Title
Staff Recommendation: Reallocation of 2015 CDBG Job Creation Funds
Staff Summary
• Job creation was introduced as a new Community Development goal in the 2015-2019 Consolidated Plan. Since the target funding amount for Goal #9 (Create Low/Mod Income Jobs) is limited and the applicant pool for this new goal has been small (due to low stakeholder awareness), the Public Improvements Advisory & Recommendation Committee (ARC) has for the first two years (2015 & 2016) recommended different pilot funding initiatives ranging from manufacturing hiring incentives to small business loans to façade rehabilitation.
• The 2015 CDBG investment of $118,200 in Job Creation was intended to create new manufacturing jobs by offering employers hiring incentives to do “On the Job Training” through Lake County Workforce Development. When reviewing planned 2015 CDBG activities, however, the U.S. Department of Housing & Urban Development (HUD) clarified that salaries are not an eligible use of CDBG economic development dollars. This grant must be reallocated by future amendment to the 2015 Action Plan. A public hearing for a proposed 2015 Action Plan Amendment is planned at 3:30pm at the January 17 meeting of the Housing & Community Development Commission. If it prefers, the HCDC can opt to delay reallocation until the 2018 application round.
• It is preferable to reallocate 2015 dollars to projects with immediate needs rather than waiting for the 2018 application round. Staff proposes reallocation of 2015 CDBG job creation dollars to the Black Chamber of Commerce of Lake County for additional small business loans. This is a proposed budget increase from $69,741 in 2016 CDBG funds to $187,941 (in combined 2015-16 funds) to be invested in small business loans over three years. At a rate of four new loans per year, the Black Chamber of Commerce could expand on its initial success of four loans in 2017 with an additional four loans in each 2018 and 2019.