MOU in Support of Dupaco Financial Assistance Application for CHANGE Program Copyrighted
March 19, 2018
City of Dubuque Action Items # 7.
ITEM TITLE: Memorandum of Understanding in Support of Dupaco
Community Credit Union Community Development
Financial Institution Financial Assistance Application in
Support of the City of Dubuque Comprehensive Housing
Activities for Neighborhood Growth & Enrichment
(CHANGE) Healthy Homes Advocate Program
SUMMARY: City Manager recommending approval of a Memorandum of
Understanding in Support of Dupaco Community Credit
Union Community Development Financial Institution
Financial Assistance Application in Support of the City of
Dubuque Comprehensive Housing Activities for
Neighborhood Growth & Enrichment(CHANGE) Healthy
Homes Advocate Program.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve
ATTACHMENTS:
Description Type
MOU in Support of Dupaco's CDFI Application-NNM City Manager Memo
Memo
Memorandum of Understanding Supporting Documentation
THE CTTY OF Dubuque
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2013 2017
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Memorandum of Understanding in Support of Dupaco Community Credit
Union Community Development Financial Institution Financial Assistance
Application in Support of the City of Dubuque Comprehensive Housing
Activities for Neighborhood Growth & Enrichment (CHANGE) Healthy
Homes Advocate Program
DATE: March 15, 2018
Dupaco's goals follow its objective to provide new products. These new products
support the aim of its business plan to prioritize strategic initiatives outlined in Imagine
Dubuque 2037, a comprehensive plan like no other in the country, shaped by over
12,500 ideas and 6,000 participants and refined with community development
stakeholders. The vetting approach, Inclusive Dubuque, tasked 50 cross sector partners
with ensuring final strategies were informed, equitable and inclusive. Dupaco's role as
the only Community Development Financial Institution is as the primary lending partner
to stakeholders, citizens and businesses.
The new products in "Better Future: Dubuque" increase economic opportunities to help
extremely low-income people break the cycle of generational poverty through access to
technical training; while increasing the skilled workforce essential to maintain
momentum of the city's economic development plans.
Strategy: Remove the primary barrier preventing minimum wage earners from obtaining
the technical skills that lead to higher wages. The primary barrier is basic survival.
Minimum wage earners cannot afford the time to participate in technical programs. The
Community Development Financial Institution is providing its "Living Loan" wage
replacement to supplement income lost when certificate seekers reduce their work
hours or leave the workforce.
Goals of Program
Goal 1. Provide 700 extremely low-income people with the practical means to offset or
replace salaries by deploying $4.9 million in the Community Development Financial
Institution's new Living Loan.
Strategy: Remove the financing barriers created by the exclusion of technical school
programs from student loans and Pell Grants, and exclusionary mainstream lending
policies preventing the use of unsecured loans for educational purposes.
Goal 2. Provide 700 extremely low-income people with $2.1 million in the Community
Development Financial Institution's new deferred payment Technical Skills Loans.
Strategy: Ensure beneficiaries are among the city's most economically distressed
households that couldn't fathom the program's existence.
Goal 3. Obtain program beneficiaries through the city's Healthy Home Advocates which
conduct in-home visits to assist residents with developing Personal Resiliency Plans,
including identifying training opportunities, setting family goals and connecting with
Northeast lowa Community College (NICC) and the Community Development Financial
Institution.
Strategy: Do no harm. Ensure that minimum wage participants aren't burdened with
extra debt without an increase in wages. NICC provides every participant a "Guided
Pathways of Success Coach" to address all challenges including financial,
transportation and childcare that could prevent program completion and job placement.
Goal 4. Achieve a 95°k NICC graduation and job placement rate within one month of
program completion and provide 100°k of participants with Dupaco's Money Makeovers
pre and post-graduation to help with reduced-income budgeting during their training,
and with increased-income budgeting and credit building afterward.
Strategy: Maintain the Community Development Financial Institution's financial health,
ensuring its capacity to continue innovative product development.
Proposed Impact
Dubuque's median hourly earnings per worker of$15.83 is 8.9°k less than the national
median, according to the 2017 Greater Dubuque Regional Skills Gap Analysis
(GDRSGA). IYs not just low nationally, it is the 3rd worst of its peer MSAs in the state.
