HomeMy WebLinkAbout _ 4.2(c)--Adopt Resolutions for CDBG Section 108 Guaranteed Loan
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Approve and authorize the following actions related to the Community Development Block
Grant Section 108 Loan Guarantee Program to assist with the South City Park Redevelopment
Project:
(1) Adopt Resolution accepting a Section 108 Program Loan, pledging the City of Redding’s
general fund ($240,000) as security, and authorizing the City Manager to execute a
United States Department of Housing and Urban Development Section 108 Contract,
Note, and related documents containing that pledge;
(2) Adopt Resolution approving the 19th Amendment to City Budget Resolution No. 2023-
060 appropriating $2,698,000 for the revised Section 108 Program funding of the South
City Park Project and establishing a Section 108 payment guarantee for Fiscal year 2023-
24;
(3) Find that applying for and accepting grant funding is not considered a project under the
California Environmental Quality Act; and
(4) Find that applying for and accepting grant funding is exempt under the National
Environmental Policy Act under Title 24 CFR 58.34(a)(3).
Fiscal Impact
The proposed amount of funds to be borrowed from the United States Department of Housing
and Urban Development (HUD) under the Community Development Block Grant (CDBG)
Section 108 Loan Guarantee Program (Section 108) is $2,458,000 for the South City Park
Project (Project). It is proposed that the funds will be drawn down in five installments. Each
installment is charged a two percent processing fee plus $70. The amount of interest charged on
the overall balance of the funds is based on the Three-month Treasury Bill Rate plus 35 basis
points or presently, about 5.675 percent. Repayment is based on a 20-year loan term. Each year,
interest only payments will be paid quarterly with a principal payment due in August of each
year. Based on the most recent calculation by the Finance Department, the highest annual
payment, taking into consideration both interest and principal is approximately $240,000.
MEETING DATE: November 7, 2023
ITEM NO. 4.2(c)
FROM:
***APPROVED BY***
sbade@cityofredding.org
btippin@cityofredding.org
SUBJECT: 4.2(c)-Consider adopting Resolution for the Community Development Block
Grant Section 108 Guaranteed Loan.
Steve Bade, Assistant City
Manager
Report to Redding City Council November 2, 2023
Re: 4.2(c)--Adopt Resolutions for CDBG Section 108 Guaranteed Loan Page 2
The City of Redding (City) is also required to provide collateral for the loan. It is requested that
the City set-aside General Fund dollars as security for the loan. This “Pledge” must be placed
into the City’s budget year-after-year, for the 20-year loan term, as a line item. The risk to the
City’s General Fund is low as the City has been an entitlement jurisdiction, receiving annual
CDBG funding allocations, for more than 40 years.
Each year the CDBG Section 108 payment will be included in the Annual Action Plan as a
project. Payment of the Section 108 Loan will decrease the amount of CDBG funds available to
other infrastructure projects by the amount of the annual payment.
The Section 108 draws will be done on a reimbursement basis. The initial draw should be
received within 45 days of request and subsequent draws should be received in seven days.
Alternative Action
The City Council (Council) may choose not to accept the terms of the CDBG Section 108. Not
accepting the proposed terms will jeopardize the ability of the City to complete the South City
Park Renovation Project’s current scope. Either the scope of the Project would need to be
substantially reduced, or the Project may not proceed altogether, depending on other grant
funding earmarked for the Project.
Background/Analysis
In September 2019, as part of the Block 7 North Block Development Agreement approval, staff
was authorized to apply for a Section 108 loan in the amount of $3,500,000. In August 2022, the
Council approved the Section 108 financing terms and conditions and adopted Resolution No.
2022-085, authorizing the City Manager to execute all necessary documents or contracts to
obtain the loan. However, in November 2022, the CDBG Section 108 loan funds via Resolution
No. 2022-115 were re-appropriated to the Project.
In September 2023, the City’s Housing Division submitted a revised Section 108 application in
the amount of $2,458,000 to fund the Project. As part of the Section 108 loan process, a
resolution must be considered by Council. If the Section 108 Loan and noted terms are approved
by Council, staff will send the Resolution and related documents to HUD . HUD will review the
documents and confirm the funding commitment and interest rate calculations. Once approved,
HUD will forward the Section 108 Loan agreement and associated documents back to the City
for City Manager signature.
