HomeMy WebLinkAboutMINUTES - 03282000 - C70 TO: BOARD OF SUPERVISORS �• r /' •, Contra Costa
FROM: Finance Committee
Supervisor Mark De Saulnier, Chair Counly
Supervisor Jae Canciamilla
DATE: March 28 , 2000
SUBJECT: Allocation of FY 1999/00 CDBG Economic Development Assistance Funds
and Execution of Required Legal Documents for the Rubicon Bakery
Project
SPECIFIC REQUEST (S) OR RECOMMENDATIONS (S) &BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
1 . APPROVE the allocation of $80, 000 in FY 1999/00 Community
Development Block Grant Economic Development Assistance Funds
(CDBG/EDRF) to Rubicon Programs, Inc. for the Rubicon Bakery
Project .
2 . AUTHORIZE the Deputy-Director or his designee to execute a CDBG
Project Agreement and required legal documents for this purpose.
FISCAL IMPACT
No General Fund impact . Funds for this project will come from
the FY 1999/00 CDBG/EDAF. CDBG funds are provided to the County
on a formula basis through the U.S. Department of Housing and
Urban Development .
CONTINUED ON ATTACHMENT: XX YES
RECOMMENDATION OF COUNTY ADMINISTRATOR ECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
Signature (s) : Supervisor Mark De Saulnier Supervisor Joe Canciamilla
ACTION OF BOARD ON March 2L 2.000 APPROVED AS RECOMMENDED XX OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A
XX UNANIMOUS (ABSENT - - - _ - ) TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
SUPERVISORS ON THE DATE SHOWN.
Contact : Belinda Smith
3351260
Original : Community Development ATTESTED March 28 , 2000
Cc : CAO PHIL BATCHELOR, CLERK OF
County Counsel THE OARD OF SUPERVISORS
AND Y ADMINISTRATOR
B DEPUTY
BACKGROUND/REASONS FOR RECOMMENDATION
The Economic Development Assistance Fund is used to fund economic
development projects as they develop during the program year.
Including prior year carryover and reallocated funds, the current
balance of the CDBG/EDAF is $547, 593 .
On March 20, 2000 the Finance Committee voted to recommend that the
Board of Supervisors approve an allocation of $80, 000 to Rubicon
Programs, Inc. for the Rubicon Bakery. The purpose of this project
is to increase the production capacity of the Bakery in order to
increase sales and create more jobs for low-and moderate-income
persons .
Rubicon proposes to expand the capacity of its wholesale bakery
through the purchase of equipment, which includes a double rack
oven, oven racks, 80-quart mixer, kettle, pallet racks, etc .
Based on current capacity, Bakery sales will reach $1, 200, 000 this
year and employ 24 people, 80% of those employed are comprised of
formerly homeless, disabled, or low income adults living in West
County. In addition, Rubicon operates a three-month structured on-
site training program that teaches participants employment and
baking fundamentals .
The overall objective of the project is to improve Rubicon Bakery' s
financial performance to 28% profit which will fund the training
program, provide counseling and support services to Rubicon
trainees and staff, and help support other Rubicon Programs .
Rubicon has recently entered into an agreement with Raley' s 130-
store grocery chain to sell Rubicon products . A conservative
estimate of revenue from this account is $800, 000 annually. This
account will create at least eight new jobs . By June 30, 2003
bakery sales are estimated to be $3, 269, 920 with sixty employees of
whom 45 persons will be from the target population.
The Bakery and training program has been in operation since 1993
and distributes its cakes and tarts to 50 premium grocery store
customers, and sells to hotels, restaurants, and caterers . In March
of 1998 Rubicon Bakery acquired and renovated its current facility.
As part of the renovations Rubicon received a CDBG loan of $150, 000
for bakery equipment . The Bakery is located at 154 South. 23rd
Street, in the City of Richmond. Sales at that time were $600, 000
with 18 employees . Based on projected revenues of $1, 200, 000
Rubicon has realized a 100% increase in revenue and a 33% increase
in jobs over a three-year period.
The total cost of the project is $1, 980, 000 . If approved,
CDBG/EDAF funds will be used to purchase equipment for the Bakery,
and will be provided to this project in the form of an interest-
bearing, deferred loan for $80, 000 with $40, 00 forgivable dependent
on training and employment of Urban County residents .
Funding sources include .
CDBG $ 80, 000 Requested
Proj . Independence (HUD) $ 50, 000 Approved
CA Dept . of Rehab $ 50, 000 Approved
Business Revenue $1, 800, 000 On-going
TOTAL $1, 980, 000