Working together the City of Dubuque, Dupaco and NICC will increase lifetime earnings
for low income people by 78°k. According to NICC the median wage certificate program
graduates earn in their first year is $26,780. This compares to minimum wage in lowa of
$7.25 or $15,080 a year. Using the base pay from that first year to most conservatively
calculate lifetime earnings, graduates will earn $1 ,071 ,200 with the certificate compared
to $603,200 without. As a result of Dupaco's $10,000 loan for tuition and wages
replacement for the three-month certificate training, beneficiaries will increase lifetime
earnings by $468,000. The return on investment for these low-income people from
Dupaco's $10,000 loan is 4580°k. If looked at like investing in the stock market over the
40-year career the annualized ROA is 10.90°k. This is the power of a Community
Development Financial Institution working in partnership with its city to support a
sophisticated program with NICC.
2
I respectfully recommend Mayor and City Council approval of a Memorandum of
Understanding in Support of Dupaco Community Credit Union Community Development
Financial Institution Financial Assistance Application in Support of the City of Dubuque
Comprehensive Housing Activities for Neighborhood Growth & Enrichment (CHANGE)
Healthy Homes Advocate Program.
1I�.1fL�'G�*'1 Y t+lrt� ,
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Teri Goodmann, Assistant City Manager
Cori Burbach, Assistant City Manager
Alvin Nash, Housing & Community Development Department Direct
Michelle Becwar, Dupaco Community Credit Union
Lead Education Impact Architect
3
Memorandum of Understanding
Dupaco Community Credit Union
3999 Pennsylvania Ave.
Dubuque, IA 52001
ALLIANCE
City of Dubuque C.H.A.N.G.E.
50 W. 13th St.
Dubuque, IA 52001
C.H.A.N.G.E., Comprehensive Housing Activities for Neighborhood Growth & Enrichment
(Partner), is a campaign of neighborhood revitalization and an extension of sustainability to
specifically address marginal properties, affordable housing, and homeownership.
Dupaco Community Credit Union (Credit Union) aims to improve the financial position of
members and build valued relationships by delivering personalized financial advice, products,
and services supporting financial stability and sustainability in the community.
Credit Union is applying for a Community Development Financial Institution (CDFI)
Financial Assistance (FA) Grant and is seeking to bring up to one million dollars into the
community.
COMMUNITY CHALLENGES AND NEEDS
The City of Dubuque has many innovative programs stemming from Sustainable Dubuque which
was launched in 2006 as a holistic approach to address ecological and environmental integrity,
economic prosperity and social/cultural vibrancy. The CHANGE Campaign: Comprehensive
Housing Activities for Neighborhood Growth and Enrichment is the umbrella name for the
Sustainable Dubuque programs. The goal is to make significant change in the community A
signature program within the Change Campaign is Healthy Home Advocates. City staff
(advocates) visit low income households to develop a Personal Resiliency Plan. Advocates help
the people in the household to develop employment and achieve family goals, which includes the
identification of training opportunities and community resources.
PARTNER RELATIONSHIP
Credit Union seeks to broadly expand its work supporting economic growth in Dubuque
by partnering with The Healthy Home Advocates Program and Credit Union will promote
Partner' Home Advocates Program. Credit Unions various staff will identify individuals
and families that can benefit from The Healthy Home Advocates Program and connect
them to Partner's program. Credit Union can provide financial education, products and
services to members and clients, and Partner will provide education, services, and other
activities to improve the lives of people in the community. Credit Union and Partner will
plan on meeting regularly regarding their partnership, facilitated by Credit Union.
TERMS:
1. This MOU does not create any right or benefit, nor does it create any employment
relationship between the parties.
2. No liability will arise or be assumed between the parties as a result of this MOU.
3. This MOU is not a legally binding contract. It is an agreement on the potential scope of
work based on the success of Credit Union's CDFI FA Award Application.
4. This MOU is effective from date signed and valid for the life of shared activities.
Dupaco Community Credit Union City of Dubuque C.H.A.N.G.E.
B
Roy D :uo1, Mayor
March 19, 2018