Environmental Review
Applying for and accepting funding is not considered a project under the California
Environmental Quality Act (CEQA).
Under the National Environmental Policy Act (NEPA), administrative and management
activities such as applying for and accepting funding are considered exempt activities.
Site specific environmental studies are in progress for South City Park Redevelopment Project,
and CEQA/NEPA determinations will be made prior to executing any construction contracts.
Report to Redding City Council November 2, 2023
Re: 4.2(c)--Adopt Resolutions for CDBG Section 108 Guaranteed Loan Page 3
Council Priority/City Manager Goals
• Government of the 21st Century – “Be relevant and proactive to the opportunities and
challenges of today’s residents and workforce. Anticipate the future to make better
decisions today.”
• Economic Development- “Facilitate and become a catalyst for economic development in
Redding to create jobs, retain current businesses and attract new ones, and encourage
investment in the community.”
Attachments
^Resolution - Section 108
^Resolution - Budget
Previous Staff Report - August 2, 2022 item no. 9.2(c)--Consider Agreements and adopt four
Resolutions for the Block 7 North Block Development
Previous Staff Report November 1, 2022 item no. 4.6(c)--Approve Funding Changes for South
City Park and Block 7 Projects
RESOLUTION NO. 2023-____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
ACCEPTING A SECTION 108 GUARANTEED LOAN UNDER SECTION
108 OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF
1974, AS AMENDED, PLEDGING THE CITY OF REDDING’S GENERAL
FUND AS SECURITY, AND AUTHORIZING BARRY TIPPIN, CITY
MANAGER, TO EXECUTE A HUD SECTION 108 LOAN GUARANTEE
CONTRACT, NOTE, AND RELATED DOCUMENTS CONTAINING
THAT PLEDGE
WHEREAS, The City of Redding City Council, by Resolution No. 2022-085 authorized
the City Manager to execute all necessary documents or contracts as might be required by the
U.S. Department of Housing and Urban Development (“HUD”) as support of a loan in the
amount of an application for a $3,737,000 Section 108 Loan Guarantee for Block 7 Infrastructure
Project and Downtown Facade Improvement Program; and
WHEREAS, the Block 7 Infrastructure project used American Rescue Plan Act (ARPA)
funds instead of Section 108 Loan Guarantee funds as previously contemplated under Resolution
No. 2022-085; and the South City Park Renovation project will now use the Section 108 Loan
Guarantee proceeds, with an adjusted amount of $2,458,000, for the South City Park Renovation
project; and
WHEREAS, said resolution is hereby incorporated herein by reference; and
WHEREAS, California Government Code sections 37103 and 53060 authorize cities to
enter into agreements, including loan agreements, with the United States or any agency or
department thereof for any lawful public purpose; and
WHEREAS, City of Redding has successfully obtained a commitment in the amount of
$2,458,000 from HUD for the Loan Guarantee; and
WHEREAS, HUD’s guarantee of the Note will be governed by a Contract for Loan
Guarantee Assistance under Section 108 between the City and HUD (the “C ontract”), in which
this Resolution is incorporated herein by reference, and in which the City pledges Community
Development Block Grants pursuant to 24 CFR 570.705(b)(2) and City of Redding’ General
Fund for the repayment thereof:
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Redding
as follows:
Section 1. The City Council hereby authorizes and directs the City Manager to execute
any and all documents necessary to accept the loan guarantee referenced above and any
subsequent notes.
Section 2. The Note constitutes a general indebtedness of the City and is payable from
any money as is lawfully available and authorized or pledged by the City for the payment of
principal of and interest on the Note, including but not limited to CDBG block grant funds
pledged by the Borrower pursuant to 24 CFR 570.705(b)(2). For as long as the Note is
outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the
constitutional and statutory limitations provided by law without the assent of the voters, make
the prompt payment of principal and interest on the Note as the same shall become due. The
obligation of the City as Borrower to make payments under the Contract shall be payable first
from CDBG block grant funds pledged by the Borrower pursuant to 24 CFR 570.705(b)(2).
