a
medical care,crisis counseling,mental health and substance abuse treatment,and information o
about transitioning from homelessness to permanent housing. a
By making this a top priority,the quality of life of our City's unsheltered homeless population N
v
can be increased in a timely and effective manner. This also allows the City to define goals and c
achieve a scope of magnitude for other service areas. The final result is a reduction in CD
panhandling and vagrancy issues by diminishing the overall unsheltered homeless population. o
i Recommendation.-Establish a sole-source service provider for"Drop-In" services and
management of transitional services.
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Recommendation: Establish a location and a contractor for the building of the Central Drop- Q
In Center.
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Transitional Housing: 0)
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Transitional housing is defined as temporary housing intended to get homeless individuals and
families off the streets and into a safe living environment. Arguably,the City of San Bernardino Z
loses the second part of that definition,which is that transitional housing is often offered as part 0
of a wider transitional program. w
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From this perspective,additional transitional housing capacity is not a good investment. F-
Without an accurate count, a proper needs assessment of the homeless population,
identification of at-risk populations,a centralized"wrap around" service provider,an a
evaluation of our existing service providers,and a long-term permanent residence solution,the M
need to fund additional transitional housing capacity is imprudent(at least in the short term). o
Recommendation: ; Q
and staff re-evaluation of •
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Collaborative Justice Courts: Q
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The City of San Bernardino should support County efforts to increase awareness within the Q
judicial system and advocate for a collaborative Justice Court/Vagrancy Court that provides
alternative sentencing programs and alternative sentencing mechanisms for defendants that are
Packet Pg. 834
6.A.b
Homelessness Initiative Plan
Page 18
homeless. This would include increasing the capacity of the Homeless Court functions within
the County which help resolve many outstanding minor offenses arising out of the condition of
homelessness. This includes enforcement of vagrancy laws including illegal camping, drinking c
in public,and a variety of infractions and misdemeanors. These courts are currently centered a
within Ontario/Rancho Cucamonga serving the West Valley area of San Bernardino but may be o
expanded to include San Bernardino's new Justice Center. a
LO
The City Attorney's office of San Bernardino has met with the Presiding Judge of the Court to N
discuss the issue of providing collaborative justice courts. Currently,the east valley lacks c
available service providers within the area to effectuate needed change. If the City, however;
offers suggested resolution,pursuant to collaborate justice practices,such resolution are usually o
adopted based upon the person's willingness to enroll within a program.
a�
Recommendation: $
urts within eastern San Bernardino County. d
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Cost Benefit Analysis - City of San Bernardino:
Cn
Several solutions-based studies,including those of Salt Lake City,Utah and Phoenix,Arizona
have compiled analyses calculating the cost of maintaining the status quo with regard to the N
homeless population versus establishing a permanent housing solutions model. Several of our M
traditional efforts have shown that managing the homeless population has kept persons in a z
state of homelessness over the course of months and years by providing the ongoing emergency 0
resources without adequate resources to obtain and maintain sustainable permanent housing. m
O
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As a result,these studies have noted that homeless persons become frequent and lengthy users E-
of hospital services,emergency shelters,emergency assistance centers,and correctional facilities
primarily due to a lack of permanent housing options. These"hidden' costs to the City of San a
Bernardino are the result of ongoing intervention by: D
• Emergency Health Care Providers
• Paramedics
• Law Enforcement
• Emergency Responders x
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• Temporary/Transitional Housing ;
• Emergency Housing
U
As the chart below will show,there is a dramatic difference in the cost of masking the problem,
rather than fixing it. There was a study done in Reno,Nevada that followed a man named
Packet Pg. 835
6.A.b
Homelessness Initiative Plan
Page 1 9
Murray Burr. In the six months that he was observed,Murray cost the state of Nevada one
hundred thousand dollars in the form of medical bills. Because of his constant homelessness,
the state had to use a variety of services when dealing with Murray,such as medical treatment, S
temporary housing,and other emergency services.The study found that in his fifteen years of a
homelessness,he had cost the state about one million dollars total. While this example may be c
an extreme one,it displays the realities that surround temporary fixes to the homelessness a
issue.'
0
N
et
In addition,harder to calculate quality-of-life costs exist from homeless persons on local c
businesses,business districts (such as the Downtown Core),tourism,court systems, and public
r
facilities (e.g. Libraries and Parks). c
0
A rough analysis has been performed within the City of San Bernardino to determine the
m
overall costs of homelessness versus the cost of permanent housing. The analysis done differs -Ea
from some studies that show a greater than 50% difference between homelessness costs and ari
permanent housing. This is likely due to the large assumptions made within the Unsheltered Q
Homeless Costs and a more accurate study of Permanent Housing Costs that include
construction/rehabilitation and dwelling life for permanent housing options.
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1 MILLION-DOLLAR MURRAY. By: Gladwell, Malcolm, New Yorker, 0028792X,
2/13/2006,Vol. 82, Issue 1
Packet Pg. 836
IF
1
•
Service Provided Estimated- Estimated-
Unsheltered Homeless Costs Permanent Housing Costs
Fire Dispatch Calls $945.00/Call $945.00/Call
$1,890.0/Person $945.00Person
Police Dispatch Calls $140.00/Call $140.00/Call
$420.00/Person <$2.00/Person
Current Officer Time 120 minutes/Person
Allocation
-ER Visit $415.00/Visit $415.00/Visit
$830.00/Person $415.00/Person
Hospitalization $2,250.00/Day $2,250.00/Day
$6,750.00/Stay <$4,000.00/Stay
$20,250.00/Person
Mental Health Costs $150.00/Visit $150.0/Visit
$450:00/Person $3,150.00/Person
Emergency Housing $42.00/Day N/A
$126.00/Person
Transitional Housing $68.00/Day N/A
476.00/Person
Inpatient Detox $4,667.00/Admission N/A
Alcohol& Drug Treatment $47.00/Visit N/A
=Costs $235.00/Person
=Jail Time/Booking Costs $140.00/Booking N/A
Jail Time $68.00/Day N/A
$136.00/Person
Cost/Sq. Foot New N/A $110.00/sq. ft.
Permanent Housing
Cost/Sq. Foot Rehab N/A $130.00/sq.ft.
Permanent Housing
Cost/Day Permanent N/A $120.00/Person
Housing
Permanent Housing N/A $10,950.00
Cost/year by person
Cost Per Person $29,130.00 $15,460.00
Total Cost based upon Point- $27,527,850 $14,609,700
In-Time Count
Packet Pg. 837
Homelessness Initiative Plan
Page 1 11
I. Identify a Central Beginning Point:
Project"Jumpstart" utilized the Downtown Core as the optimal central location to begin a
moving outward within the City to identify the totality of the problem. This is not to 0
.2
suggest that homelessness in the Downtown Core is solved-it is suggesting that the a
Ln
City has significant momentum and information from"Jumpstart" to begin working
0
outward through other areas of the City.
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II. Develop Measurable and Achievable Goals: o
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Upon completion of the Key Principles and Outstanding Question,the City should
implement a long-term strategy that includes measurable goals within achievable E
timelines and works within the County's structure to assist in their data collection a)
without over-impacting services provided. ¢
Further,the City should establish measurable and achievable goals for its non-profit
service providers;thus making funding contingent upon meeting such objectives.
Recommendation: to develop measurable N
and achievable aoals for success within 45-days of adoption.
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III. Emergency Shelter, Evaluation and Transitional Providers: m
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Current protocol indicates that upon completion of field evaluation,homeless persons
¢
accepting services are transported to emergency,transitional,or medical institutions by U)
the San Bernardino Police. The net-effect is that it creates the confusion of finding 2
appropriate service providers with available capacity to accept those persons who have
agreed to services. 0
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The need for a central facility to provide both emergency shelter and wrap-around ¢
services is critical. Wrap-around is a philosophy of care with defined planning process
used to build constructive relationships and support networks. It is community based, w
culturally relevant,individualized, strength based,and family centered. Wrap-around
plans are comprehensive and address multiple life domains,including living E
environment;basic needs;safety;and social,emotional,educational,spiritual,and
cultural needs.Another de fining feature of a wraparound is that it is unconditional;if Q
interventions are not achieving the outcomes desired by the team,the team regroups to
Packet Pg. 838
Homelessness Initiative Plan
I' a oe 112
rethink the configuration of supports, services, and interventions to ensure success in
permanent home, school, and community settings. In other words,the more open these
service providers-the more effective the approach will be in terms of a solution.
a
This Central Drop-In Facility will provide an array of services to the homeless with a o
r
commitment to provide"whatever it takes," to get a homeless person stabilized into 0
Q
permanent housing. Wrap-around services provide homeless individuals and families 'n
with a number of services they need to stabilize their lives, such as,providing balanced N
meals,basic medical care,career counseling and training,and daycare options for
families. Doing"whatever it takes" is considered the most successful approach to
ending homelessness. This can be accomplished by combining wrap-around services o
with permanent housing. Meaning,we remove the barriers to current service providers
relative to drug and alcohol usage and maintain the safety of those most vulnerable.
