CC - Item 6B - Rosemead Local Economic Stimulus Plan in Response to Coronavirus (COVID-19) RevisedROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: GLORIA MOLLEDA, CITY MANAGER J, M ,
DATE: May 26, 2020
SUBJECT: ROSEMEAD LOCAL ECONOMIC STIMULUS PLAN IN RESPONSE TO
CORONAVIRUS (COVID-19) REVISED
SUMMARY
On May 12, 2020, the Rosemead City Council, considered implementing a local economic
stimulus plan to serve as a catalyst for the local economy in Rosemead to recover from the
impacts of COVID-19. Presented were several activities for a potential plan. Council directed
staff to return with estimated costs on specific activities and projects primarily focused on capital
improvement and infrastructure to bring construction and quality jobs to the City and further
minimize the impact to Rosemead residents and businesses.
STAFF RECOMMENDATION
Staff recommends that the City Council:
1. Discuss the activities and projects including the use (and purchase) of Rule 20A Funds
for a Local Economic Stimulus Plan submitted as Attachment A;
2. Direct staff to return with a Resolution for reduced business license fees, if appropriate;
and
3. Provide further direction to staff, as necessary.
DISCUSSION
At the May 12, 2020 City Council meeting, Council directed staff to bring back additional
information and costs on the following potential programs and projects.
Low Interest Business Loan Program
When considering a business loan program, there are many factors that the Council will need to
consider such as: Is the City willing to guarantee the loans? What will happen if the loan
becomes delinquent or goes bad? Will the City consider a lien on the property and/or report a
bad loan to credit agencies? How much is the City will to pay for the financial institution to
operate the loan program?
AGENDA ITEM 6.13
City Council Meeting
May 26, 2020
Page 2 of 3
If Council desires a loan program, it is important to note that the financial institution will expect
some form of payment (either through loan fees and/or direct payments from the City) to help
finance the costs associated with the processing and servicing of the loans, as well as the labor
costs of their staff doing the work. Staff estimates that it will take 2-4 months to build a loan
program and almost as many months to find a local financial institution willing to administer the
program. An agreement, acceptable to both the financial institution and the City of Rosemead
would need to be jointly developed that meets each parties' legal obligations and responsibilities
within the program.
Council may consider that a small business loan program through CDBG-CV funds ($200,000)
was recently approved and is currently being developed. This program will be similar to the
cities of El Monte and South Gate Small Business Job Retention and Creation Grant Programs.
Further, at the time this report was written, there is still funding available through the SBA
Payroll Protection Program and, therefore, it may not be necessary to develop a local business
loan program.
Business License Reductions
Council may consider reducing the business license fees for both new and renewal. Council
could choose to apply the reduction to all businesses or may choose to apply to non-essential
businesses which may be more greatly affected by the Safer at Home Order. In calendar year
2019, the new business license fees collected by the City were $65,799 and the renewal fees
totaled $103,983. If Council chooses to reduce the fees by 50%, it would cost the City an
estimated $85,000 of loss revenue.
Rental Mortgage Assistance Program
With many residents being impacted by loss of wages and jobs, it is expected that their loss of
income will negatively impact their ability to pay their rent and mortgage. As part of the CDBG-
CV and HOME funding recently approved by Council, $85,920 have been allocated for
emergency rental and mortgage assistance to Rosemead residents. Council may choose to use
,general fund reserves to augment or match the CDBG-CV/HOME funding for this program.
Unfunded Capital Improvement Projects
Council may choose to fund some or all the unfunded capital improvement projects, see
Attachment A for the list of unfunded projects and the estimated cost.
Rule 20A Funds
Council may choose to purchase Rule 20A credits from other municipalities for the
undergrounding of utilities on portions of Rosemead Blvd., Mission Dr., Temple City Blvd, and
Walnut Grove, see Attachment A for more detail on the identified areas and estimated costs. It
should be noted, that Rule 20A funds generally cost 55 cents to the dollar. As an example, the
City of Oxnard sold their $3.8 million in credits for $2.1 million.
City Council Meeting
May 26, 2020
Page 3 of 3
FISCAL IMPACT
The proposed activities and projects developed for the local economic stimulus plan would
require a total investment of approximately $13,308,000 from the City's General Fund Reserves.
The actual cost may vary depending on negotiations for purchasing Rule 20A credits.
Additionally, $85,000 of the total amount ($13,308,000) would be indirect costs as it would be
revenue that would not be collected due to the business license reductions.
STRATEGIC PLAN IMPACT
The local economic stimulus plan implements the "Key Organizational Goals" of ensuring the
City's continued financial viability by actively pursuing quality economic development; and
enhance public safety and quality of life.
Submitted by:
r 4-A�-104�0
gelica F usto-Lupo
Director of Community Development
Attachment A: Local Economic Stimulus Program Potential Activities and Projects
Attachment A
Local Economic Stimulus Program Potential
Activities and Projects
Rosemead Local Economic Stimulus Plan
Potential Activities and Projects
Business and Resident Assistance
Potential Pro Ject: Business & Resident Assistance
Fundinu Source
t-1
Estimated Cost
1. Low Interest Bank Loan
$55,000
5. Acoustic Panels(Garvey Park Gym)
$25,000 traditional bank loan backed by the Ci
General Fund Reserves
$300,000*
2. Business License Reduction
$286,000
7. Playground Equipment Replacement (Garvey & Rosemead
Parks)
(New and renewal business licenses
Loss to the General Fund
$85,000
3. Rental/Mortgage Assistance Program
$50,000
9. Rosemead Park Restroom Renovation
Match or augment CDBG-CV/HOME funds of $85,920
General Fund Reserves
$86,000
TOTAL
$125,000
$471,000
*Loans would be guaranteed by the City (if delinquent, unpaid, etc.) and other bank fees may apply.
Potential Capital Improvement Projects to Fund
Potential Rule 20A Fund Expenditures
Potential Project: Rule 20A
General Fund Reserves
Estimate([ Cost
Project:Potential
4. New Roof for Rental Shelter(Garvey Park
$55,000
5. Acoustic Panels(Garvey Park Gym)
General Fund Reserves
$50,000
6. New Gazebo & Landscaping RCRC
General Fund Reserves
$286,000
7. Playground Equipment Replacement (Garvey & Rosemead
Parks)
General Fund Reserves
$200,000
8. Resurfacing of Garvey Park Tennis Courts
General Fund Reserves
$50,000
9. Rosemead Park Restroom Renovation
General Fund Reserves
$450,000
10. Rosemead Park Preschool Restrooms
General Fund Reserves
$125,000
11. Scoreboard Replacement at Rosemead Park
General Fund Reserves
$19,000
TOTAL
TOTAL
$1,235,000
Potential Rule 20A Fund Expenditures
Potential Project: Rule 20A
Funding Source
Estimate([ Cost
12. Rosemead Blvd Utility Undergrounding
Rule 20 General Fund
From I-10 Freeway to North City Limit, 1.3 miles
Reserves
$3.4M
13. Mission Dr. Utility Undergrounding
General Fund
From Rosemead Blvd. to Valley Blvd., 0.7 miles
ReservesR
$1.9M
14. Temple City Blvd. Utility Undergrounding
General Fund
From Valley Blvd. to North City Limit, 0.3 miles
ReservesRale 20i
$820,000
15. Walnut Grove Utility Undergrounding
General Fund
From Valley Blvd. to Mission Dr., 1.7 miles
ReservesD• 1e -2 -OA
$4.62M
TOTAL
$10,740,000