Section 3. The City Council hereby irrevocably pledges CDBG block grant funds
pledged by the Borrower pursuant to 24 CFR 570.705(b)(2) and the General Fund in support of
all obligations of the City as Borrower under any notes executed by the City, up to the amount of
HUD’s commitment for Section 108 Loan Guarantee Assistance, evidencing the Section 108
guaranteed loan for the City’s South City Park Redevelopment Plan pursuant to paragraph 15 of
the related Contract for Section 108 Loan Guarantee Assistance between the City and HUD. This
pledge shall be enforceable in mandamus against the City.
Section 4. The provisions of this resolution are declared to be separate and severable. If a
court of competent jurisdiction, all appeals having been exhausted or all appeal periods having
run, finds any provision of this resolution to be invalid or unenforceable as to any person or
circumstance, such offending provision shall, if feasible, be deemed to be modified to be within
the limits of enforceability or validity. However, if the offending provision cannot be so
modified, it shall be null and void with respect to the particular person or circumstance, and all
other provisions of this resolution in all other respects, and the offending provision with respect
to all other persons and all other circumstances, shall remain valid and enforceable.
I HEREBY CERTIFY that the foregoing resolution was introduced at a regular meeting
of the City Council of the City of Redding on the 7th day of November, 2023, and was duly
adopted at said meeting by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
MICHAEL DACQUISTO, Mayor
ATTEST: FORM APPROVED:
___________________________________
SHARLENE TIPTON, City Clerk BARRY E. DeWALT, City Attorney
RESOLUTION NO. 2023-____
A RESOLUTION OF THE CITY OF REDDING APPROVING AND ADOPTING THE
19TH AMENDMENT TO CITY BUDGET RESOLUTION NO. 2023-060
APPROPRIATING $2,698,000 FOR THE REVISED SECTION 108 FUNDING OF THE
SOUTH CITY PARK PROJECT AND ESTABLISHNG A SECTION 108 PAYMENT
GUARANTEE FOR FISCAL YEAR 2023-2024
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDDING
THAT Budget Resolution No. 2023-060 be and is hereby amended as follows:
FUND DIVISION DESCRIPTION INCREASE DECREASE
191
101
9161
1091
Community Development Block
Grant
General Fund Debt Service
$2,458,000
$240,000
THAT account titles and numbers requiring adjustments by this Resolution are as follows:
USE SOURCE
OF FUNDS OF FUNDS
Decrease (Increase) Fund Balance
191-9161-3742001-00000 Loan Proceeds 2,458,000$
101-1091-2910000-00000 Fund Balance 240,000$
Increase Expenditures
191-9161-6001304-00000 South City Park-Sec. 108 2,407,730$
191-9161-5087502-00000 Loan Fees 50,270$
101-1091-9000901-00000 Section 108 loan guarantee 240,000$
THAT the purpose is to appropriate $2,698,000 for the revised Section 108 Funding of the South
City Park Project and establishing a section 108 payment guarantee for fiscal year 2023-2024.