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IV. Target the Most Vulnerable:
N
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The City of San Bernardino currently does not possess an"official" methodology for o
homelessness prevention programs. While some service-providers offer such services, z
they are secondary to their individual missions. w
CO
The SBPD is in a unique position to identify those in danger of becoming homeless
within the City. Initial Police contact is likely to be involved with those that are at the a
most critical stages of near homelessness. Training officers on how to deal with those
situations,establishing service-providers that can handle homeless prevention
programs,and implementing an "official" City policy concerning homeless prevention
programs is critical. p
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Packet Pg. 839
6.A.b
Homelessness Initiative Plan
Page 113
V. Permanent Housing:
A commitment to permanent housing for our City's homeless population should be
made. Provision of this housing can be provided through private operators utilizing an a
array of funding techniques including: r o
U
Q
a. Rapid Reinvestment
0
b. Tax Credits
c. §108 Loans N
d. Voucher Programs CD
e. Community Reinvestment programs through Community Development a
Financial Institutions
g
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This means recognizing the need for permanent housing in our City's zoning ordinances E
and holding providers to high-standards for performance.
a
Recommendation: construction/
Recommendation: Re-evaluate transitional housing spendirig based upon SBPD 90-Countly
and staff re-evaluation of N
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In order to proceed with the implementation of a long-term homelessness initiative several a
action items are required to establish short-term and long-term goals. As with Ontario,Costa Uj
Mesa,and Santa Ana,it is highly recommended the City partner with a sole-source provider of
intake,emergency, and permanent housing requirements (although several"developers" of
0
long-term housing may be required). This allows the City to establish a more single-point of
CD
contact to measure the performance of our overall homelessness initiative and removes the San
0
Bernardino Police Department as the key-intake,evaluation,and responsible agency.
c
1. Decisions that impact on the Short-Term:
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1. Establish Evaluation Criteria for San Bernardino's homeless population Q
(research)
i. Based on ties to the community,residency,family, and work history
2. Centralize under a sole-source provider for Drop-In;Wraparound;and future in
permanent housing needs (funding strength over need&maintain field experts) to
N
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3. Instruct City staff to begin looking at potential location sites for Drop-In Facility w
(programmatic) Z
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4. Freeze and Audit short-term funding to existing transitional housing providers 00
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(funding strength over need) F'
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5. Approve Measurable Goals to the Long-Term Homelessness Initiative N
a.
(measurements for success)
M
6. Begin Development or Augmentation of Prevention Programs(Prevention) 0
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II. Decisions that impact on the Long-Term Horizon: Q
1. Define permanent housing options and potential locations for zoning--Sole- w
source that location in order to say"it's coming" to our County partners
(Solutions)
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Packet Pg. 842
Homelessness Initiative Plan
Pa e 116
2. Implement modifications to funding priorities based upon the initiative's short-
term results and audit's results (Funding/Programmatic)
c
3. Implement and fund Prevention Programs (Prevention) a
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4. Work with Developers to initiate construction of long-term housing 4
requirements(Solutions)
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Financial Impacts. N
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General Fund expenditures will be reallocated under the initiative as primary calls for service to
unsheltered homeless and vagrancy will decrease and as Officer call-times are decreased by c
utilization of the Drop-In/Service Access Center. E
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For FY-2014-2015,existing Emergency Shelter Grant allocations in the amount of$200,000 have QE
been suggested for this purpose and$1M in permanent housing funding is suggested toward
Permanent Housing construction. Other Community Block Development Grants may be
allocated during this fiscal-year.
0
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The initiative plan calls for reallocation of public funding sources (ESG,CBDG,HUD-housing)
based upon the outcome of the suggested scoping count. For FY2014-2015 CDBG and HUD- M
housing monies are re-allocated at previous year levels. Overall the initiative plan shifts dollars °w
spent from the General Fund to other public sources of funding. No direct financial impact to Z
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the City is proposed within the initiative plan. w
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9:35 AM JC Supply& Manufacturing
03128/14
Accrual Basis Profit & Loss Prev Year Comparison
January through February 2014
Jan-Feb 14 Jan-Feb 13
Ordinary Income/Expense
Income
Sales-Customer OverpmtlPrepmt 5,557.89 4,125.18
4010-Sales 1,308,376.65 0.00 d
4012•Escalators-Steel/Wire 4,107.90 28,820.04 p
4013-Sales-Chemicals 315,399.65 184,666.70 Q
4015•Sales-Other 130,532.98 24,981.92 ua
T
4016.Sales-Load Transfer-Dowels 805,567.97 729,824.12 °
N
4017•Sales-Load Transfer-Baskets 96,412.63 1,283,825.82
T
4020•Freight Income 42,405.46 54,310.42 °
N
Total income 2,708,361.13 2,310,55420 d
O
Cost of Goods Sold
5100•Cost of Goods Sold 400,081.53 171,974.35
O
5140 Direct Labor- Foreman 33,328.96 32,242.73 E
5141 •Direct Labor-Production 107,969.46 52,724.46
N
5142 Labor Allocation to Inventory -14,689.49 14,613.57 E
5150 Cost of Goods Sold-Other 16,838.77 32,231.07 Q
5160-Freight Expense-COGS 60,349.28 54,681.22
5200-Raw materials-COGS-Dowels 1,192,514.63 1,265,733.37 ;a
AOO N
5201•COGS-Load Transfer-Baskets 4,790.00 0.00 -0
5220•Small Tools/Equipment 0.00 119.56 rn
5290•Consumables co
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Barline Consumables 13,580.98 6,977.64 N
M
BW Consumables 1,233.18 1,004.86 N
CCL Consumables 2,153.94 1,617,85 E
•L
Saw Consumables 16,409.28 2,683.98
SFW Consumables 7,055.01 7,651.96 d
Wire Drawer 2,289.66 2,807.19 0
N
5290•Consumables-Other 8,500.00 5,292.25 a
L
Total 5290•Consumables 51,222.05 28,035.73 �
L
d
5309• Depreciation-M&E 238,697,67 220,220.37 LL
Total COGS 2,091,102.86 1,872,576.43 m
Gross Profit 617,258.27 437,977.77 X
W
Expense
m
Autorrruck Expense E
AUTO U
r
5301•Repairs 0.00 327.34 Q
5302• DMV FEES 0.00 467.00
Total AUTO 0,00 794.34
Page 1 of 5
Packet Pg. 851
9:35 AM JC Supply& Manufacturing
03/28/14
Accrual Basis Profit & Loss Prev Year Comparison
January through February 2014
Jan-Feb 14 Jan-Feb 13
5308-Gas&fuel
16,350.06 4,745.04
Auto/Truck Expense-Other 1,268.84 887.52
O
Total Auto/Truck Expense 17,618.90 6,426.90 E
.2
Computer Expense 783.22 688.67
Customer Relations 0,00 110.00 U*)
Insurance
N
Employee Practices Liability 882,24 822.58
6560•General Liability 3,302,00 2,48816
6565•Fidelity/ERISA Insurance 119.66 0.00
6570 Auto Insurance 2,023.00 1,851,44
6580 Medical 21,621.52 25,886.62
6590•Property-Ontario,CA 4,171.16 5,326,16
6610-Workers Compensation
7,760.00 7,088,00 E
8007-Property-Rancho Cucamonga,CA 55.70 637.52
Total Insurance 39,935.28 44,100.48 E
Loan Fees 0.00 -249.00
Property Maintenance 0.00 450,00
Cn
Rent-Building 109,400.00 104,000.00 .0
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Rent -Equipment 0.00 222.57
Security System 257.00 263.50
Training&Education 0.00 1,99
5165•Shipping Supplies 44,938.71 38,651.07 V)
E
5304•Research&Develop.-Machines 908,20 8,384.70
5306•Supplies
5307•Shop 19,170.04 10,033.28
Total 5306,Supplies 19,170.04 10,033.28
C14
tts
5800-Utilities
5830•Gas and Electric 59,469.08 54,201.29 -0
0)
5800-Utilities-Other 878,28 0.00 It-
