Humboldt County’s Headwaters Fund continues to perform below expectations but deeper analysis of the fund’s rules has led to the reinstatement of community development grants and loans.
At its March 1 meeting, the Board of Supervisors heard the Headwaters Fund annual report and lifted a moratorium on lending and spending from the fund’s Community Investment Fund (CIF), which supports infrastructure and other public service projects.
A staff report concludes that the fund’s manual defines the CIF as a fund that can be spent down from its $5 million original amount. That led supervisors to lift the hold on CIF grants and loans, opening up millions of dollars for projects.
Prior to the moratorium, a $200,000 CIF grant was awarded to the county’s Harbor District for a Humboldt Bay mariculture pre-permitting program, which streamlines permit approvals for new and expanded oyster farming operations.
Adam Wagschal, the district’s deputy director, said an Environmental Impact Report (EIR) has been certified for the program and its implementation in sub-tidal areas is set for this summer. Implementation of a second, inter-tidal phase is due for 2017.
Wagschal said the new operations facilitated through implementation of this summer’s sub-tidal phase would generate 50 new jobs and the second inter-tidal mariculture expansion phase will yield about 70 new jobs.
The Headwaters Fund was established in 2002 with a balance of $18.4 million. The balance now stands at $16.6 million, slightly above the previous fiscal year and above the minimum floor of $16.2 million that supervisors set in 2014.
The fund also includes small grant and revolving loan fund programs that promote new business development and improvement of existing businesses that can’t get conventional bank loans.
Headwaters loans are leveraged and built upon by the fund’s lending partners. Greg Seiler, chair of the Headwaters Fund Board, described the restoration of the Carson Block Building in Old Town Eureka as an example of how Headwaters loan funding is part of a team effort with the Arcata Economic Development Corporation, the Humboldt Area Foundation and the Redwood Region Economic Development Commission.
The Headwaters loan was for $375,000, Seiler said, but with the collaboration from other lending agencies, a total loan of $1.5 million was made.
Seiler also outlined the Headwaters Fund’s performance to date. He said that since the fund’s inception, $6 million in grants have been awarded, leveraging $42 million of project investments. Lending from the fund has amounted to $15.5 million, leveraging over $30 million in loans.
Seiler added that the fund has assisted more than 400 businesses and created or retained between 700 and 1,000 local jobs.
Though grant-making and lending from the CIF is reinstated, Supervisor Rex Bohn said the fund’s spending can be reserved for high-value projects.
“We don’t have to spend the money,” he continued. “But if something shows up that is a home run … the opportunity is there.”
Supervisors also voted to have staff develop a methodology and strategy for spending CIF funds.