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HomeMy WebLinkAboutS05-Community Development CIT~OF SAN BERNARDltO - REQU&:>r FOR COUNCIL AC From: Kenneth J. Henderson, Director Subject: Approval of Agreement for Temporary Consultant Services (Loan Officer for Small Business Loan Program) Dept: Community Development Date: July 15, 1987 Synopsis of Previous Council action: NONE Recommended motion: ADOPT RESOLUTION Contact perlOn: Kenneth J. Henderson Phone: 5065 Supporting deu etteched: Yes/Staff Report Ward: ]-7 FUNDING REQUIREMENTS: Amount: $2.1,819.00 (include salary and bene fits ~ Source: (ACCT. NO.) 12.1-1.45 (ACCT. DESCRIPTIONI) UDAG REPAYMENT AND INTEREST , EARNING ~ J Finance: ~, <Z k" ~ Council Note.: L_ 5-5 CITCoF SAN BERNARDIO - REQUO FOR COUNCIL ACt:DN STAFF REPORT In December, 1986, the Mayor and Common Council approved the establishment of a small business loan program and appro- priate program guidelines to be administered by the Community Development Department. Assumption by City of various loan, lease and lease/purchase agreements from the San Bernardino Economic Development Council was included as part of the Council action taken establishing and capitalizing this economic development program. Initially, staff and the Mayor and Common Council considered establishing a full-time permanent position to assist in the implementation of the small business loan program. Action was deferred on the matter at the request of the Director of Community Development until additional information could be obtained regarding activity and demand levels. When the Mayor and Common Council authorized the separation of the housing and community development functions from the Redevelopment Agency, the position of Rehabilitation Coordinator was vacant. In November, 1986, the department experienced the unanticipated resignation of the loan officer. Both positions were filled in February, 1987 and the anticipated increases in activity and overall production have been realized. For the period ended June 30, 1987, some $458,414 was loaned to owners of single family and multi-family dwelling units ($392,306 and $66,108, respectively). What is more impor- tant, however, is that with the above referenced positions filled and the incumbents properly trained, some $195,206 has been loaned in the last quarter alone (April 1, 1987 to June 30, 1987) Because of the activity associated with the Neighborhood Rehabilitation Program (single family), I do not have the staffing resources, nor does the current loan officer have the time to devote to processing small business loans. The process and information requested for small business loans are substantially different than processing and approving loans for residential rehabilitation. Following is the type of information requested of applicants for small business loan assistance: - Use of Funds - Summary of Collateral - Business Plan - Profit and Loss Projection and Explanation - Personnel Resume - Personal Family Budget (if personal property used as security. ) - Personal Income Tax Returns (last three (3) years.) - Copy of Lease Agreement(s) 7/15/87 75.0264 c .....-.... ~ v .-.J - Copies of Signed Contracts or Indication of Interest from customers/Vendors/Suppliers - Copies of Fictitious Trade Name, Partnership, Agreement or Articles of Incorporation - Franchise Agreement (if applicable) - Pro Forma (income and cost and income) - Credit Report - If purchasing or expanding an existing business, provide: :> Last three (3) years federal tax returns. Most recent profit and loss statement. Last three (3) years audited financial statement. Most recent balance sheet. Because of the above, it is more effective and efficient to assign various functions associated with the small business loan program to one (1) person. I feel that once the program is completely geared up and the Economic Development Agree- ments assumed by the City are restructured as appropriate, current staffing levels should allow the department to effectively discharge the functions related to this program. In conclusion, approval of the resolution authorizing temporary consultant services would have no impact on the City's general fund, as the source of financing for this position is interest income and UDAG repayments. I recommend adoption of the resolution. Development KJH/lab/0397 7/15/87 C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESO~ NO. :) -"" --i RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH VAL MAHABIR TO PROVIDE SMALL BUSINESS LOAN ASSISTANCE AND LOAN OFFICER SERVICES FOR THE COMMUNITY DEVELOPMENT DEPARTMENT. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The Mayor and Common Council of the city of San Bernardino is hereby authorized and directed to execute of behalf of said City an agreement with Val Mahabir to provide small business loan assistance and loan officer services, a copy of which is attached hereto as Exhibit "A" and incorporated herein by reference as though fully set forth at length. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the city of San Bernardino at a meeting thereof, held on day of , 1987, by the following vote, to wit: AYES: NAYES: ABSENT: city Clerk The foregoing resolution is hereby approved this day of , 1987. Mayor, City of San Bernardino Approved as to form and legal content: City Attorney KJH/lab/0393 7/15/87 C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 o 0 :) AGREEMENT THIS AGREEMENT is made and entered into this day of , 1987, by and between the CITY OF SAN BERNARDINO, a municipal corporation, 300 North "0" Street, San Bernardino, California, referred to as "city" and VAL MAHABIR, an individual, referred to as "consultant". City and consultant agree as follows: 1. General DescriDtion of Work to be Done. City hereby retains consultant to perform the job of Loan Officer, Small Business Loan Program, in accordance with guidelines as established by the Mayor and Common Council and the Director of Community Development, a copy of which is attached hereto as Exhibit "B". Such services shall include but are not necessarily limited to those set forth in the attached job description, Exhibit "C", and include at a minimum the following: (a) Under the direction of the Director of Community Development, consultant shall review, analyze and make written recommendations to the Loan Review Committee with respect to individual applications for financial assistance. The Mayor and Common Council shall have ultimate authority for approval of all loans. (b) Consultant, under general direction, shall market the Community Development Department Economic Development Small Business Loan Program through meetings with local lending institutions, design of appropriate brochures and close coordination with Small Business Administration and the Minority Business Development Agency. (c) Provide technical assistance to eligible small businesses including, but not limited to, financial management, EXHIBIT "A" 7/15/87 C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ,.-... U :> o inventory control and marketing. 2. Termination of Aqreement. Either party may terminate without cause and for any reason this agreement by giving five (5) days advance written notice of termination to the other party. 3. Term. The term of this agreement is for a maximum of six (6) months, commencing on or about July 21, 1987, for one- hundred, eighty (180) consecutive days concluding on or about January 31, 1988. 4. provision for PaYment. Payment to consultant for services provided under this agreement shall be at the rate of $20.98 per hour and in no event shall exceed $839.00 per week. In addition, consultant shall be reimbursed for the use of his personal automobile at the rate of $0.25 per mile for necessary and appropriate activities. Consultant shall maintain and file with the Director of Community Development a record of hours expended on assigned duties and the Director of Community Development shall submit a claim or request for payment to the Finance Department every two (2) weeks. Consultant shall provide services for at least one-hundred, sixty (160) hours per month. Notwithstanding the foregoing, consultant shall devote all hours necessary to implementing the Community Development Department Economic Development Small Business Loan Program. Consultant shall assume and pay all out-of-pocket expenses and costs of performing services under this agreement and City shall not be liable for such costs and expenses without the advance approval of the Director of community Development. 5. Amendments. This agreement may be amended or modified 7/15/87 -2- o o o ~ 1 only by written agreement executed by both parties. 2 6. Assianment. Consultant's rights under this agreement 3 shall not be assigned by consultant to any other person, firm, or 4 corporation without the prior written consent of the City. 5 7. RelationshiD of Parties. Consultant is acting as an 6 independent contractor, and not as an employee of the City. In 7 the performance of personal services pursuant to the provisions 8 of this agreement, consultant shall not be supervised, directed, 9 or under the control or authority of any City officer or employee 10 except and to the extent as may be expressly or implicitly 11 required by the terms and provisions of this agreement. Any 12 direction or control so required under this agreement shall be 13 limited to broad objectives or goals of the project or program to 14 be accomplished and not to the details and procedures to 15 accomplish such objectives or goals. Consultant shall not be 16 obligated to conform to the supervision or direction of City 17 officers or employees which are authorized herein. Changes or 18 modifications of said objectives and goals may be made by written 19 recommendations of either party subject to the concurrence of the 20 other party in writing. 21 8. Hold Harmless. Consultant hereby agrees to, and shall 22 hold City, its elective and appointive boards, commissions, 23 officers, agents and employees, harmless from any liability for 24 damage or claim for damage for personal injury including death as 25 well as from consultant's operations under this agreement. 