Total 5800. Utilities 60,347.36 54,201,29
5820•Utilties-water&trash X
W
Water Inside 0.00 1,751.28 4.;
C
5820•Utilties-water&trash-Other 2,755.86 3,43434 W
E
Total 5820- Utilties-water&trash 2,755.86 5,185.62
Rf
6160•Dues and Subscriptions 28,430.27 15,694,44
6230•Licenses and Permits 14,101.98 9,633.19
6240•Miscellaneous 0.00 375.24
6250-Postage and Delivery 516.36 272.47
Page 2 of 5
- I
FPacket Pg. 852
9:35 AM JC Supply& Manufacturing
03/28/14
Accrual Basis Profit & Loss Prev Year Comparison
{
January through February 2014
Jan-Feb 14 Jan-Feb 13
6270•Professional Fees
Conferences 1,605.00 0.00
Consultant 17,406.80 16,757.60
Education 2,595.00 84.85 IL
Testing 0.00 13295.00 O
6120°Advertising 745.00 0.00 v
Q
6280 Legal Fees 10,385.00 744.42 u)
6650 Accounting 5,895.50 1,625.00 N
Total 6270•Professional Fees 38,632.30 32,506.87
r
0
N
6340•Charitable Donations 1,505.00 1,700A0 s
6350•Travel Exp p
6351-Car rental 512.69 30.60
6352•Air fare 3,930.35 1,719.20
6353•Lodging N
9 9 6,187.07 1,175.22 E
6350.Travel Exp-Other 1,852.20 5.00 c
Total 6350•Travel Exp 12,482.31 2,930.02 E
Q
6370-Meals Expense 2,945.64 1,367.28
c
6400•Depreciation 11,650.03 8,467.23 N
(will, 6460•Employee Benefit
Employee Meetings 8 Activities 0.00 19.46 N
6460•Employee Benefit-Other 304,28 0.00
N
Total 6460•Employee Benefit 304,28 19.46 M
N
6530•Freight expense-general 2,369.31 3,556.96 E
6550-Gift Expense 0.00 185.03
6670•Janitorial Services 1,775.00 0.00
6790.Office-Supplies 4,432.32 2,858.86 0
N
6810•Payroll Expenses 252,643,64 211,571.22 L
tC
6840•Printing and Reproduction 0.00 5.40 �
L
6930• Property Taxes 2,885.60 7,509.07 SZ
d
6970•Repairs
LL
6310-Building Repairs 79.85 2,001.60 m
+,
6320•Computer Repairs 0.00 0.00
6330•Equipment Repairs X
W
Air Compressor 125 1,942.88 1,275.81
Bar Line 1,165.16 0.00
BW 4,087.03 841.00 t
v
BW2 34.71 0,00 a
BW3 4,041.65 388.86 Q
Custom Coat Line 746,91 1,96158
Dip Tank 162.55 9,464.08 i
Forklift 2,539.35 2,256.49
Page 3 of 5
Packet Pg.853
9:35 AM JC Supply& Manufacturing
03/28114
Accrual Basis Profit & Loss Prev Year Comparison
January through February 2014
Jan-Feb 14 Jan-Feb 13
SAW#1 42.88 0.00
SAW#2 0.00 -4.69
Side Frame Welder#1 912.10 316.61 M
Side Frame Welder#2 0.00 212.63
Wire Drawer 51.81 1,573,09
.2
6330-Equipment Repairs-Other 3,536,05 295.08
Total 6330•Equipment Repairs 19,26108 18,580.54
6970•Repairs-Other 21.30 169.82
Total 6970•Repairs
19,364.23 20,751.96 04
7210-Taxes 0
7215•Washington B&O Tax 3,377.00 1,171.00
Total 7210-"faxes 3,377.00 1,171.00
E
7260-Telephone
O
7261 •Office lines 326.19 20.85 E
7280-Mobil 2,259.57 2,521.68 4
7260•Telephone-other 2,623.35 2,450.64
Total 7260 Telephone 5,209.11 4,993.17
O
Total Expense
698,738.95 598,039.94
cc
CD
CV
Net Ordinary Income -81,480.68 -160,062.17 n
N
Other Income/Expense E
Other Income
8200-Other Income 108,65 235.50 cl
8500•Gain(Loss)on Fixed Asset 0.00 694,427.95 CD
Total Other Income 108.65 694,663.45
to
Other Expense
6140•Contributions 0.00 200.00
8010-Depreciation-Building Rental 0.00 3,509.93
8600 Interest Expense 19.592.92 27,970.80
8700 Other Expenses X
W
$006•Mortgage 0.00 10,455.56
8700•Other Expenses-Other 0.00 163,121.72
E
Total 8700.Other Expenses 0.00 173,577.28'
U
Total Other Expense 19,592.92 205,258.01
Net Other Income -19,484.27 489,405.44
Page 4 of 5
FPacket Pg.854
�n
9:35 AM JC Supply& Manufacturing
03/28/14
Accrual Basis Profit & Loss Prev Year Comparison
January through February 2014
Jan-Feb 14 Jan-Feb 13
Net Income -100,964.95 325,343.27
c
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Page 5of5
's
Packet Pg. 855
6.A.d
4:81 PM JC Supply& Manufacturing
03(24114
Accrual Basis Balance Sheet
As of February 28,2014
Feb 28,14
ASSETS �—
Current Assets
Check ing{Savings
PETTY CASH 1,087.48
1010,JC Supply Union Bank 7,275.65 a
1030- Community Bank 55,290.42 O
O
Total Checking/Savings 63,65155 v
Q
U*)
Accounts Receivable o
N
1100 Accounts Receivable 2,678,742.20 �7
Total Accounts Receivable 2.678,742.20 °
N
d
Other Current Assets p
1070•Undeposited Funds 70,50.92
1200•Inventory-Raw Materials 2,911,225.37
d
1250•inventory-WIP-Powder 30,377.15 E
1255•Inventory-FG-Baskets]Powder 613,640.85
C
d
1275•WIP/FG Labor 59,544.02 E
1300•Prepaid Expenses 49,049.42 Q
R
1320•Prepaid insurance 22,416.18 r
c
1340•Prepaid CA Franchise tax 14,770.00 (o
U)
Total Other Current Assets 3,771,590.91
Total Current Assets 6,513,986.66 W
N
M
Fixed Assets N
1500•Machinery and Equipment 8,541,465.95 E
1520•Leashold Improvements 91,00532 +�
c
1530•Automobiles 352,653.97 d
1540•Vehicles 73,372.71 N
1550-Computer 172,848.92 L
1580•Office furniture&fixtures 64,845,21 ca�
L
1590.Fixed Asset Construction Prog.
u_
Basket Stake Machine 985,543.79 ,
Basket Welder 93tSFW#4 4,062.97 0]
Blaster Rebuild 107,814.78
CCL Electrical Upgrades 1,841.00 X
W
Motor for Wire Drawer 14,726.29
P-Stake Machine 1,730.68
SFW 2-Re-Work 55.600.83
SFW 3-Re-work 84,848.99 Y
SFV11#41SFW#1 Re-work 2,815.91 Q
SFW#5 41,382.99
TBA Table 4,245.38
CATotal 1590•Fixed Asset Construction Prog. 504,61181
Page 1 of 3
17Picket Pg. 856
4.31 PM JC Supply S Manufacturing
03/24114
Accrual Basis Balance Sheet
As of February 28,2014
Feb 28,14
1600 Accumulated Depreciation -4,326,134.44 i
3
Total Fixed Assets 5,474,771.45
3 =
Other Assets i iL
Deposits 0
O
18,00-Security Deposit-Cucamonga 55,000.00 v
Q
1830 Utility Deposit 260.00 LO
Total Deposits 55,260.00 N
r
Total Other Assets 55,260.00 N
a�
TOTAL ASSETS 12,044,018,11 O
r
LIABILITIES$EQUITY
O
Liabilities E
Current Liabilities �
d
Accounts Payable E
2100•Accounts Payable 2,350,729.42 Q
Total Accounts Payable 2,350,729.42
to
Credit Cards
2130•American Express 20,525.53
2131 -AMEX Gold 77,145.27
2132•AMEX Plum 2,$70.92
2180-Southwest Airlines-Bank One 28,010.22 y
Total Credit Cards 128,551.94 E
O
w
C
Other Current Liabilities
Sales Tax Payable o
N
2230•State Board of Equalixtion 634.63
Sales Tax Payable-Other 81,289.94
L
Total Sales Tax Payable 81,924.57 C
O
LL
2000� LOC•Community Bank 1,350,000.00 m
2120-Client Deposits 1,197,853.91
t
2200-Loans Payable Current 696,149.16 X
LU
2210-Accrued Liabilities 1,027,736.60
C
2215-Accrued payroll 21,801.12 d
2235-Section 125- Flex Payable -1,220.49
V
2236-Accrued Workers comp expense -21,027.03 a
Total Other Current Liabilities 4,353,217.84 Q
Total Current Liabilities 6,832,499.20
Page 2 of 3
FPacket Pg.857
4:31 PM JC Supply& Manufacturing
03124114
Accrual Basis Balance Sheet
all A As of February 28,2014
Feb 28,14
Long Term Liabilities
2300•Note Payable- Share holder 420,000=
2331•Note Payable-Auto#1 25,766.09
2333• Note Payable-2011 Ford 25,887.68 Ca
2335,Note payable-Community Bank$23 94,053.60 0
2336 Note payable-Community Bank 524 46,804.09 0
2337 Note payable-Community Bank 518 54,703.70
2:338-Note Payable-Community Bank 542 559,043.29 CD
2339,Note payable-Community Bank 541 199,416.70
2:341,Note Payable Community Bank-590 814,933,97
21320•Long Term-Client Deposits 615,243.00
21500-Current Loans Payable -696,149.16 0
Total Long Term Liabilities 2,159,702.96
Total Liabilities 8,992,202,16 E
Equity
E
3000-Capital Stock 1,000.00 <
3200-Paid In Capital 1,069,632,71
3300•Retained Earnings 2,106,319.26
3400-Shareholder distributions -24,160.74 M
Not Income -100,975,28
Total Equity 3,051,815.95 (D
a)
C14
TOTAL LIABILITIES&EQUITY 12,044,018.11
E
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C14
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Page 3 of 3
Packet Pg. 858
4:31 PM JC Supply& Manufacturing
03124114
Accrual Basis Balance Sheet
As of February 28,2014
Feb 28,14
ASSETS
Current Assets
Checking/Savings
PETTY CASH 1,087.48
1010-JC Supply Union Bank 7,275,65
1030�Community Bank 55,290.42
.0
Total Checking/Savings 63,653.55
LO
Accounts Receivable CD
N
1100-Accounts Receivable 2,678,742,20
Total Accounts Receivable 2,678,74120
C14
Other Current Assets
0
1070•Undeposited Funds 70,565.92
1200-Inventory-Raw Materials 2,911,22537
1250-Inventory-WIP-Powder 30,377.15 a)
E
1255-Inventory-FG-Baskets/Powder 613,640.85
1275•WIPIFG Labor 59,544.02
1300-Prepaid Expenses 49,049.42
1320-Prepaid Insurance 22,418.18
1340-Prepaid CA Franchise tax 14,770.00
Total Other Current Assets 3,771,590.91
Total Current Assets 6,513,986.66
C14
Fixed Assets
1500•Machinery and Equipment 8,541,465.95 E
1520•Leashold improvements 91,005.32
1530•Automobiles 352,653.97
1540-Vehicles 73,372.71
1550-Computer 172,848,92 N>
1580-Office furniture&fixtures 64,945,21
1590-Fixed Asset Construction Prog.