I HEREBY CERTIFY that the foregoing resolution was introduced at a regular meeting of the City
Council of the City of Redding on the 7th day of November, 2023, and was duly adopted at said
meeting by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
MICHAEL DACQUISTO, Mayor
ATTEST: FORM APPROVAL:
SHARLENE TIPTON, City Clerk BARRY E. DeWALT, City Attorney
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Approve and/or authorize the following actions:
(1) Approve the Second Amendment to the North Block Development Agreement (C-8238)
(Second Amendment) with Block 7 Retail Investors, LLC, for the development of the
Downtown Park Plaza (Plaza Project); and authorize the Mayor to execute the Second
Amendment;
(2) Approve the Park and Recreation Facilities Impact Fee Reimbursement Agreement with
Block 7 Retail Investors, LLC, for the construction of a Downtown Park Plaza; and
authorize the Mayor to execute the Agreement;
(3) Authorize the following actions related to the award of the California Department of
Transportation’s (Caltrans) Clean California Local Grant (CCLG) Program:
a. Accept the award and adopt Resolution for CCLG Program funds in the amount
of $3,889,480;
b. Authorize the City Manager to execute the CCLG Program Restricted Grant
Agreement, any amendments and the associated documentation;
c. Direct the City Manager and the Finance Director to set forth the terms,
conditions and administrative measures to utilize the General Fund as temporary
funding prior to the disbursement of CCLG Program grant funds, in an amount
not-to-exceed $1,000,000;
d. Adopt Resolution approving and adopting the 47th Amendment to City Budget
Resolution No. 2021-078 appropriating the CCLG Program funds;
(4) Adopt Resolution approving and adopting the 51st Amendment to City Budget
Resolution No. 2021-078 appropriating $575,000 of Redding Electric Utility’s Replacing
and Upgrading Underground Conductors and Devices funding; and
(5) Authorize the following actions related to the United States Department of Housing and
Urban Development Community Development Block Grant (CDBG) Section 108 Loan
Guarantee (Section 108) Program:
a. Approve the financing terms and conditions;
MEETING DATE: August 2, 2022
ITEM NO. 9.2(c)
FROM:
***APPROVED BY***
sbade@cityofredding.org
btippin@cityofredding.org
SUBJECT: 9.2(c)--Consider Agreements and adopt four Resolutions for the Block 7 North
Block Development in Downtown Redding.
Steve Bade, Assistant City
Manager
Report to Redding City Council July 27, 2022
Re: 9.2(c)--Approve Agreements & Authorize Resolutions for North Block Development Page 2
b. Adopt Resolution approving the CDBG application in the amount of $3,737,000;
and
c. Authorize the City Manager to execute any documents necessary to complete the
Section 108 Program loan process and appropriate funds upon approval of the
loan.
Fiscal Impact
In March 2022, the City of Redding (City) and The McConnell Foundation were awarded
$3,889,480 from the Caltrans CCLG Program. These funds, combined with the City’s Park and
Recreation Facilities Impact Fee reimbursements, will finance the design and development of the
Plaza Project. To facilitate the CCLG Program funds, Housing Division staff would utilize
General Fund cash for a 45- to 60-day period, as Caltrans processes the CCLG Program
reimbursement to the City. As proposed, the City Manager and the Finance Director would set
forth the borrowing limits, not to exceed $1,000,000, and the associated terms and conditions.
Future maintenance of the Plaza Project is anticipated to be funded through the potential
downtown property-based improvement district or a landscape maintenance district as provided
within the Park and Recreation Facilities Impact Fee Reimbursement Agreement. The final
maintenance funding mechanism will be brought to the City Council at a future meeting.
Redding Electric Utility’s (REU) Replacing and Upgrading Underground Conductors and
Devices (RUUCD) funding is derived from REU’s capital improvement budget and is earmarked
for the development of infrastructure within the City and is anticipated to assist Block 7
infrastructure costs in the amount of $575,000. Allocation of these funds to the Block 7
Development will not impact the General Fund.
The Section 108 Program Loan payment is estimated to be $186,850 per year for a 20-year term.
Each year, the payment will be considered a project and included in the CDBG Annual Action
Plan. Payment of the Section 108 Loan will decrease the amount of CDBG funds available to
other public infrastructure projects. As proposed for collateral, the City would pledge General
Fund revenues as security for the loan; however, this risk is low, as the City has been an
entitlement jurisdiction receiving annual CDBG funding allocations for more than 40 years; in
this period of time, federal administrations have threatened to discontinue the CDBG program,
but it has never come to fruition.
Alternative Action
The City Council (Council) could reject or seek modifications to the Second Amendment
language; choose not to accept the Caltrans CCLG Program funds; not amend the City’s budget
for the appropriation of CCLG or REU funds to the Project; nor approve the Section 108
Program Loan. Any of these actions could put the Block 7 North Block or Plaza Project in
jeopardy of completion.