26 Consultant agrees to, and shall defend City and its agents and 27 employees from any suit or actions at law or in equity for 28 damages caused or alleged to have been caused by reason of -3- 7/15/87 C 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 o :J o consultant's performance hereunder, including any claims that may arise against City by reason of consultant's legal relationship with City being categorized as other than that of an independent contractor. IN WITNESS WHEREOF, the parties have executed this agreement on the day and year first above written. CITY OF SAN BERNARDINO BY: Mayor CONSULTANT BY: Val Mahabir ATTEST: city Clerk Approved as to form and legal content: City Attorney KJH/lab/0394 -4- 7/15/87 c Th_ CIT'nF SAN BERNAR/l""'tO COMMUNITY ~ELOPMENT DEP~ENT ECONOMIC DEVELOPMENT PROGRAM :) "GUIDELINES" FOR SMALL BUSINESS REVOLVING LOAN FUND The Economic Development Program (EDP) is established to enhance economic activity, encourage the growth of small business and to promote the physical revitalization of City of San Bernardino as a whole, with particular emphasis in economically depressed areas. The major goal of this program is to improve the overall economic growth and availability of jobs, goods and services to All city residents. General proaram Features 1. The maximum amount of EDP participation in a single project is $50,000, the minimum loan is $10,000. Loans for amounts less than $10,000 will be considered on a case by case basis for equipment purchases only. 2. The EDP will fund a loan for no more than thirty-five percent (35%) of the total project. 3. The minimum matching requirement of private financing to EDP injection is one dollar ($1.00) private financing for each one dollar ($1.00) of EDP financing. 4. The business concern (loan applicant) must have been in business for at least three (3) years, unless there is strong evidence of recent experience in the same or an allied business. 5. Loans for business start-ups will be considered on an exception basis, and only in conjunction with Small Business Administra- tion assistance for same. Economic Development Program assis- tance in most instances will be used to assist the client in meeting Small Business Administration Loan Equity requirements. 6. The interest rate is negotiable, but shall D2t be less than five-percent (5%). 7. The maximum loan term and repayment conditions shall be deter- mined on a case by case method, based upon the financial status of the borrower, i.e., cash flow analysis. In addition, the loan terms and conditions of a participating financial institu- tion may also be a basis for determining loan term and repayment conditions. 8. Matching funds must be placed in loan proceeds for disbursement. matching funds are provided by a (e.g., Bank), the matching funds institution. an escrow account with the EDP However, in cases where the private lending institution may be disbursed by that 9. Matching funds may consist of a bank loan, or any other funds from a non subsidized source. EXHIBIT "B" Q Economic Development divided or set aside submittals. Funding pro~am resources~all not be allocated, for individual properties prior to loan is on a first-come first served basis. ~ 11. Applicants will be charged a loan processing fee equal to one percent (1%) of the amount of financial assistance requested. Who Mav Aoolv Applications will be accepted from small, minority and female-owned businesses to physically improve commercial property and commerce within the City limits. In certain rare cases, funding may be considered for economically viable businesses. These businesses may be sole Proprietorships, Partnerships or Corporations. Selection Criteria Loan proceeds are to be used for commercial rehabilitation, pre- servation and economic development activities which further the City's overall economic development strategy. Loan consideration shall be based on the following criteria: 1. Creation of jobs (low/moderate income). 2. Retention of jobs (low/moderate income). 3. provision of increased goods and services in the City. 4. Retention of goods and services in the City. 5. provision of physical improvements to eliminate blight. The desired ration of increased jobs to job for each $10,000 in loan proceeds. reviewed on a case by case method. loan proceeds is one (1) Each project will be Eliaible Activities Eligible activities as defined under Section 570.202(a) and (b) and 570.203 of the CDBG Regulations dated October 31, 1984, and as they may be amended by BUD include, but are not limited to, the follow- ing: 1. Interior and/or exterior rehabilitation, restoration or altera- tion of commercial properties. a) Leasehold Improvements b) Seismic Improvements c) Other Improvements 2. Purchase of equipment. 3. Purchase of commercial property for expansion of an ongoing business. 4. Working capital, if secured by physical assets, e.g., real property or equipment. o Business expansior. d.cti'Qies. 0 6. Refinancing of existing debt (non-construction).