Basket Stake Machine 185,54179 LL
Basket Welder#WSFW#4 4,062,97
Blaster Rebuild 107,81418
!E
CCIL Electrical Upgrades 1,841,00 X
Motor for Wire Drawer 14,726.29 U.1
P-Stake Machine 1,730.88
SFIN 2-Re-Work E
55,600.83
SFW 3-Re-work 84,848.99 U CU
SRfV#4/SFW#1 Re-work 2,815,91
SFW#5 41,382.99
TBA Table 4,245.38
Total 1590•Fixed Asset Construction Prog. 504,613.81
C
Page I of 3
Packet Pg. 859
4:31 PM JC Supply & Manufacturing
03/24/14
Accrual Basis Balance Sheet
As of February 28,2014
Feb 28,14
1600-Accumulated Depreciation -4,326,134.44
Total Fixed Assets 5,474,771.45
t0
Other Assets d
c
Deposits o
1800 Security Deposit-Cucamonga 55,000.00 v
Q
1830 Utility Deposit 260.00 U1
Total Deposits 55,260.00 N
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Total Other Assets 55,260.00 N
N
TOTAL ASSETS 12,044,018.11 0
T"
LL481LITIES&EQUITY
Liabilities
E
Current Liabilities �
d
Accounts Payable E
2100•Accounts Payable 2,350,729.42 Q
Total Accounts Payable 2,350,729.42
tc
Credit Cards
2130.American Express 20,525.53 rn
2131•AMEX Gold 77,145.27
2132-AMEX Plum 2,870.92 chi
2180-Southwest Airlines-Bank One 28,010.22 rn
Total Credit Cards 128,551.94 L
O
c
Other Current Liabilities
Sales Tax Payable o
N
2230•State Board of Equaliztion 634.63
Sales Tax Payable-Other 81,289,94
i
Total Sales Tax Payable 81,924.57 a
N
LL
2000•LOC-Community Bank 1,350,000.00 m
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2120•Client Deposits 1,197.85191
2200•Loans Payable Current 696,149.16 LL
2210 Accrued Liabilities 1,027,736.60
2215 Accrued payroll 21,801.12 d
2235 Section 125- Flex Payable -1,220.49 s
v
2236•Accrued Workers comp expense -21,027.03
Total Other Current Liabilities 4,353,217.84 Q
f
Total Current Liabilities 6,832,499.20
Page 2 of 3
ICI
Packet Pg.860
MEN
4:31 PIVI JC Supply& Manufacturing
03124114
Accrual Basis Balance Sheet
As of February 28,2014
Feb 28,14
Long Term Liabilities
2300•Note Payable- Share holder 420,000.00
2331-Note Payable-Auto#1 25,766.09
2333•Note Payable-2011 Ford 25,887,68 0.
2335•Note payable-Community Bank 523 94,05160 0
2336 Note payable-Community Bank 524 46,804.09
2337•Note payable-Community Bank 518 54,70330 Ul)
2338 Note Payable-Community Bank 542 559,043.29
-Community Bank 541 199,416.70
2339 Note payable C?
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2341•Note Payable Community Bank-590 814,933.97 C1
04
2520•Long Term-Client Deposits 615,243.00 4)
2600•Current Loans Payable -696,149.16 0
Total Long Term Liabilities 2,159,702.96
Total Liabilities 8,992,202.16
E
Equity a)
E
3000-Capital Stock 1,000.00
3200,Paid In Capital 1,069,632.71
3300-Retained Earnings 2,106,319.26
to
3400•Shareholder distributions -24,160,74
Not Income -100,975.28
Total Equity 3,051,815.95
CY)
C14
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TOTAL LIABILITIES&EQUITY 12,044,018.11 U)
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Page 3 of 3
1 Packet Pg. 861
6.A.e
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,aerrX L)ght�cap and;`Cotinle L�gh>ctap , r
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'Trade iVame(tieent r�K } 5� ,,� '�t, `� SBC i co-borrower No < ,�_ k. r
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Project Address:4010 Georgia Blvd ° i
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City:San Bernardino CountySan Bernardino State: CA Zip:92407
Purpose of Loan and Description of Project:
.
.................................................................................................................................................................................................................................................................................................................................................................
Applicant is from Faith Based Small Business Summit award winner,in partnership with Wells Fargo Bank requesting r
20-year$1,312,500 CDC debenture to augment Bank's 15-year$1,687,500 term facility(with 15-year amortization)to
support real estate acquisition of a 106,000 square foot office building, parcel 0266-363-56-0000 in San Bernardino,
California.The applicant Lightcap Industries dba:JC Supply&Manufacturing operates manufacturing company in
Ontario, California. They will be moving from this location to the newly purchased buildiing. Buyer and seller have o
come to agreement,via purchase agreement dated February 2014,to purchase the property for$3,700,000. It should
be noted that in the purchase agreement,the seller include equipment in the purchase agreement,along with TI's. The e
seller was leaving the equipment and noted that they had no use of the equipment. They listed it in the purchase
agreement to document that they are leaving it,but there is no cost for the equipment. The CDC obtained an email
from the seller,which is provided in the file, noting that the equipment is provided free of charge to the buyer. c
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The applicants,Jerry and Connie Lightcap,will be injecting 19%into the project from personal funds as part of a 1031
exchange. Borrower will occupy 100%of the subject property moving forward.Title to the property will be in the name to
Lightcap Industries.The manufacturing building is at 4010 Georgia Blvd(known as 2239 Gannet Parkway until 2008
when the city renamed the street).The two-story structure, on 7.14 acres,has office space; 7 dock high doors;7 load °
levelers; 4 ground level doors; 9,000 amps,2771480 volts,3 phase power with concrete tilt-up construction.The M
property is.26 miles northwest of Interstate 215 and University Parkway in northern San Bernardino.The site in within --
a light industrial and residential area, bordered by Georgia Boulevard to the east and the railroad tracks to the west.
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The borrowers are also seeking to refinance their equipment with Wells Fargo and some credit facilities that they have
with Community Bank. The borrower is exploring opening a new location in the mid-west because of an increase in N
sales in the area,due to the work of two sales people they brought on board two years ago. They are seeking to
explore putting together the infrastructure through their financing with a new lender to faciliate their expansion.The
financing proposed is completely separate from this transaction and is still being negotiated.The new financing N
documentation has been provided only for the purpose of analyzing the viability of the company to cover their debt m
following both transactions,and since the bank submitted the proposal as an entire package, w
T
Project transaction is associated with a business acquisition? No
If yes, provide details concerning the entire acquisition, including non-project financing sources&terms:
_...........
...................................................................................................................................................................................................................................................................................................................................................
NOT APPLICABLE °
d�
If any project assets are already owned by the borrower, provide purchase amount&date: N
NOT APPLICABLE
E
Disclose terms of any pre-project financing(including lender, amount financed,and maturity)and specify whether 0
that financing will tie taken out with the funds for this project or re-financed by the third party lender: —
...................................................................................................................................................
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Credit Memo Project v3.0 1
Lightcap Industries,Inc. Application Dat
Packet Pg. 862
6.A.e
Costs
«' Description Amount
Purchase Land 0.00 0.00%
, , d: 3 704x04 170 100 0
Purchase Land and Improvements; F
Purchase Improvements 0.00 0.90% c
' OsQO"r 4 00°fo
v Construct a Building,_�a ,a � ';,'., s `, `� c'* . a _. v e r t; .,. ..;x'. V
Add an Addition to a Building
.0 t� `�,.' J•;r Bu ils d ing:, 0,.^00 0,0 0000%
P,Y t
M O OMake R endVat,ar t0t A{BI � hflC
ow =
Make Leased Improvements
0 00%
rS' ^'Ner r 7 c +3s7+§„�+'rY,�t 4�.ea+{ rn ,..
Purcla se/lnstl i=quiknei .,,r ; r f�� �. a .. , . ,). _ 0 00 .b.�.as°%� o
a. y . ,:
Purchase/Install Fixtures 0 00 0.00% m
ws, _ Pa Outstaiidin Qetit � ;': 0 00 x4'-� 0.00% I
Other Expenses(construction contingencies, interim interest) 0.00 0.00%
C' OAO 0.00% 3
Professional Fees _
TOTAL Project Costs 3,700,000.00 100.00% m
E
'a
Financing
Debenture Pricing Q
A. SBA Share of Project Costs: 35.47% $ 1,312,500'00
B Administrative Costs Sa i
1. SBA Guaranty 176'a( *ee0005, , * K a
✓':,i,ev x,...v ,�e"s"is:zi ;` .. „ '.w„
2. Funding Fees(A* 0025) 3,281 25 C
Cx i`'''`�t eyy t a a 't• �z�{c�.�,,ft€fit ..
3. CDC Processing Fee�( 0 bas 1$.687'50 i � cQ
r .tax .3 ._.xzxrr,<.,, k same.;. ., acv1:.. ,.�,.t aTZU4,747; ,r;' h;�,��� G�
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4. Closing Costs 5,000.00 M
5. Total (B1 through B4�
6. Underwriters Fee* 5,412 00 =
o
7. Total (B5+ 136) 39 943 25 N
C Total Debenture Amount(A+ B7 rounded up to next thousand) 1,353,000 00
7x xp 7;,
.;� D:.Balance,o Borrower?
