Resolution Number 99-3-16-4RESOLUTION NO. 99-3-16-4
ADOPTING COMMUNITY DEVELOPMENT BLOCK GRANT
PROGRAM INCOME REUSE PLAN
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO, CALIFORNIA, ADOPTING A LOCAL PLAN ("PROGRAM
INCOME REUSE PLAN") FOR THE REUSE OF PROGRAM INCOME DERIVED
FROM THE REPAYMENT OF STATE OF CALIFORNIA COMMUNITY
DEVELOPMENT BLOCK GRANT FUNDS
WHEREAS, the City of San Juan Capistrano, 32400 Paseo Adelanto, San Juan
Capistrano, California 92675, was awarded $500,000 in Community Development Block Grant funds
from the State of California Housing and Community Development Department; and,
WHEREAS, a majority of this grant will be used to provide rehabilitation loans to
income eligible mobile home owners; and,
WHEREAS, the City will be receiving program income as a result of future repayment
of these loans; and,
WHEREAS, the State Housing and Community Development Department requires the
City to adopt a Program Income Reuse Plan to establish guidelines on the policies and procedures for
the administration and utilization of program income received by the City.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San
Juan Capistrano does hereby make the following findings:
1. The proposed Plan is consistent with the policies and objectives of the San Juan
Capistrano General Plan; and,
2. The proposed Plan is consistent with the policies and objectives of the San Juan
Capistrano Housing Element; and,
3. The proposed Plan is consistent with the State of California Housing and
Community Development Community Development Block Grant Program.
BE IT FURTHER RESOLVED, that the City Council of the City of San Juan
Capistrano does hereby adopt the Program Income Reuse Plan, attached hereto.
PASSED, APPROVED, AND ADOPTED this 16th day of
March ,1999. "1
ATTEST:
f
CITY CLERKJ
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GREINER, MAYOR
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074
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF SAN JUAN CAPISTRANO )
I, CHERYL JOHNSON, City Clerk of the City of San Juan Capistrano, California, DO
HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No.
99-3-16-4 adopted by the City Council of the City of San Juan Capistrano, California, at
a regular meeting thereof held on the 16th day of March 1999, by the following
vote:
AYES: Council Members Jones, Swerdlin, Hart, Campbell
and Mayor Greiner
NOES: None
ABSTAIN: None
ABSENT: None
(SEAL)
CHERYL JOHNSON, CfTY CLERK
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07S
PROGRAM INCOME REUSE PLAN
City of San Juan Capistrano
A Reuse Plan Governing Program Income from CDBG-Assisted Activities
The purpose of the plan is to establish guidelines on the policies and procedures for the administration and
utilization of program income received as a result of activities funded under the State Community
Development Block Grant Program.
Need for Plan Governing Reuse of Program Income. This Reuse Plan is intended to satisfy the
requirements specified in Federal Statute and Regulation at Section 1040) of the Housing and Community
Development Act ("the Act"), as amended in 1992 and 24 CFR 570.489(ex3). These statutory and regulatory
sections permit a unit of local government to retain program income for CDBG-eligible community
development activities. Under Federal guidelines adopted by the State of California's CDBG program, local
governments are permitted to retain program income so long as the local government has received advance
approval from the State of a local plan that will govern the expenditure of the program income. This plan has
been developed to meet that requirement.
Program Income Defined. Program income is defined in Federal Regulation at 24 CFR 570.489(e) which
specifies that program income is the gross income received by the jurisdiction that has been directly
generated from the use of CDBG funds. (For those program income -generating activities that are only
partially funded with CDBG funds, such income is prorated to reflect the actual percentage of CDBG
participation). Examples of program income include: payments of principal and interest on housing
rehabilitation or business loans made using CDBG funds; interest earned on program income pending its
disposition, and interest earned on funds that have been placed in a revolving loan fund account; net proceeds
from the disposition by sale or long-term lease of real property purchased or improved with CDBG funds;
income (net costs that are incidental to the generation of the income) from the use or rental of real property
that has been acquired, constructed or improved with CDBG funds and that is owned (in whole or in part)
by the participating jurisdiction or subrecipient.
If the total amount of income generated from the use of CDBG funds (and retained by the City) during a
single program year (July 1 through June 30) is less than $25,000, then these funds shall not be deemed to
be program income and shall not be subject to these policies and procedures. Costs incurred that are
incidental to the generation of program income may be deducted from the gross income to determine the
program income amount.
Reuses of Program Income. Program income must be: a) disbursed for an activity funded under an open
grant prior to drawing down additional Federal funds; b) forwarded to the State of California, Department
of Housing and Community Development (Department); or c) distributed according to this Program Income
Reuse Plan that has been approved by The City of San Juan Capistrano City Council and the San Juan
Capistrano Community Redevelopment Agency. The City's Program Income will be used to find eligible
CDBG activities that meet a national objective.
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Eligible activities and national objective requirements are specified in Federal Statute at Section 105(a) and
in Federal Regulations at 24 CFR 570.482 and 24 CFR 570.483. The Reuse Plan shall speck all proposed _
uses of thesefunds and the plan shall be adopted by the local governing body after compliance with the
locality's citizen participation process as specified in the City's Citizen Participation Plan.
The City reserves to itself the options of utilizing pr -gram income to fund a CDBG-eligible activity that has
been written into a general allocation grant application; or, to amend an open CDBG grant to include an
additional CDBG-eligible activity that will be funded from program income.
Distribution for Reuse of Program Income. The City's program income will be distributed as follows:
One revolving loan fund (RLF) is established to utilize the program income. The purposes and
allowed uses of funds under this RLF are as follows:
Housing Rehabilitation Revolving Loan Fund
This fund will be principally used for the purpose of making loans to rehabilitate residential units
(mobile homes and single family dwelling units) occupied by households which have an annual
income which is 80% or less of the county's median income. Loans will be available on a city-wide
basis to qualified households.
At least 51% of the funds expended for activities funded under this RLF shall be used on revolving
activities (i.e., loans). No more than 18% of the funds expended from this RLF shall be used for
activity delivery costs. No more than t /e of the amount expended annually may be expended for
general administrative costs related to this RLF activity. In any event, the total expended for non -
revolving activities (activity delivery costs and general administration) shall not exceed 49% of the
total funds expended during the program year (July 1 through June 30).
The review and funding of requests for CDBG loan assistance under this RLF shall be conducted
under the Housing Rehabilitation Program Guidelines that have been adopted by the City. All
assistance provided to activities under this RLF shall be made for activities that are located within
the City's jurisdiction.
If the activities funded under the RLF are for the same activities as those funded under an open State
CDBG grant agreement, then the funds available in this RLF shall be expended prior to drawing
down funds from the State CDBG program.
The City shall comply with all State CDBG reporting requirements, including submittals of an annual
Grantee Performance Report for each RLF and submittals of the required Annual Program Income Report.
The City shall ensure that the use of program income under this plan complies with all CDBG program
requirements. These requirements include citizen participation, environmental review, equal opportunity and
labor standards, Section 3, acquisition and relocation, procurement and property management and
maintenance of adequate accounting and record keeping systems. To ensure ongoing compliance with CDBG
requirements, the City shall utilize the latest available State CDBG Program Grant Management Manual for
guidance on compliance procedures and policies.
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