Transferring $310,000 among Accounts within the Division of Community Development

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„mom®m®sq®” °� UTIi'4�: t� • DFV Vogl ® �,�; �..x; e CITY of SOUTH BEND Q p Iss §' �:® ROGER O. PARENT, Mayor O �r ia► ® Ply A44 4• . *4 COUNTY-CITY BUILDING • SOUTH BEND,INDIANA 46601 •\ ®-, �Y866l g. ® • ■ DIVISION OF COMMUNITY DEVELOPMENT Colleen Rosenfeld 1200 County City Buildlng Director South Bend, Indiana 46601 (219)284-9335 March 5, 1985 South Bend Common Council 4th Floor, County-City Bldg. South Bend, IN 46601 Dear Council Member: The bill submitted for your consideration proposes the transfer of funds for three projects. The Economic Development Capital Fund project at $250,000 consists of $100,000 from 1984 General Street Improvements and $150,000 fran 1985 Unspecified Local Option. The project involves a loan from a Small Business Investment Company (SBIC) to an existing business in the Studebaker Corridor, an area located in South Bend's Urban Enterprise Zone. The $250,000 would be channeled through the Urban Enterprise Association to the SBIC and combined with $250,000 from the State and $1.5 million in private investment to assist in the continued operation of the company. The business currently employs approximately 120 people which could increase significantly when a new product recently unveiled by the company is fully marketed. The general street improvement funds remain available from the 1984 program year which ended 12/31/84. It has became a recent practice to transfer previous program year funds to the current year. The 1985 Unspecified Local Option amount has increased at this time from what was reflected in the 1985 application due to two factors: (1) the Section 108 repayment was projected in the 1985 application at a higher amount than was actually required and (2) the 1985 CDBG Entitlement amount will be higher than anticipated when the 1985 application was submitted. The Neighborhood Clean-Up Crew increase of $30,000 is a direct result of the proposed Project Future funding level of the same amount. The recent changes to the CDBG Regulations strictly limit the percentage that can be spent on administrative activities and the direct and immediate results of those activities. The Project Future activity has always been calculated as an administrative expense while some of their specific activities may not result in projects in the years for which administrative costs are incurred. What we face in funding Project Future with CMG funds is an additional limitation on administrative funds and difficulty in documentation for reporting purposes. The proposal is to offset costs in the Neighborhood Clean-Up Crew activity while the Civil City provides funding for Project Future. The Controller's office has agreed to this approach.