Background/Analysis
In September 2019, the Council approved the North Block Parking Project that included
authorization for the City Manager to negotiate a non-binding Memorandum of Understanding
with the Shasta-Tehama-Trinity Joint Community College District (District) and the City for the
transfer of a portion of property located at 1400 Market Street. Subsequently, in June 2022,
Council approved a Park Dedication and Easement Agreement that deeds the property to the City
Report to Redding City Council July 27, 2022
Re: 9.2(c)--Approve Agreements & Authorize Resolutions for North Block Development Page 3
for purposes of developing a public park. The property transaction is currently in escrow and
will be completed by mid-August 2022. The Plaza Project site is detailed in Exhibit B of the
Second Amendment to the North Block Development Agreement (North Block DA).
To facilitate the development of the Plaza Project, staff is seeking approval of the Second
Amendment to the North Block DA, the Park and Recreation Facilities Impact Fee
Reimbursement Agreement and accepting the award of CCLG Program funds which are detailed
further in Sections I and II below.
I. North Block DA Amendment
Pursuant to the Second Amendment to the North Block DA, the scope of work is modified to
include the construction of the Plaza Project that will be developed by the Block 7 Retail
Investors, LLC. The expanded scope includes architectural design services, permits,
improvements and development administration for the Plaza Project. In exchange for the
expanded scope of work, the Block 7 Retail Investors, LLC, after showing proof of payment for
eligible park development related expenses, will receive credit for its associated Block 7 park
impact fee obligations as further defined in the Park and Recreation Facilities Impact Fee
Reimbursement Agreement.
The estimated total cost of the Plaza Project is $4,725,935. The Plaza Project improvements will
be funded by the CCLG Program funds and Park and Recreation Facilities impact fees. In
March 2022, the City and The McConnell Foundation were awarded $3,889,480 from the CCLG
Program. The CCLG Program is a competitive program created to beautify and clean up local
streets and roads, tribal lands, parks, pathways, transit centers, and other public spaces. In order
to utilize the CCLG Program funds, the Council must formally accept the CCLG Program grant,
and approve a resolution amending the City’s budget to accommodate the additional Plaza
Project funds. The grant agreement and approving resolution are attached.
II. Park and Recreation Facilities Impact Fee Reimbursement Agreement
The Park and Recreation Facilities Impact Fee Reimbursement Agreement provides up to seven
hundred and eighty thousand dollars ($780,000) in reimbursement for eligible park development
expenses, the estimated amount of park fees paid by the Block 7 and Market Center projects.
The agreement requires City approvals for final design, award of the construction contract and
construction inspection. The Community Services Advisory Commission has reviewed the
proposal and supports the project and the funding agreement.
III. Block 7 Project Infrastructure
REU RUUCD
The North Block DA provided the typical scope of work for the development, construction, and
management of the parking project and the Commercial, Retail, and Market-Rate Housing
Project. With similar types of projects, Redding Electric Utility (REU) will have a developer
perform work that REU would traditionally complete in order to maintain continuity of the
infrastructure. REU will then reimburse these costs to the developer, including REU’s
proportional share of overhead costs. After assessing the value of these costs, REU’s portion of
development for the Block 7 North Block, Mid-Block and South Block, amount to a calculated
reimbursement due to the developer of $575,000. In support of this process, a budget resolution
Report to Redding City Council July 27, 2022
Re: 9.2(c)--Approve Agreements & Authorize Resolutions for North Block Development Page 4
must be executed to infuse the REU RUUCD funds into the City’s budget to reimburse the
developer for its REU-related expenditures for the Block 7 infrastructure projects.
Section 108
In September 2019, as part of the North Block DA approval, staff was authorized to apply for a
Section 108 Program Loan in the amount of $3,500,000. The Section 108 Program provides
CDBG recipients with the ability to leverage their annual grant allocation to access low -cost
flexible financing for economic development, housing, public facility, and infrastructure
projects. The Section 108 Program Loan funds are borrowed by the City and repaid by the City
through pledging current or future CDBG allocations over a 20-year term.
In early 2022, the Section 108 Loan Application was submitted to HUD and underwent an initial
underwriting review. As proposed in the Section 108 Loan Application, $2,800,000 would be
utilized to fund Block 7 infrastructure costs associated with California Street, California
Alleyway, and both Butte and Yuba Streets. The remaining $700,000 would be allocated toward
a Façade Program to assist Downtown businesses with façade improvements. The Façade
Program policy will be brought back to Council for consideration following HUDs approval of
the Section 108 Loan.
