GUSTINE - The city will pursue the use of federal block grant funds to help a medical provider establish an urgent care in Gustine.

Community Health Centers of America has requested a $200,000 loan from the city to help establish an urgent care center in the former Horisons Unlimited building. That property is owned by RAN Health Services, which operates a Gustine clinic.

City Manager Doug Dunford previously told Mattos Newspapers that the loan would technically be extended to RAN Health Services. That organization was extended a $60,000 loan using block grant funds in 2012 to help establish its clinic, Dunford noted, and has since repaid those funds.

The latest loan was requested by Naresh Channaveerappa, chief financial officer for RAN Health and Community Health Centers. He offered to personally guarantee the financing if need be, or to put dental equipment up for collateral.

The possibility of using federal community development block grant money rather than local funds for a loan surfaced during initial discussions, and in mid-May council members and staff indicated that the option appears feasible.

Mayor Pat Nagy said local representatives met with Housing and Urban Development staff members while in Washington, D.C., to broach the subject of using its CDBG funds for the urgent care loan and received a positive response.

“They seemed to think it was very doable,” Nagy stated.

“When he pays it back, that is CDBG money that we would still have and could use in our community,”  Nagy continued. “It takes us off the hook. We have no real liability if he doesn’t pay. It is the federal government that goes after him, not us.”

“It is not coming from the city but the federal government. If something should happen and they were not able to pay it, they would be responsible to the federal government. It would protect the city better,” Dunford concurred.

But, council member Craig Turner pointed out, if for some reason the loan was not repaid the city would have lost funding it could have used for other purposes.

“Even though it isn’t our a sense it is,” said Turner, who called for collateral to be required even on the federal funds. “It is our money to use. If it doesn’t get paid back, we don’t have the money to use.”

Nagy and Mayor Pro Tem Joe Oliveira each noted that the group seeking the loan has a proven track record of paying the city back its funds.

The council ultimately directed staff to move forward with the detailed process of seeking approval to use the grant funds for urgent care loan and to require collateral as well.

“We will have to go through a process to make it available,” Dunford cautioned. “It not going to happen in 30 days.

If the city gains approval to use its community development block grant funds, staff will present a completed loan package to the City Council for final approval.

The loan can be used for improvements needed to establish the clinic but not operational expenses, Dunford noted.

City officials had discussed funding the loan from local utility user tax reserves before the possibility of using block grant money was broached.

Council members voiced their support for the urgent care project, saying it would help fill a need in the community.

No other urgent care clinics or hospitals are immediately available, Nagy noted.

“Doing this makes sense,” the mayor stated.

“It is something the town can really use,” added Oliveira.