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Home My WebLink About2002-01-22 - AGENDA REPORTS - CDBG LOAN APPLICATION (2)CITY OF SANTA CLARITA AGENDA REPORT PUBLIC HEARING City Manager ApprovalAS':: Item to be presented byrk DATE: January 22, 2002 SUBJECT: CDBG SECTION 108 LOAN GUARANTEE APPLICATION FOR $1.5 MILLION DEPARTMENT: Administrative Services RECOMMENDED ACTION Conduct a public hearing, and direct staff to submit the final CDBG Section 108 Loan Guarantee Application to the U.S. Department of Housing and Urban Development (HUD) for $1.5 million, to be used for public work improvements to Scherzinger Lane ($1.15 million) and the SCV Boys and Girls Club Sierra Vista facility ($350,000). BACKGROUND The U.S. Code of Federal Regulations 24 CFR 570.704 (m) requires that all final HUD Section 108 Loan Applications be published and a public hearing be conducted. During the fiscal year 2001-2002 budget process, Council directed staff to make this application in the amount of $1.5 million for two projects located in Canyon Country. The loan will fund new street surface, curbs, gutters, and sidewalks on Scherzinger Lane and contribute additional CDBG funds to the Santa Clarita Boys & Girls Club facility at Sierra Vista Jr. High. Staff completed the required income survey for Scherzinger Lane residents in December 2001, and it was declared by HUD as eligible for CDBG assistance. The Boys & Girls Club qualifies under area -wide benefit. The facility will be built in an eligible census block area. The attached application may now be sent to HUD -Los Angeles for review and forwarded to HUD Washington D.C. for final approval. ALTERNATIVE ACTIONS 1. Not approve the application and/or its process. 2. Reduce or increase the amount of the loan. 3. Other action as deemed by the City Council. FISCAL IMPACT Staff estimates that the annual debt service for this loan will be $120,000 annually over the next 15 years to be repaid with future CDBG Entitlement funds. These funds have Agenda Item: Ir CDBG SECTION 108 LOAN January 22, 2001 — Page 2 budgeted in FY 2001-2002 account number 2511-9010. No money from the General Fund will be used to repay this loan. Combined with the Newhall Sidewalk CBDG 108 Loan, total annual 108 debt service will increase to an estimated $373,200. ATTACHMENT Final CDBG Section 108 Loan Guarantee Application to the U.S. Department of Housing and Urban Development (available in City Clerk's reading file). DEL:RKW:hds ..6haoni-22-02Aa APPLICATION Section 108 Guaranteed Loan Application United States Department of Housing and Urban Development (HUD) City of Santa Clarita Administrative Services Department 23920 Valencia Boulevard, Suite 295 Santa Clarita, CA 91355 Contact Person: Dennis Luppens, Management Analyst (661) 259-9561 dluppens@santa-clatita.com I. Aralication Summary Statement The City of Santa Clarita, an entitlement jurisdiction submits this application for a $1,500,000 HUD Section 108 Guaranteed Loan to pay for: 1. New curb, gutter, street and sidewalk. 2. Partial construction cost of a joint -use recreation facility. The loan will be repaid over 15 years with future CDBG Entitlement dollars. The loan will be secured with undeveloped property owned by the City. This application has been prepared pursuant to CFR 24 Section 770.704 (m). H. Meetine HUD National Objectives and Benefits • Scherzinger Lane Improvement Project (SLIP) - $1,150,000 The National Objective for the Scherzinger Lane Improvement Project is Low and Moderate Income, Area Wide Benefit as required under CFR 570.208 (a)(1) — Low/Mod Area. SLIP is located in US Census Block Area 920025. To ensure neighborhood income eligibility however, City staff conducted an income survey of the project area. Since Santa Clarita is an "exception city," the qualifying percentage is 27. The income survey found that indeed, 27% of the residents in the project have incomes at or lower than 80 % of the Los Angeles County median. SLIP construction is funded 100% by the Section 108 Loan. Engineering costs of nearly $200,000 were paid out of annual Entitlement funds from a previous CDBG program year. The construction project consists of approximately one mile of new street bed and asphalt on Scherzinger Lane and its connecting streets to Sierra Highway. The existing street composition is a mix of gravel, oil on gravel, and slurry coat on gravel. The Street has degraded over the past a 30-40 years. Curbs, gutters and sidewalks will also be constructed on these streets where none exist today. These improvements will help greatly to clean up the area, provide concrete surfaces to control stormwater runoff, and S:\FM\GrantsW UD\CONSOLID\2003\applimflon.do increase pedestrian