CV
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*Underwriters fee calculated as follows: For 20 year Debentures,the sum of A.and B.5 divided by 0.99600; round this number up the next... 0
thousand;multiply this number by 0.00400. For 10 year Debentures,the sum of A. and 13.5 divided by 0.99625; round this number up to... i
highest thousand;multiply this number by 0.00375. c
co
Explanation why the financing is not otherwise available without SBA support:
The bank would not offer financing to borrower without SBA assistance as the loan request exceeds the lender's c
conventional advance rate for this type of property. NI
Source Amount % Monthly P&I Term Amort Rate Lien o
v
Wells Fargo Bank: 1,687,500 45.61 14,085 15.00 15:00
121 S.Market Street,7th Floor/San Jose', f°
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Santa Ana District Office 1,312,500 35.47 9,071 20.00 20.00 5.190 2
200 West Santa Ana Boulevard,Suite 700/Santa
Ana
Personal cash 700,000 18.92
ct �
TOTAL Financing E
3,700,000 100.00 23,157 Annual P&I 277,888
Name of Interim Lender:Wells Fargo Bank
m
Source of Borrower Contribution (if equity in project property, provide details on existing financing and valuation basis).
........ ........ .........
Ownership demonstrates commitment to this project,as she will contribute$750,000(20%)into the project as the cash
down payment required prior to escrow closing. The borrower is doing a 1031 exchange with this project and is j
t
choosing a higher down payment because of the 1031 exchange. The applicant's down payment will come from
- business and personal funds.$100,000 of the deposit has already been paid to escrow = f
d
g Property is special purpose and requires additional 5% borrower contribution? No U
If operating less than two years, additional 5% borrower contribution necessary? N/A (If no, explain:) Y
Q
Credit Memo Project v3.0 2
Lightcap Industries,Inc. Application Dat
Packet Pg.863
..............................................................................................................................................................................................................................................................................................................................................
6.A.e
NOT APPLICABLE
Please note: If property is special purpose and/or the business has been operating for less than two years,the third party lender must provide
at least 50%of the total project financing.
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Credit Memo Project v3.0 3
Lightcap Industries,Inc. Application Dat
Packet Pg. 864
6.A.e
Entity Information
Structure _
Entlty is aCiKEPC;e z t .........
dame`J ' Li` htCe`end onnl a.
g p w � 9 a 3 fi } tvft .,fk
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Malltn//�•,��d(�Tess, 32 Br �tion Circle,C �no Hills, 1709 0 0
�, i7�:, .T., .. :.r.... ' ..r,,.r.., a xo.r ..., �r,. r•:.... r, r�, .. ',`.{.'.,t�•2 ..i: �Y
'q- 2 f* t r 'S u3 x r xt 4 p 7 i :: ti C N�
Trade Name.( dlftelre t gg "�i �< a �r� ,i 1} �t"Year O�r+�eratlons Bp�7a y>0
.,§r•gc r �Prl' �4 r Tc5 ti �3' ' *"r"4w q ti3F 3 t+ 'W''i+Y`t� t( r '� 4 ..:b i *9;.� �t a• rY s•7;1:t : ey,
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`Type'of entltlnllt(dual r t x r �nfi{F l' CQ-borrower? Na ' �uai. ntor? o
.;; r A°�i '+++. if ar*r,.Lx:} itfi•`.'f,�t,4 i.x f it St > ',`•T��. d5 x `S j, �E?a4rs�.A"f `Y if'
is..k ��� n � c Ey � a r, ��w �,.t ti ��nYF.'C.-ts ai�'�,fi z-n R ,,L s� r•� '£kn�, t � '^e .
t} x ? NAILS ,
3� _.. ;..3i�'tF�'��'ih N o' a{>,t{;1i%.�Srr�S1rA �`��7}a h "55<t#t'. �• i a V i t+ `a ». d�'+}�y°w4�^� e''.x'S ��? 'G.�$�Qn � `K?=%� �:' CV
Narrie of Fraric�ise,��,,, � ,�; �se� ,�� ,�•,�. � ��, �� p" �' _ �a,�.��%' �t�r�� ,Franchlse'on Re ist NIA �
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Ownership (account for 100%ownership by the ultimate individual persons) N
a�
I— Citizenship—, I Codes Y I
Name %Own Guar? SSN US Citizen LPR Other Gender Race Ethnicity Vet }
Veteran Status: 7=Non-Veteran;2=Other Vet.;3=Service-Disabled Vet.;4=Not Disclosed. i
Gender: M=Male;F=Female;N=Not Disclosed +
Race: 1=American Indian/Alaska Native;2=Asian;3=Black/African-American;4=Native Hawaiian/Pacific Islander;5=White/Caucasian;X=Not Disclosed
Ethnicity: H=Hispanic/Latino;N=Not Hispanic/Latino;Y=Not Disclosed E
Management
Provide the following information for each officer and director (regardless of ownership) Q
Name SSN Title Life Insurance
Y
Analysis of management ability(describe the qualifications and background of the relevant owners, officers, directors,
and key employees involved in the operations and day-to-day management of the business):
.o
N
History (o
0
History&Description of the business: N
..................................................................................................................................................................................................................................................................................................................................................................
not applicable-individuals
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Credit Memo Project v3.0 4
Lightcap Industries, Inc. Application Dat
Packet Pg.865
6.A.e
"Entity..irifOriWdtjOh,
Structure c
y
En1ftXYiS aTl 'f�lrerating Company `a5l S °loft , �rii,rJot ,, i�l'` o o.
a m6 L91itca Itttlusfrtes,Irl Ft 'ti ` +t1.rt{�:v:r 1rfvAx 3 A A rg/i >> Qis� t �u k'r�xyr i G
Q
no Addrtr's<, X612 ShCuc�monga Aven e,On a 1o,CA 91761 " ,: t,h`` 5° r.;;Tax l7t�s3 2845?, �3 c
Tf'ade�t4b> 6(If diffelrept) C Suppi�r 8 Mar gfacturina �5 k " f 34 r hYe�r iag4 r�f�on e9�r `99 {� �, }< 'Q
1 /t ✓. s'� �'t obf
YPe f e tt y+,f ��rpot tiQn ti �' YS U'� '; ; Entdy;iS CO fJprr 7N2r}? Na' 't�Ll&r�ntbr� 8s� rL E
re, y .rr:t� �r �`��4v�T sr`3�,�`-iddn�'4 ��,�� rs, � �32.�12, t`; C tV
Nat'Or�of Business ;F`ab�'ricaled t�uctura(Ilfefal Manufaatiarin {a t k f� k 4 ,TI CS , ,?: -
�g�
Na e 0 F �, Kt rfW? t �t1;; h� { �r3 ?tf of ,� F F�C1C�IS8 `RBglsfrj� tVlt+l4
ms,ud�iCl, `rt I�ISe•1r:;ySr,u�N;;h s.7,`.t S.::.. 1•r{n.r.,��?� :,?'Sr .: .: .7 .}t:tr rN..,, .bf.,. a. a+t-. r i_ ? ,t If' N
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Ownership (account for 100%ownership by the ultimate individual persons) �.
r-- Citizenship--f F— Codes----I p
Name %Own Gnarl SSN US Citizen LPR Other Gender Race Ethnicity Vet C r
Connie M. Lightcap 100.000 x F 5 N 1 s
Veteran Status: 1=Non-Veteran;2=Other Vet.;3=Service-Disabled Vet;4-Not Disclosed. _
Gender. h4=Male;F=Female;N-Not Disclosed E
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Race: 1=American Indlan/Alaska Nativa:2=Asian;3=elacktArrIcamAmedcan;4=Native HawaiianlPaclRc Islander;6=WhitelCaucalan;X=Nat olsclosed O
Ethnicity: 1-1=1111spanicll.atino;N=Not Hlapanickallno;Y=Not Disclosed =
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Management z Q
Provide the following information for each officer and director (regardless of ownership) a
Name SSN Title Life Insurance E
..... .: 'Ai zd m' �' } -. wL .v:9 t' h _ i _. S;-,�.� a i'S-fY' *�Y' ! ,
Gonnle M Llghfc ap.„ � z r j4,�, 1 �4,'y�i presidbntr�CEO 4 .r�}�� .�. .NZ.r t �sr N.A .��, a (n
Analysis of management ability(describe the qualifications and background of the relevant owners, officers, directors, M
and key employees involved in the operations and day-to-day management of the business): O
........... ....... ........ .............� ......................................... D'•
Connie Lightcap has been managing the company since its inception in 1998. She has built the business and its .t
reputation on building infrastructure for America that lasts. She has been recognized by SBA as Business Woman of ti M
the Year. Jerry Lightcap Is not Involved In the ownership of the business,but will be an owner in the EPC for the real
estate. a
c
Over the last few years,Lightcap experienced a growth spurt In the mid-west. As such,Lightcap hired two new sales o
people to grow the business In the mid-west and the results have been promising. Llghtcap has projected Increasing 11
sales In the midl west that they are seeking to capture and are exploring opening a mid-west operation. In order to do a ai
so, in addition to this transaction,they are seeking to refinance some existing debt and explore new equipment lines to a ov
fully consider a mid-west location in Illinois. N
T
History c
History&Description of the business: rni
..............................................................................................................................................................................................................................._..............................................................,......................-........-...._............
