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HomeMy WebLinkAboutMINUTES - 04052005 - SD.5 Contra TO: BOARD OF SUPERVISORS :•' -•,, FROM: JOHN SWEETEN, County Administrator Costa - o. DATE: MARCH 15, 2005 sr -- Count '4 C U SUBJECT: "KEYS"AUTO LOAN PROGRAM SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDED ACTION: APPROVE and AUTHORIZE the General Services Director and the Employment and Human Services Director to execute an interdepartmental agreement defining the General Services Department's participation in the KEYS (Keeping Employment Equals Your Success) Auto Loan Program administered by the Employment and Human Services Department. FISCAL IMPACT: Currently, user departments turn in approximately 70 vehicles for surplus each year and these surplus vehicles are sold wholesale at auction. Under this proposal, the General Services Department (GSD) would allow a nonprofit agency selected by the Employment and Human Services Department (EHSD) to purchase up to 40 surplus vehicles each year to be used strictly in the KEYS program at an established price greater than what the County receives for these vehicles at the wholesale Auction. CONTINUED ON ATTACHMENT: [-] YES SIGNATURE: (a- aRECOMMENDATION OF COUNTY ADMINISTRATOR D RECOMME ATION OF BOARD COMMITTEE [APPROVE TOTHER SIGNATURE(S): ACTION OF BO ON /001.0A APPROVED AS RECOMMENDED OTHER ❑ VOTE OF SUPERVISORS: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND UNANIMOUS(ABSENT ENTERED ON THE MINUTES OF THE BOARD OF AYES: NOES: SUPERVISORS ON THE DATE SHOWN. ABSENT: ABSTAIN: ATTESTED: APRIL 5,2005 Contact: MICHAEL LANGO(925)313-7120 JOHN SWEETEN,CLERK OF THE BOARD OF cc: PAUL BRANSON,EHSD WDB TRANS COORD SUPERVISORS ND COUNTY ADMINISTRATOR DOROTHY SANSOE,CAO SENIOR DEPUTY LARA DeLANEY,CAO MGMT ANALYST By: eputy KEYS Auto Loan Program March 16, 2005 County Administrator Page 2 For example, in Fiscal Year 2003/04, the average sale price, less commission, for a sedan sold at auction was $1,184. Under this proposal, GSD would establish for each surplus County vehicle a price of$1,500, which would cover the GSD Fleet Management costs associated with inspecting and preparing the vehicle for EHSD. GSD participation would not negatively impact the County's vehicle replacement fund nor would the County assume any additional financial risk through this proposal. BACKGROUND: In September 2002, the Board of Supervisors authorized EHSD to accept Metropolitan Transportation Commission grant funds to fund the KEYS Auto Loan Program. EHSD developed the KEYS program in response to the needs of County CaIWORKs participants for flexible solutions to their employment transportation problems. This program and similar programs nationwide are designed to provide low-interest auto loans to employed CalWORKs participants and those receiving post-aid retention services who have demonstrated the need for a personal vehicle as their only practical means of transportation to work or training and who would otherwise not be able to obtain' an auto loan. EHSD has found that most employed CaIWORKs participants have sufficient disposable monthly income to afford small car payments, but their primary barriers are a poor credit history and the lack of funds to make a down payment. The KEYS Auto Loan Program enables loan recipients to obtain car loans and the benefits of car ownership, including the ability to rebuild their credit by making regular monthly payments. The maximum loan amount for CaIWORKs participants is $4,000. If the CaIWORKs participant's loan package is approved, EHSD assists each applicant with locating a vehicle to purchase. Currently, the CaIWORKs participants utilize local car dealerships to find a car of their choice, which then must pass an inspection and a diagnostic test. The KEYS program is funded by a reserve fund consisting of 50% from CalWORKs funds and 50% by a Low Income Flexible Transportation Grant. In April 2003, the Board of Supervisors authorized EHSD to establish this fund as an interest-bearing account with the Contra Costa Federal Credit Union. The fund serves to back the loans in the event of default. By transferring the risk of default to the fund, the program can offer much lower interest rates than the loan recipient would be able to obtain outside this program. GSD and EHS are interested in entering into an interdepartmental agreement (similar to other agencies) in which GSD can sell surplus County vehicles to a nonprofit agency and the nonprofit agency will, through a contractual agreement with EHSD, make these vehicles available to EHSD for the KEYS Auto Loan Program. A CaIWORKs recipient approved for the KEYS Auto Loan Program would have the option of purchasing a vehicle from a local car dealership or purchasing County-supplied surplus vehicle from the nonprofit agency at a below-market price. EHSD would continue to be responsible for administration of the KEYS Auto Loan program. The General Services Department's only role would be to provide a source of well-maintained surplus County vehicles for possible purchase by program participants under the KEYS Auto Loan Program.