03/13/1985 Meeting - Laserfiche WebLink

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M E MaR AND U M e March 5, 1985 TO: Eugene City Council FROM: Interim Community Development Committee (I-CDC) SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT THREE-YEAR PLAN Background The Interim Community Development Committee was created in April 1983 to "make recommendations to the City Council with respect to the future direction of the City's Community Development and Housing programs and po1icies." This spring, a new three-year goal plan needs to be submitted to the Housing and Urban Development (HUD) area office. This three-year plan identifies program areas and estimated funding allocations. Currently, the City's Community Development Block Grant (CDBG) program is operating on a temporary, one-year plan. The three-year plan is a guide which can be amended at any time during the three years if there is a need to respond to changes in local priorities. The attached chart outlines each of the categories and the estimated appro- ,priations for the next three years of CDBG funding. This recommendation has the unanimous support of the I-CDC. The I-CDC reviewed the City Council goals, the Six-Point Economic Development and Diversification Program, the'1984 Community Goals and Poli,cies document, and the history of Community Development Block Grants in Eugene. The com- mittee also held two advertised public hearings. The recommendations are all based on direction given by one or more of these sources. - Goal 1: Economic Development Promote economic development and ,diversification through Business Development Loan Fund job creation loans to new or expanding businesses. Funding Strategy: The infusion of capital in the Business Development Loan Fund is vital in the early years. Most loans are repaid within a three-year period. As repayment income from loans increases each year, the need for capital from the block grant is reduced. By allocating 35 percent of the grant ($454,650) to this goal in year one, 30 percent of the grant ($389,700) in year two, and 25 percent in year three ($324,750 when the income stream is increased), over $1.8 million will be available to lend through the three-year period. This takes into consideration projected income from loan repayments as well. All of the policy documents reviewed by I-CDC refer to economic development as a primary policy and program goal for the City. Accordingly, the CDBG Three- Year Plan responds by giving economic development a top priority in funding. ~ In the past year, twelve loans were booked, totaling over $485,000. The Business Development Loan Fund is seeing dramatic increases in activity.