cover
TO: Mayor Robert J. O’Connor
FROM: Daniel Barreiro, Chief Community Services Officer
DATE: November 23, 2016
SUBJECT:
Resolution Authorizing an Annual Action Plan Substantial Amendment (2016 - #3) to Reflect Funding Allocations for the Community Development Block Grant (CDBG) Program and Revision to Section 108 Economic Development Program Activity Description.
PURPOSE:
Staff requests authorization of an Annual Action Plan Substantial Amendment (2016 - #3) to provide for a CDBG funding re-allocation and to revise the City’s Section 108 Economic Development Activity Description. The substantial amendment will result in a de-obligation of remaining balances on completed projects, re/allocation of unexpended funds, and adjustments needed to ensure the integrity of the City’s spending obligations. The Block Grant Working Committee (BGWC) met on October 5, 2016 to make the following recommendation for CDBG funding re-allocation:
CDBG PROJECT: Aurora Downtown Revitalization aka Aurora Arts Centre Development Project
CDBG Applicant: The Community Builders (TCB)
Proposed CDBG reprogrammed funds: $700,000.00.
On June 28, 2016 via R16-208, the City approved a Memorandum of Understanding (MOU) for this proposed CDBG project. As part of the MOU Agreement, any City funds such as CDBG/HOME/Section 108 that were identified for the project would require future City Council approval. In August 2016, TCB submitted a CDBG application (for PY 2017 funds) for the project, and it has been recommended that the project utilize reallocated CDBG funds to support the project's economic development activities.
Of note, in addition to the reallocated CDBG funds, the City has also submitted a request for $3M in Section 108 funds towards to the Aurora Arts Centre Development's Galena site activities. The Section 108 funds will require City Council approval at a future date. The City is also working with HUD to allocate $600,000 in HOME funds to the project’s other site location located at 32 S. Broadway. Due to the project’s affordability period expiration date and HUD’s HOME funding commitment requirements, funding approval will be sought from City Council at a future date.
The BGWC met on November 14, 2016 and made the following recommendation for the Amendment to the City’s Section 108 application:
SECTION 108:
Under the Section 108 Application submitted in October 2016, the City provided the following description under the Economic Development Loan Pool activity:
The City of Aurora seeks to establish a lending pool to make small business loans between $5,000 and $100,000 that support entrepreneurs who are unable to access traditional financing. It is contemplated that this lending pool would be outsourced to an area not-for-profit entity that is experienced in micro-lending.
The City seeks to amend the description and any associated references to the minimum and maximum thresholds ($5,000 and $100,000, respectively) to reflect the following revision:
The City of Aurora seeks to establish a lending pool to make small business loans that support entrepreneurs who are unable to access traditional financing. It is contemplated that this lending pool would be outsourced to an area not-for-profit entity that is experienced in micro-lending.
The BGWC held a public hearing on the above proposed substantial amendment on Monday November 7, 2016, 5:00 PM in the City Hall Council Chambers. Initially, the 30-day public comment period was scheduled to close on November 22, 2016, the date of the City Council's meeting; however, in an effort to align the project's CDBG funding approval with the project's development agreement approval process, the public comment period has been extended and will close on the date of the City Council's final approval for the project's development agreement.
BACKGROUND:
The City of Aurora receives an annual CDBG entitlement allocation. Funding that is not expended during the grant period is reallocated to other program(s) or project(s) in order to make use of the federal funding investment in the community. Under this Substantial Amendment, CDBG reallocated funding for the Aurora Downtown Revitalization aka Aurora Arts Centre Development Project is recommended as per unallocated funds, unexpended funds, program income used, and/or cancelled projects from the following CDBG Program Years: 2004, 2010, 2011, 2012, 2013, 2014, 2015, and 2016. The respective CDBG Program Year reallocated funding sources for the proposed 2016-#3 CDBG project are shown on Exhibit A.
Additionally, an amendment to the City’s Section 108 Loan Guarantee Economic Development Activity which was approved by City Council via R15-286 on October 13, 2015 is recommended. The City formally submitted the application on October 29, 2016, and the application is currently under review by HUD. Since the time of the City’s application submittal, staff recommends the removal of the $5,000 minimum and $100K maximum thresholds to allow for additional gap financing opportunities for large scale development projects. In proposing the amendment, the policy of the program will be to award funds in based upon leveraged resources, with the understanding that micro and small business development projects will also be considered for funding, provided that they meet the program's HUD eligibility/qualification requirements.
All required public notification and hearing requirements have been met as described above. To date, no public input or comment has been received
DISCUSSION:
Funding will be available in the 2016 City Budget, through budget amendments to the program's account 221-1330-801-43-series.
IMPACT STATEMENT:
No impact.
RECOMMENDATIONS:
Staff recommends approval of a Resolution Authorizing an Annual Action Plan Substantial Amendment (2016 - #3) to Reflect Funding Re/Allocations for the City’s CDBG and Section 108 Program activities.
cc: Alderman Saville, Chairman
Alderman Donnell
Alderman Irvin
Alderman Hart-Burns, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing an Annual Action Plan Substantial Amendment (2016 - #3) to Reflect Funding Allocations for the Community Development Block Grant (CDBG) Program and Revision to Section 108 Economic Development Program Activity Description (PUBLIC HEARING).
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, (the City of Aurora has initiated numerous community development and housing activities through funding by the U. S. Department of Housing and Urban Development (HUD); and
WHEREAS, the City of Aurora has a Consolidated Plan and Annual Action Plan which have been adopted by the City Council and which have defined priorities for CDBG funding; and
WHEREAS, the City of Aurora’s Block Grant Working Committee recommended
adoption of the Annual Action Plan Substantial Amendment to reflect CDBG funding
reallocations at its November, 2016 meeting; and
WHEREAS, funding will be available in the 2016 City Budget CDBG program account (221-1330-801-43-series) for the Aurora Downtown Revitalization aka Aurora Arts Centre Development Project in the amount of $700,000.00; and
WHEREAS, the City of Aurora’s Block Grant Working Committee also recommended
adoption of the Annual Action Plan Substantial Amendment to reflect a revision to the City's Section 108 Economic Development Activity description at its November 14, 2016 meeting; and
WHEREAS, the amended Section 108 Economic Development Activity description has been modified by removal of the $5,000 minimum and $100,000 maximum thresholds as follows:
The City of Aurora seeks to establish a lending pool to make small business loans that support entrepreneurs who are unable to access traditional financing. It is contemplated that this lending pool would be outsourced to an area not-for-profit entity that is experienced in micro-lending.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, finds as facts all of the preamble recitals of this Resolution and hereby authorizes an Amendment to reallocate prior CDBG Program Years' unexpended and unallocated funds to the 2016 Annual Action Plan, in order to Reflect a Funding Allocation for the Community Development Block Grant (CDBG) Aurora Downtown Revitalization aka Aurora Arts Centre Development Project, and further, to revise the Section 108 Economic Development Program Activity Description by removing the minimum and maximum loan thresholds, and therefore the Mayor, Chief Community Services Officer or their designee(s) are hereby authorized to execute the CDBG agreements with The Community Builders, Inc., along with any other documents associated with this Amendment, including but not limited to HUD's program administration requirements.