CS
JC Supply was established May 7, 1998.Initially their primary business platforms were distribution of paving coco
materials; rebar splicing and building products for the precast segment of the concrete construction markets.They I v
prospered in the lransportatlon sector due to business enterprise programs specifically DBEISBE/UDSEMBE coupled c
with the mandate of products of domestic origin contract requirement for Infrastructure projects, R NI
In 2006 they recolved a major contract to supply load transfer dowels and assemblies for the LAX Airbus Taxlway.JC E E
proposed its participation in the manufacturing process in a joint venture and in agreement with their supplier a major t p
manufacturer.When the supplier was unable to perform JC began to build equipment and secure raw materials and
was able to complete the project on time and on budget.The became a competitor to their supplier In the airport
segment of the concrete paving market.They determined that their future depended on being self-sufficient in all
segments of manufacturing-requiring major financial Investment and a major move to a faciilty able to support the a CD
manufacturing growth. 0
Today on 9.3 acres with 130,000 square feet of manufacturing under roof,their commitment to excellence drives n -0
everyone at JC Supply and Manufacturing to deliver.The manufacturing process Is designed for ultimate quality and
flexibility.The company is driven by their dream vision for the consideration of a new limited business enterprise"BY.., = a
THE PEOPLE AND FOR THE PEOPLE"as they literally participate In the building of the very foundation of the couq#i Z-1, S
Their founder,Connie Lightcap speaks to the DREAM: "Heading Providence,inspired by a DREAM,and rooted In old y
time Amerlcan'Values this new business enterprise draws on Incilvidualism,exceptionallsm, and sacrific.@�ktforsaking u pp
unjust enrichment, has led to a restoration of hope and a rekindling of the American Dream.JC Supply& w .r
Manufacturing birthed by opportunity,tempered In adversity, sustained by passion and committed to Ingenuity for the 4 x
X
good.With its essence of, Respect,Integrity,Synergy,and Enthusiasm,we will RISE,optimizing the benefits
of capitalism,balanced by the scales of social justice,which has led to a restoration of trust. It w
JC Supply has experienced miraculous growth and prosperity In spite of a shattered economy. I
JC Supply&Manufacturing currently pays approximately$50,000 per month In rent.This amount has been added back a as
as the princlpal and Interest payments of$23,450 per month will replace this rent payment. E
The business manufactures load transfer materials-such as dowelsibaskets used in concrete paving.Additionally s
Credit Memo Project v3.0 5 Q
Lightcap Industries,Inc. Application Dat },, .
Packet Pg.866 '
Entity Information
they do miscellaneous structural metal work.They serve the western United States.Their biggest competitor is @
Y American Highway Technology of southern California. Key customers include Accurate Technology,Jetline Q
Engineering, and Birchwood Technology.Competitors include Santa Ana companies: Carich Enterprises and A&A c
Tool and Die. o
The borrowers are also refinancing their equipment with Wells Fargo. However this financing is completely separate Q
from this transaction.The new financing documentation has been provided only for the purpose of analyzing the m
viability of the company to cover their debt following both transactions. c
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Credit Memo Project v3.0 6
Lightcap Industries, Inc. Application Dat Packet Pg.867
6.A.e
Guarantors/Obligors
Type Name Type of Guarantee
Business Lightcap Industries,Inc. Unsecured Full =
Personal Credit
a
*Note:amounts will display in thousands 0
Individual PFS Date Liquid Asset Total Asset Outside NW Date History Q !
Real Estate Total Liability AGI Source Score
Connie M LightcapM 02!20/2014 210.0 1,005.0 . 502.4 02120/2013 Excellent N
700 0, , �- 502.6 275.0 Blended 794 j
Jerry Lightcap 0.0 0.0 0.0 03112/2014 Excellent N
0.0 0.0 0.0 Blended 740 r I
.Comments_on._Personal Credit o
.. .... ...........................................................................................................................................................................................................................................................................I....................... Y
The average FICCI score for the three reporting agencies for Connie Lightcap is 794, as of February 20,2014.A credit
line secured by Real estate on her personal residences is$420,000,with monthly payments of$860. Her installment =
debt balance is$27,387(an auto loan)and credit card debt is$97 with monthly payments totaling$865. Additionally d
there is an uncatagorized payable to American Express for$12,446.She has no public records, liens, or late payments E
on her credit °
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The average FICCI score for the three reporting agencies for Jerry Lightcap is 740, as of March 12,2014.A credit line
secured by Real estate on their personal residences is$420,000,with monthly payments of$804. Installment debt E
d ,
balance is$24,907(an auto loan)and credit card debt is$46,635 with monthly payments totaling$2,088(858 auto).
This auto debt is paid by JC Supply and is on their debt schedule.Therefore it has not been included on the financial
statement.He has no public records,liens,or late payments on his credit.
a..
Business Credit
*Note:amounts will display in thousands to
r Prior Years co
Entity FS Date Total Asset Revenue Date History M
Net Worth Total Liability Net Income Source
Lightcap Industries,Inc. 11/30/2013 12,789.4 21,695.7 ,02/20/2013 Good
5;261.6
7527.8 o
Comments on Business Credit >
... .. .............................................................................................................................................................................................................................................................................................................
The Advantage .
Commercial Credit Report dated February 20,2014 for JC Supply Inc. indicates a credit logic score of 0
54 -medium risk..The company is 95.8%current on accounts.The report found no derogatory legal filings, N
bankruptcies,or judgments. The report shows a company tax lien that was an error, had been paid in full,and was
oo
corrected within a month of discovering it.There is a collection account of$3,546 that is being disputed by the C
00
company. r
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Job Opportunity Requirement Jobs 0
25.00 Number of jobs to be created in Debenture amount/ (rounded up to the next whole) o
the next two years NI
0.00 Number of jobs to be retained 14 For manufacturer, Debenture amount/100,000(rounded up) 0
because of project
25.00 Total number of job opportunities x Project meets job requirement criteria 0
Justification..for includ.ng..retained.'obs.in total:
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Credit Memo Project v3.0 7
Lightcap Industries, Inc. Application Date
Packet Pg. 868.:
Economic Development Objectives met, if any Objectives
CDC's overall portfolio job ratio as of the prior Annual Report: 60,513 c
® B1 -Community or Area Development n.
® Public Policy Goals(check one or more below) o
❑ C1 -Business District Revitalization ❑ E1 ->10% reduction in energy consumption Q I
❑ C2-Expansion of Minority Business Development ❑ E2-Use of Sustainable design "' I
❑ C3-Enhanced Economic Competition ❑ E3-Upgrade of Renewable energy/fuel production o {
❑ C4-Expansion of Exports C
❑ C5-Restructuring Because of Federally Mandated Standards or Policies
❑ C6-Changes Necessitated by Federal Budget Cutbacks N I
❑ C7-Rural Development
❑ C8-Veteran.-owned Business o
® C9-Women.-owned Business
® C10-Reduces Unemployment in Labor Surplus areas
Narrative comment describing how the objective is met:
............. ........................................................... ................................................................................................................................................................................................................................................................
The loan will enhance community and area development, provide financing for a manufacturing enterprise, and support =
a women-owned (business in a labor surplus area. 0
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Prior Government Financing Q
Previous or existing government financing of principals and/or affiliates and/or applicant? Yes
Previous or existing SBA financing of principals and/or affiliates and/or applicant? Yes Y
(If YES to either cluestion, complete the followina)
Type 1.Borrower Name Federal Source! Loan Type Tax ID
(P)rincipalor(Aff)iliateor(App)licantor(0)ther Current Balancel Guaranty Balance Status I Loan Number N
M
:App I Lightcap Industries,Inc. Southland Economic D SBA ,
Aloft, _ Paid 17283334001 t'
Comments: o
..................................................................................................................................................................................................................................................................................................................................I.............................. •—
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This loan in the amount of$606,278.98 was paid in full August 1,2012. >
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Affi I iates
N
Potential Affiliates-Applies to all borrowers,OCs, & EPC.
Account for all businesses(excluding publicly traded)in which any 20%owner or guarantor holds an ownership interest. o
Account for all businesses for which any owner,officer,director,key employee,or management entity has the power to exercise control- 0
whether individually or through a combined identity of interest(such as family members,individuals or firms with common investments,or of
firms that are economically dependent through contractual or other relationships). p
Account for all other potentially affiliated businesses consistent with CFR 121.103
0
Affiliate? Company Name Nature of Business TIN Individual % Title o
NOT APPLICABLE:
NI
Comments E
..... ...............................................................................
504 Size Standard (after Federal taxes)for
**Note:amounts will display in thousands** preceding two fiscal years
V
Type Name Tangible Net Worth Average Net Income U
SBC Lightcap Industries,Inc. 3,051.8 158.1
Totals 3,051.8 158.1 E
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Comments:
...................................................................................................................................................................................
The average net income of the borrower is less than$5M and the net worth is less than$15M.The operating company,
JC Supply, Inc,fabricated structural metal manufacturing, NAICS 332312 is eligible for SBA financing. ;_
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Credit Memo Project v3.0 g
Lightcap Industries, Inc. Application Dat packet Pg. 869
ti.A.e
Collateral
Projects involving real estate OC Construction of
Approximate Size of: Occupancy New Renovation Special
I Type of property: Building Lot Unit % Building /Remodel Purpose a-
manufacturing/office 106,000 311,018 1, o _
C
Comments(for multiple properties, list all project address :
.................................... ..