* *The Community Development Department must first determine that such activities are necessary or appropriate to carry out an economic development project under Section 570.203 Activities. The Community Development Department must first find that such financ- ing is necessary and appropriate to achieve the recipient's community development objectives. :) Collateral The collateral shall be identical to that required by the partici- pating lending institution, where said collateral is adequate to cover both loans, with the City willing to subordinate its rights to the lending institution when necessary. Additional collateral shall be required in cases where that held by the lending institu- tion is not adequate to cover the City's interest. Such collateral may be, but is not limited to, Trust Deeds, Equipment Liens, and personal guarantees provided by the principals of the business. In cases where a private lender "is not participating in the project, collateral must be adequate to cover the EDP loan. Construction 1. All construction work must be performed under the guidelines of the Davis-Bacon Act, which requires that all construction employees are paid at least the prevailing wage for his/her job classification. 2. The City shall not be responsible for the quality of workmanship on construction activities or equipment purchases utilizing the proceeds of the EDP. The borrower is responsible for the selection of all contractors and vendors. However, the City will make periodic inspections to ensure that the contracted work has been performed and/or equipment has been delivered as specified. The Loan Committee The EDP Loan Fund Advisory Board reviews all loan proposals which have been recommended for funding by CDD staff. The committee is comprised of eight (8) members, as follows: 1. Director (or his/her designee) Community Development Department (non-voting) 2. Manager (or his/her designee) Wells Fargo Bank of San Bernardino 3. Manager (or his/her designee) Bank of America, San Bernardino Branch 4. Manager (or his/her designee) Home Savings Bank of San Bernardino 5. Manager (or his/her designee) Fist Interstate Bank of San Bernardino c Manager (or his/h~_ des~ee) Price Waterhouse of San~rnardino Certified Public Accountant o ~ 7. District Manager Golden state Insurance Company San Bernardino Office 8. Director, Institute for Training and Development San Bernardino Community College All loan applications must be approved by a majority vote of the committee in order to proceed to final processing. The loan committee shall meet a minimum of one (1) time per month. Dates to be determined by the Committee. The actions of the Loan Committee are recommendatory only. approval of the loan application, if granted, will be made Mayor and Common Council of the City of San Bernardino. Final by the RJH/lab/0250 c CITY OF SAN BhRNARDINC) December, 1986 o . -- "---,,..,y ""'\a ' ..!,__...J....;..~. :;;.d:~ 12-9-f~ LOAN OFFICER* JOB DESCRIPTION Under general direction, to perform administrative and analytical work in processing applications for housing and commerical rehabilitation loans; to assist in implementation of a variety of residential and commercial rehabilitation and economic development financing programs. REPRESENTATIVE DUTIES Disseminates loan program information to prospective loan applicants; interview loan applicants, verifies information obtained and prepares application for financial assistance; determines applicant's eligibility for loans based on established guidelines and recommends loan approval or denial to loan committee; determines most appropriate types of loans; computes loan amounts and terms; prepares loan documents and oversees signature of all loan and contract documents; establishes and maintains working relationships with title companies, financial institutions, credit bureaus and public agencies. Prepares correspondence, reports, and program analysis as required; maintains records, files and workload logs; maintains running balance of funds; disburses funds to contractors and vendors; prepares loan close-out documents and distributes to appropriate parties; assists in adminis- tration of loan collection process. Performs related work as required. MINIMUM OUALIFICATIONS Bachelor's degree with emphasis in accounting, business administration, or a closely related field, and 2 years experience in loan processing, accounting, or finance. Additional qualifying experience may be substituted for the educational requirement on a year-for-year basis up to a max- imum of 2 years. *Formerly titled Loan Counselor Commission) (2184) (Community Development (Continued) EXHI3IT lie" c Possession of a quired. val~ California ~verls license is re- ~ GENERAL QUALIFICATIONS Knowledge of: Methods, practices, and terminolgy used in financial and statistical reports and loan applications, Basic accounting practices. Ability to: Plan and organize administrative work effectively, Write clear and accurate reports and correspondence, Follow written and oral instructions, Establish and maintain effective public relations, Work effectively with other employees and associated agencies. ORGANIZATIONAL RELATIONSHIPS The Loan Officer is a staff position in the Community Deve- lopment Division and works under the direction of the Reha- bilitation Coordinator.