safety by providing a traditional separation of cars and people with the installation of curb, gutter, and sidewalk. • Santa Clarita Valley Boys and Girls Club at Sierra Vista Project (B&GCF) - $350,000 The National Objective for B&GCF is Low and Moderate Income benefiting low/mod persons on an area wide basis. See section 570.208(a)(1)- Low/Mod Area under the US Code of Federal Regulations (CFRs). The B&GCF is to be built in Census Track 90024, a low and moderate income Track.. The B&GCF is not a regional facility. B&GCF will primarily serve the youths and their families who live in the same Census Block as the B&GCF as well as youths and their families who live in surrounding low and moderate Census. B&GCF project will be partially funded by the Section 108 Loan ($350,000). The majority of the construction cost will come from other sources. The total cost is estimated at $6.2 million. The purpose of the loan is to assist in the financing of a free- standing building, approximately 27,000 square feet in size. The facility will be built on William S. Hart School District property located at Sierra Vista Jr. High School. This is a joint venture between the District, City and the Boys and Girls Club. A joint use agreement establishes the operation and maintenance responsibilities between the Club and the District. Seventy five percent of the facility space will be for Club use. The space will contain a gymnasium, computer and learning centers. III. Meeting Community Development Obiectives Both SLIP and B&GCF meet community development objectives of the Infrastructure Improvement and Public Facility needs as identified the City's 2000-2003 Consolidated Plan. Under this Plan, Capital Improvements are ranked as a number one priority. The Plan's goal for facility improvement is "CDBG dollars as well as other resources will be used to increase service capacity of non-profit organizations servicing low and moderate income persons with emphasis on helping youth, seniors and special needs populations." The Plan goal is for street improvement is "CDBG dollars as well as other resources will be used to improve basic living environment of low and moderate income neighborhoods. Primary focus will be given to the installation of curb, gutter and sidewalk in areas where curb, gutter and sidewalk do not currently exist. This information can be found under the corresponding section and summarized on Attachment IV of the Consolidated Plan and is attached herein. Both SLP and B&GCF full under the "high" priority needs as described and identified in Consolidated Plan. IV. Citizen Participation Plan This Loan application and the project it supports have meet the Citizen Participation Plan requirements under CFR Section 570.704.(a)(2). The Loan and its uses were discussed at a noticed public meeting on the City's 2001-2002 Budget. At that public meeting the City Council directed staff to make application for a HUD Section 108 Guaranteed Loan for the aforementioned projects. S:\FIN\GrantsVHUD\CONSOLID\2003\application.doc Subsequently between July 2001 and January 2002, staff has held five public meeting on the proposed Loan and its intended uses. The meeting were held on July 25, 2001, December 11, 2001, December 12, 2001, December 13, 2001 and January 10, 2002. With the exception of the July 25, 2001 all meeting were noticed with legal ads and well as 1/a page news ads in two local papers (The Signal and the Daily News) and the Magazine of Santa Clarita. In addition 2,500 direct mail pieces were sent out to organizations and residents who would be most impacted by the CDBG projects and the loan. The notification process for the meeting of July 25, 2001 used direct mail to residents in the Scherzinger Lane project area. Over 100 participants in all attended the meetings. Staff did not receive negative comments on the proposed Loan or its proposed uses. At all meetings information was presented on how the Loan and its intended uses meet National Objectives, the amount of program income (if any) to be received during the program year, the amount of guaranteed loan funds to be used and its impact on future CDBG Entitlement Funds. V. Publish Community -Wide the Proposed HUD Section 108 Guaranteed Loan On January 12, 2002 a legal notice was published in the City of Santa Clarita newspaper of record, The Signal. The notice advised readers of a public hearing to be conducted by the City Council on January 22, 2002 on the City intent to apply for a Section 108 Loan and the intended use of the loan. The notice provided the time and location of the meeting. All comments (if any) from the public will be attached to this application. S:\FIN\Grants\HUD\CONSOLID\2003\application.doc