............... ......... ......... ......... ......... ........ Q
The 106,000 square foot manufacturing building at 4010 Georgia Blvd was known as 2239 Gannet Parkway until 2008 ,n
when the city renamed the street.The lot is 7.14 acres.The two-story structure has office space;7 dock high doors; 7 r
load levelers; 4 ground level doors; 9,000 amps, 277/480 volts,3 phase power with concrete tilt-up construction. It is N
zoned light industrial. 4
o
Proiects involving equipment/other personal property N
Type of property: Purchased From Items Are r 1
NOT APPLICABLE! o
Comments(discuss remaining useful life, installation costs, etc. as appropriate):
..................................................................................................................................................................................................................................................................................................................
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Estimated Liquidation Prior Lien Prior Lien Net
Collateral OffE red Value Value Position Amount Value
Industrial 3,700,000 3,700,000 1 1,406,250 2,293,750 E
Q
Totals 3,700,000 3,700,000 1,406,250 2,293,750
New Loan 1,312,500
LTV 0.73 Project Debt: 3,040,500 M
LLTV 0.57
Life Insurance is NOT required.
Analysis of collateral adequacy: M
...................................................................................................................................................................................................................................................................................................................................................................
Overall, collateral coverage ratio,which includes and assumes 100 percent value in the real estate is 1.2x,which is
sufficient to support proposed request and to protect the government's interest.
O
Wrap-Up
Other Issues (Such as pre-application 912 clearances, franchise reviews, environmental reviews, etc):
..................................................................................................................................................................................................................................................................................................................................................................
none c�
Key Risks: o
.............................................................................-.............................................................................................
• Rapid growth has necessitated the layering on of additional debt to meet the needs.This is mitigated by the �I
company's excellent history of success. rn
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Key Strengths:
.................................................................................................................................................................................................................................................................................................................................................. r
• Growing demand for the products. o
• Established business owner with 14 years in the field;moderate risk business segment �I
• Sustainable growth in an adverse business environment o
• Sufficient cash flow in all periods analyzed
• Experienced Management
E
Decision Conclusion: BU
..............._......................................................................................................................................................................................
Approval of the$1,312,500 SBA debenture is recommended as presented.
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Credit Memo Project:v3.0 9
Lightcap Industries, Inc. Application Date packet Pg.870`
Balance Sheet - Small Business Concern
Name: Lightcap Industries, Inc.
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Type of Statement Tax Return Review In House "Note:amounts will display in thousands c
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Date of Statement: 12/31/2012 12/3112013 02/28/2014 Adj. Debit Adj. Credit Adj Bal Sheet 0
Cash/Mark.Sec 3271 _
3775 � 63.T ':700.0 700.0 63.7 LO I
Accounts Rec 2,151.2 2,193.3 2,678.7 2,678.7 0
N i
nventory 4 541:$ 3 084$, 3,555.2 3,555.2
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Other Current Assets 155.5 89.6 216.4 J 216.4 0
Total Current Assets 7;175.7, 5,745.3 6;514.Q 6,514.0 ` y
:
0
Net Fixed Assets 7,564.3. 5 477 5 5,474:8. 3,74p.5 9,215.3
FIntan ibles 0.0 _._. 0.0 0.0 0.0
Other Assets , 61.8. 61.3 5552 55.2
Total Assets 14,801.8 111284.1 12,044.0 15,784.5 E
Accounts Viable 967.4 1,780.4 2,350.7: 21350.7 is
_ _
Notes Payable 2,213.9 1,560.5 2,046.1 2,046.1 Q
Taxes/Accruals 88.2, 14.4 814
Private Lender(„urr) 0.0 0.0 0.0 70.6 70.6 Y
0.0. 0:0' 0.0 38.6 38.6, rn
SBA(Curry .. ?
__._. _ _ . _ ._,..__._.....__.j
Other Current Liab. 3,769.7 2,490.6 2,353.8 2,353.8
Total Current Liabilities 7,039.2; 5,845:9 6,832,5 6,941,7
_ o
Note_s. Pa able 3,1$9:3 ,8412 1,739.7 1,739.7' M
Private Lender(LT) 0.0 0.0 0.0 1,616.9 1,616.9
SBA LT 0.0' 04 0.0, 1,314.4. ..::. 1,314.4 O
Stockholder Debt 420.0 420.0 420.0 420.0 .r
Other L-T Liabilities 0.0 0.G o.a 0.0 : >
rTOtal Liabilities 10,618.5 8,107.1 8,992.2 12,032.7
Net Worth 4,1833: 3,1770 3,051.8; 7000 3,751.8 ^;,
14,801.8 11,284.1 _ 12,044.0 78 .5 Total Lab. +NW , 4 r
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Balance Sheet Ratios I Historical 1 Industry Comparison
12/31/2012 12/31/2013 02/28/2014 High Med Low Adj Bal Sheet IV, o
Current Ratio 1.0 1.0 1:0 3.5 1.9 1.4 0.9 . : N
l _
Debt/Worth 2.5 2.6 2.9 0.4 1.0 2.6 3.2 EI
Quick Ratio 0.4 0.4 0.4 2,6 .• 1.3 0.8 0.4 0
Days Receivable 36.2 36.5 60.2 45 59 72 'cp
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Days Payable 19.9 34.6 68.4 16 28,r 47 w
1
LD_ays Inventory 93.4 59.9 103.4 17 38 66
v ,
Net Working Capital 136.5 -100.6 -318.5 3,037.1 ` 4271 'a
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Accounting Basis: Cash Accrual E
Balance Sheet Analysis/Comments: M I
.............................................................................................................................................................................................................................................................................................................................................................. In I
The reviewed balance shoot on December 31,2013 shows total assets of$11,284.1M.These consist of cash$377.5M,accounts i
receivable$2,193.3hi,inventory$3,084.9,prepaid expenses of$89.6M,net furniture and fixtures$5,477.5M,and deposits of$61.3M. i
The fixed assets include a rental property in Rancho Cucamonga and the machinery,equipment,furniture and fixtures,and other
items used in the business.The rental property generates approximately$360M annually in gross rental income. X
The total liabilities at December 31,2013-$8,107.1 M include accounts payable$1,780.4M,current portion of notes payable of W
$1,560.5M(including the credit line of$850M),taxes payable$14AM,client deposits,not yet earned,other accrued liabilities of t:
$2,490.6M,shareholder debt of$420M,and long-term notes payable of$1,841.2M. Both Assets and Liabilities decreased from 2012
to 2013 as they sold assets and retired debt in anticipation of moving to the new location.
The rapid growth of the business over the past several years has necessitated the purchase of additional equipment.Community s
Bank has facilitated these purchases with loans secured by the equipment purchased. v
At December 31,2013 the current ratio for the company was 1.0 to 1 and debt to worth was 2.6 to 1.Despite the rapid growth the Q
Credit Memo Project:v3.0 10
Lightcap Industries, Inc. Application Date packet Pg. 871
Balance Sheet Analysis/Comments:
company has maintained ratios at 1 to 1,as they strive to match current assets with current liabilities.Historically annual current
ratios from 2009 to 2012 were 1.1 to 1,1.0 to 1,1.1 to 1,and 1.0 to 1.Net working capital has fluctuated with the growth,but has
remained positive--$206M in 2009,$32M in 2010, $487M in 2011,and$136.5M in 2012 demonstrating the company's management
ability to work towards controlling debt and maintaining adequate current assets to cover current debts. The debt to net worth M
ratios compare favorable with industry averages being:1.8 to 1 in 2009,2.4 to 1 in 2010,2.2 to 1 in 2011,and 2.5 to 1 in 2012. CL
Industry current ratios are high 3.5,med 1.9,and low 1.4.Industry net/worth ratios are high.4,med 1.0,and low 2.6.Industry net C
working capital is$3,037.1M. Y O
The current ratio following the transaction will be.9 to 1.The debt to net worth ratio on the adjusted balance sheet following the U
a i
transaction is 3.2 to 1.Net working capital will be-$427.7MM. �
r
With the rapid growth the company will also be re-structuring their current debt,including an$850M credit line that is due in
August 2014.All of the current debt and the credit line will be replaced with 1)a new credit line that begins at$31VI N M;2)an d
equipment facility at$2.21VIM.Additionally the bank has made available an additional$1.51VIM when the company needs new T" I
equipment.Since the initial borrowing will be for$5.2MM this has been reflected on the adjusted balance sheet.With the N I
concurrent fundings the existing debt will be retired and the new 2-year line and note have been put into place.This results in new y
debt of$5.21VIM and available working capital of$2.4MM.The current ratio following the transaction will be 2.1 to 1.The debt to net s
worth ratio on the adjusted balance sheet following the transaction is 2.1 to 1.Net working capital is projected to be$4,662.8M. O
These ratios fall well within the normal industry averages.
Days Receivable at 56.9 and Days Payable at 37.0 also lie near the med industry ranges of 59 and 28 respectively.
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Credit Memo Project 0.0 11
Lightcap Industries, Inc. Application Date packet Pg.872
Repayment Ability P&L - Cash Flow - Small Business Concern
Name: Lightcap Industries, Inc. Tax ID: 33-0828715
0.
Note:amounts will display in thousands
Type Of Statement: Tax Return Review In House Projection Projection 2
#Of Months: 12 12 2 12 12 NAICS Q
Date Of Statement: 12/31/2012 12131/2013 02/2812014 12/31/2014 12/31/2015 Statistics m
0
P&L:
i Sales 21 695.7 21,944.3 2,708.4 32,250.0 41,250.0
_ _ _
1 Costs Of Goods -17,753.6 18,794.9 2,091.1 22,988 0 30,365.0 C14 1
__. , _
Gross Profit 3 942.1 3,149.4 617.3 :;; 9,262 0 `- 10,885.0 23.2%= w
_ .
