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Soledad council leans toward hybrid split for $500,000 in CDBG program income
Summary
After debate, council signaled direction to staff to seek state approval to designate up to $500,000 in CDBG program income across small-business loans, community center repairs and a new homebuyer assistance program — with a recommended split of $100,000 for business loans, $150,000 for emergency community-center HVAC work and $250,000 to start a homebuyer assistance program.
Tanya Vargas, economic development coordinator, and Beatriz Rubio presented options for allocating approximately $500,000 in Community Development Block Grant (CDBG) program income. Vargas explained that program income results from repayments on prior CDBG loans and must be allocated to eligible activities under federal rules; staff outlined four options: (1) amend the active business assistance loan agreement to use program income there; (2) submit a program-income-only application to fund a homebuyer assistance program; (3) fund public-facility improvements (notably community-center completion); or (4) a hybrid approach dividing funds across activities.
Economic-development consultant Angel Johnstone told the council that the city had previously planned to use the $500,000 for business loans (estimating it could fund roughly six businesses and about a dozen jobs). Councilmembers weighed that economic argument against the immediate needs at the community center (including HVAC repairs) and the council—s prior decision to prioritize a homebuyer assistance program in the housing element. Staff clarified that the city has guidelines for a homebuyer assistance program but no active application intake yet.
Mayor Ana Velasquez proposed a recommended hybrid designation to be submitted to the state: $100,000 for the business-loan program, $150,000 for urgent community-center repairs (staff estimated HVAC repairs at roughly $150,000–$180,000), and $250,000 to begin a homebuyer assistance program. Several councilmembers expressed support for the split while asking staff to confirm exact available program-income totals and to return with a formal resolution and implementation steps.
Why this matters: Program income can be re-used for local priorities but is limited and periodically replenished by loan repayments. The council must choose between investing in small-business lending that supports jobs and immediate capital needs for public facilities or starting a new housing assistance program aligned with local housing goals.
Next steps: Staff will return with precise accounting of existing CDBG and program-income balances, a draft application package reflecting the hybrid split if the council confirms, and a formal resolution for council adoption.