Through HUDs review process, it was determined that the utilization of future CDBG allocations
to repay the loan was acceptable but HUD also recommended utilizing General Fund revenue as
additional collateral for the loan. The pledging of these funds is not an obligation that would
require any set aside into a separate account. HUD only wishes to be assured that there is
sufficient revenue held by the City to cover CDBG Section 108 loan payments should the CDBG
revenue stream cease to exist. The value of General Fund collateral would equal the value of
loan payments for one year with a replenishment provision (or $186,850). HUD is the guarantor
of the loan.
The total Section 108 Loan amount, including loan costs, is estimated to be $3,737,000 with an
estimated annual principal payment $186,850 for a 20-year term. Interim borrowed funds will
require quarterly interest payments. The interim interest rate is calculated based on the
Treasury’s three-month auction rate plus 35 basis points or, presently, an estimated 2.91 percent.
Once the loan is converted to permanent financing, the rate would be based on the 10-year
Treasury rate plus 55 basis points. Each time funds are drawn from the line of credit, there is a
two-percent fee plus a $70 charge per transaction.
As part of the Section 108 Loan application process, the Council must review and approve the
amended application and the associated Resolution. If the Section 108 Loan is approved by
Council, staff will send both the updated Section 108 Loan Application (July 2022 version) and
Resolution to HUD. HUD will review the documents, send them to its loan committee to
confirm the funding commitment and interest rate calculations. Once approved, HUD will
forward the Section 108 Loan Agreement back to the City for City Manager signature.
Council Priority/City Manager Goals
• Economic Development – “Facilitate and become a catalyst for economic development
in Redding to create jobs, retain current businesses and attract new ones, and encourage
investment in the community.”
Report to Redding City Council July 27, 2022
Re: 9.2(c)--Approve Agreements & Authorize Resolutions for North Block Development Page 5
Attachments
^Resolution - CCLG program funds
^Resolution - Clean California Grant Program
^Resolution - REU Fund Appropriation
^Resolution - CDBG Section 108
108 Application July 2022
Clean California Local Grant Program (State) Agreement
Second Amendment to Block 7 North Block Development Agreement
Park and Recreation Facilities Impact Fee Reimbursement Agreement
Previous Staff Report - June 7, 2022, item no. 4.2(b)-Shasta College Park Dedication and
Easement (Downtown)
Previous Staff Report- September 30, 2019, item no. 9.4(c)-Block 7 and North Block DA
Parking and Affordable Housing
CITY OF REDDING
REPORT TO THE CITY COUNCIL
Recommendation
Authorize and approve the following actions relative to grant funding for the South City Park
and Block 7 Project infrastructure projects:
(1) Authorize the following actions related to the United States Department of Housing and
Urban Development Community Development Block Grant (CDBG) Section 108 Loan
Guarantee Program (Section 108 Program):
a. Adopt Resolution approving the CDBG Section 108 Program application in the
amount of $3,737,000;
b. Authorize the City Manager to re-appropriate funding upon approval of CDBG
Section 108 Program application for design and improvements at South City Park;
c. Authorize the City Manager to execute any documents necessary to modify the
Section 108 Program application and facilitate the funding changes; and
(2) Authorize the following actions related to the American Rescue Plan Act (ARPA)
funding:
a. Adopt Resolution approving and adopting the 70th Amendment to City Budget
Resolution No. 2021-078 decreasing existing allocations for South City Park by
$2,407,730 and appropriating $2,407,730 in ARPA funding to Block 7 project
infrastructure; and
b. Authorize the City Manager to execute any documents necessary to facilitate the
funding changes.
Fiscal Impact
Should the City Council (Council) approve this item, it will switch funding sources between the
Block 7 and South City Park Projects. As these are two grant-funded projects, there is no impact
to the General Fund.