G&A Expenses 3,676.7 3,292.4 698.7 8,566.0 9,529.0
Other Income/(Experise) 81 8 ' 560.2W µ -19.6 :' 0.01, _0.0
Net lnc Before Taxes 347.2 417.2 101.0 696.0 1,356.0 4.5% c !
w .
Income Taxes 0.0 ` 0,0 0.0 0.0 0.0
�.__ _.__.__ _101,, .: 6.0
rNet Inc After Taxes 347.2 417.2 101.0 696.0 1,356.0
L � I
Depreciation/Amortization 1,399.3': 1,330 7 238.7 0.0 1,240.0 Q i
fInterest 165.3 143 2 19.6 0.0 0.0 --
_.._._ r
Rent 600.0 626.1 109.4 0.0 I 0.0
Owners Salaries 2174 0.0 0.0 0.0 0.0
Wages 1270.3.;: 1,285.3 252.6 0.0 0.0 -1
P&L Comments/Analysis
......................................................................................................................................................................................................................................................................................................................................................................................
The borrowers are also seeking to refinance their equipment with Wells Fargo and some existing debt with Community Bank.This financing N
is completely separate from this transaction and is only proposed. The borrower is seeking these financing options because they are ce
exploring opening up a new location in the mid-west to capture the growth of their business and a new sales team they have hired in Illinois.
The new financing documentation has been provided only for the purpose of analyzing the viability of the company to cover their debt �=
following both transactions.With the rapid growth the company is exploring re-structuring their current debt, including an$850M credit line
lk that is due in August 2014.All of the current debt and the credit line is proposed to 1)a new credit line that is estimated at$3MM;2)an O
equipment credit line at$2.2MM.Additionally the bank is proposing additional$1.5MM credit line when the company needs new equipment. N
Since the initial borrowing will be for$5.2MM this has been reflected on the adjusted balance sheet based on the current debt in place. The >
borrower is still negotiating the proposed debt,but the new debt is expected to reduce the borrower's existing debt. The proposed two year
equipment Ian provided in the file for$2.2 Million is being negotiated and is not acceptable to the borrower on those terms. Expenses have N
increased with the growth and moving expenses-these will stabilize after the transition.The borrowers showed the expected growth via r
their projections. oo
Revenue demonstrates profitability since 2009,despite adverse economic conditions.Revenue grew 71.7%in 2010,83.7%in 2011,and is coo
projected sales at 1.159/6 for 2013.There was a 1.5%decrease in 2012 as the company stabilized from the rapid growth,and while some rl
projects that were projected to be completed in 2012 were rolled over to 2013.The gross profit margin has increased from 11.8%in 2009 to
14.4%in 2013.This compares favorably to the NAICS average of 23.2%.The net profit margin has increased from-4.7%in 2009 to 1.9%in c°fl
2013.Accounts Receivable days were 94 in 2009 and decreased to 36 in 2013. c
Revenue demonstrates profitability since 2009,despite adverse economic conditions.Revenue grew 71.7%in 2010,83.7%in 2011,and is r
projected sales at 6.1%-For 2013.There was a 1.5%decrease in 2012 as the company stabilized from the rapid growth.The gross profit N
margin has increased from 11.8%in 2009 to 18.2%in 2012.This compares favorably to the NAICS average of 23.2%.The net profit margin has 1
increased from-4.7%in 2009 to 1.6%in 2012.Accounts Receivable days were 94 in 20090
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Credit Memo Project v3.0 12
Lightcap Industries,'dnc• Application Date Packet Pg.873
6.A.e
Cash Flow
Net Inc Before Taxes 347.2 417.2 -101:0 696.0 1,356.0
+Depreciation 1 399.3 1,330.7 238.7 1,657.0 1,740.0 _
+Interest Expense; 165.3 143 2 :19.6 0.0 0 0 i f9
_ a
+Rental Expense 600.0 626.1 109.4 600.0_ 0.0 _
+Excess Owner's Comp 110.0 110.0 18.3 110 0 110.0 O
F+Other: 0.0 0.0 0.0 _0.0 0.0 Q
+Other. 0:0 0.0 0.0 0.0 ` D.0! u'>
Total Cash Flow 2,621.8 2,627.2 285.0 3,063.0 3,206.0 0
N
-Existing Debt Service 826.4 826.4 137.7 826.4
_ _ - I o
-Project Debt Service_ 2_77.9 277.9 46.3 277.9 277.9 i N F
Line Of Credit-Principal °�
850.0 850.0 1417µ 850.0 850.0 i
-Line Of Credit-Interest 29.8 29.8 5.0 29.8 29.8 o
-Other 0 t} � ` 0.0 - . .
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_ _ O. 0.0 0.0 1; r
Total Cash Requirement 1,984,1 1,984.1 330.7 1,984.1 1,984.1
Cash Surplus(deficit) 637.7 643.1 =46.7 1,078.9 1,221.91
d
Cash Flow Coverage Ratio 1.32 1.32 0.86 1.54 1.621
d
Cash Flow Comments/Analysis(if projections are utilized, describe the basis for the assumptions including who performed Q
the analysis and how the conclusions were reached):
...............................................................................................................................................................................................................................................................................................................................................................................
The borrowers are also refinancing their equipment with Wells Fargo.However this financing is completely separate from this transaction.
The new financing documentation has been provided only for the purpose of analyzing the viability of the company to cover their debt cya
following both transactions.With the rapid growth the company will also be re-structuring their current debt,including an$850M credit line M
that is due in August 2014.All of the current debt and the credit line will be replaced with 1)a new credit line that begins at$31VIM;2)an 'O
equipment facility at$2.21VIM.Additionally the bank has made available an additional$1.51VIM when the company needs new equipment. cn
Since the initial borrowing will be for$5.21VIM this has been reflected on the adjusted balance sheet.With the concurrent fundings the
existing debt will be retired and the new 2-year note and line have been put into place.Revenue demonstrates profitability since 2009,despite to
adverse economic conditions.Revenue grew 71.7%in 2010,83.7%in 2011,and is projected sales at 6.1%for 2013.There was a 1.5% M
decrease in 2012 as the company stabilized from the rapid growth and projects slated to be completed in 2012,rolled over to 2013.The gross
profit margin has increased from 11.8%in 2009 to 18.2%in 2012.This compares favorably to the NAICS average of 23.2%.The net profit
margin has increased from-4.7%in 2009 to 1.6%in 2012.Accounts Receivable days were 94 in 2009 and decreased to 36 in 2012.Accounts `_
payable days were 9.7 in 2010 and decreased to 6.17 in 2011 and are at 11 for 2013. O
O
Rent has been added back,since this will be replaced by the mortgage payments. >
Project principal and interest payments have been deducted. m
The existing nnual debt of$826M has been deducted based on notes that are current) W
g yin place;along with the proposed new annual debt
of$281M. The CDC has also deducted the principal and interest of the line of credit that the borrower has in place in the amount of N
$850,000,though the line is new and the borrower has not used the line. p
The owner's excess compensation has been added back. o
0
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The CDC also collected projections prepared by the borrower for 2014 and 2015,which is supported by their back order and existing work oyl
orders in their pipeline,which has been provided in the file. o
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Rent has been added back,since this will be replaced by the mortgage payments. l
Interest has been added back and then deducted as a whole in the principal and interest payments. c
The owner's excess compensation has been added back. NI
The debt coverage ratios were 2010.57x,2011 1.85x,2012 1.32x and 1.32 for 2013.Without the owner's add-back these would be 1.79x,1.27x, E
and 1.27x. O
V
These do not however take into consideration that the credit line was not put into place until September 2012-therefore the actual debt
coverage without that in 2010-2011 would be 1.1x,and 3.5x. E
On a projected basis,the DCR for 2014 would be 1.54x and for 2015 would be 1.62x. v
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Credit Memo Project 0.0 13
Lightcap Industries, Inc. Application Date: Packet'Pg.874
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Packet Pg. 875
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Personal Discretionary Income
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Lightcap Industries, Inc. a
Name Connie M.Lightcap Tax Return FYE _
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`Note;amounts will display in thousands 12/31/2012 a Q
Income r r
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Salary/Wage 339.5 �
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Interest/Dividends 11.4 c N
Rental Income 0,0 o
Business Distributions 100.9 i
(provide all business name(s)and amount(s)below)
Other(describe below in Comments) 32.6 _
Total Income 484.4 E Q
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Expenses -include all debts for which individual is responsible a c
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Taxes 328.4
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Personal Debt-Residence 10.0 to
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Personal Debt-Other existing obligations 12.0 u
Living Expenses 24.0 c
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Personal Debt-Rental/Investment Property 0,0 r '>
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Personal Debt-Proposed new personal debt to be incurred 0.0 T N
in connection with this project(Le Home equity loan) °c m
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Other(describe below) OA t 0l
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Total Expenses 374.4 £
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Personal Discretionary Income(Total Income-Total Expenses) 110.0 N
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Business Distributions C
Business Distribution Name Amount i is
t Royalties:R ey ea d * " ,
ve `s G`100 rn
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Comments:
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Credit Memo Project 4.0 15 Q
Lightcap Industries, Inc. Application Date
Packet Pg.876'