MEETING DATE: November 1, 2022
ITEM NO. 4.6(c)
FROM:
***APPROVED BY***
kniemer@cityofredding.org
btippin@cityofredding.org
SUBJECT: 4.6(c)--Approve Funding Changes for South City Park and Block 7 Projects
Kim Niemer, Community
Services Director
Report to Redding City Council October 26, 2022
Re: 4.6(c)--Approve Funding Changes for South City Park and Block 7 Projects Page 2
Alternative Action
The Council could decline to reallocate or switch funding sources for the Block 7 and South City
Park projects. This action will limit opportunities for staff to obtain supplemental grant funding
for South City Park.
Background/Analysis
South City Park, Redding’s oldest park, is nearly 100 years old and is uniquely poised to serve
the community. It has, within its boundaries, a baseball field, bocce ball courts, tennis courts, a
basketball court, walkways, and open grassy areas for picnicking, sitting, and other informal
uses. In recent years, community utilization decreased in the park and South City Park needed
revitalization to return to its original vibrancy.
On November 16, 2021, staff presented a proposal to the Council, recommended by the
Community Services Advisory Commission (CSAC), to conduct a broad community
engagement effort regarding the future of South City Park. Following the community
engagement, on March 15, 2022, the Council opted to allocate Coronavirus State and Local
Fiscal Recover Funds, also known as SLFRF and American Rescue Plan Act (ARPA), toward
the revitalization efforts of South City Park. Staff retained the services of Project for Public
Spaces (PPS), a multi-disciplinary firm that has facilitated many public placemaking community
engagement efforts, published multiple studies and reports on the subject, and assisted
communities in reactivating neglected public spaces.
At the June 16, 2022, meeting, the Council approved a concept to reimagine South City Park and
authorized staff to refine the concept, develop a program, and estimate project costs with PPS .
Construction costs will exceed the $2.5 million ARPA allocation. Staff discovered, while
investigating other grant funding opportunities to address the funding gap, that some available
grant programs do not accept ARPA funds as a match funding source. CDBG funding, however,
is an eligible source of match for most federal programs. By reallocating previously authorized
CDBG Section 108 Program funds for South City Park, rather than ARPA funding, staff may
seek out and apply for grant opportunities to fully fund the South City Park improvements.
The CDBG Section 108 Program provides communities with a source of financing for economic
development, housing rehabilitation, and public facilities. The Section 108 Program loan funds
are borrowed and subsequently repaid by the City through its current and future CDBG
allocations over a 20-year term. The current loan application specified infrastructure
improvements on the Block 7 project. Necessary Block 7 project improvements include water,
wastewater, storm drains, and underground utility infrastructure to support income-eligible
housing, all of which are approved uses for ARPA funding. Staff proposes to move the Block 7
improvements to the ARPA program and the South City Park improvements to the CDBG
Section 108 Program. The change in allocations will unlock more funding opportunities for
South City Park. Staff will return to the Council to obtain authority to apply for grants as needed.
Environmental Review
This action is not a project as defined under the California Environmental Quality Act (CEQA),
and no further action is required. Environmental studies are in progress for South City Park, and
a CEQA/NEPA determination will be made prior to construction.
Report to Redding City Council October 26, 2022
Re: 4.6(c)--Approve Funding Changes for South City Park and Block 7 Projects Page 3
For Block 7, on November 10, 2017, after the Planning Commission held a public hearing, it
approved Use Permit UP-2017-01322, and a CEQA Notice of Exemption was filed on November
22, 2017. The NEPA Authority to Use Grant Funding document was executed by the U.S.
Department of Housing and Urban Development on August 19, 2019.
Council Priority/City Manager Goals
• Public Safety – “Work to improve all aspects of public safety to help people feel secure
and safe where they live, work, and play in the City of Redding.”
• Communication and Transparency – “Improve the quality of communication with the
public and City employees to enhance knowledge and increase transparency to improve
public trust.”
• Government of the 21st Century – “Be relevant and proactive to the opportunities and
challenges of today’s residents and workforce. Anticipate the future to make better
decisions today.”
Attachments
^Resolution
^Resolution - Budget
Sep 26_2019_Staff Report
Mar 15_2022_9.10(b) Staff Report
June 16_2022_9.6(a) Staff Report
Aug 2_2022_Resolution
Aug 2_2022_Staff report