SUBJECT/RECOMMENDATION:
Title
Approve Clearwater’s Back to Business Grant and Professional Services Program and adopt Resolution 20-21.
Body
SUMMARY:
The COVID-19 pandemic has been declared a national, state, county, and local State of Emergency. Executive orders by the State and County have ordered the closing of several types of businesses, and others be significantly negatively impacted by CDC guidelines for “social distancing”. The orders further restrict public movement. The pandemic is causing severe economic harm to small businesses.
To aid the city’s hardest hit and most vulnerable small businesses, Economic Development & Housing requests approval of Clearwater’s Back to Business Grant and Professional Services Program (also to be known as Clearwater’s Back to Business Program). The Program supports both “brick & mortar” as well as home-based businesses and is more fully described in Exhibit A of Resolution 20-21.
Brick & Mortar Businesses
For qualifying businesses occupying a commercial space, the city will provide:
1. $3000 “quick pay” grant to be used for business expenses including, but not limited to commercial rent or mortgage and/or utilities, vendor payments, employee wages, other.
2. Access to and payment of certain Professional Services. Services will be procured by and through contractual relationship with non-profit organization(s). Services will be funded in an amount not to exceed $1000 per qualifying applicant. Non-profit organization will receive an administrative fee of 10% of total services provided.
3. $2000 grant upon completion of Professional Services obligations.
Staff requests approval of $3,500,000 in General Fund Reserves to support the program described above. The City Attorney’s office has offered Legal Opinion regarding the constitutionality of the use of general fund revenue for the purposes described. Based on the facts presented, including appropriate legislative findings, Economic Development & Housing concurs with the conclusion of the City Attorney’s office that expenditures limited to Brick & Mortar Businesses serve a public purpose.
Economic Development and Housing also finds the program, described above, is consistent with the principles and practices of Economic Development. That is, the use of public funds 1) will provide a direct economic impact through the retention of jobs; 2) will provide indirect impact through the generation of economic activity; and 3) will yield positive fiscal impacts for the city of Clearwater (i.e. will reduce the negative impacts to the city commensurate with the investment).
Staff will endeavor to reimburse General Fund Reserves to the maximum amount possible using funds that are, or may become, available. These funding sources include, but are not limited to, Community Development Block Grant as made available by the federal CARES Act (CDBG-CV), Community Redevelopment Agency, Downtown Development Board and others. Currently, staff estimates approximately $300,000 will be reimbursed to General Fund Reserves.
Home-Based Businesses
For qualifying home-based businesses, the city will provide:
1. Access to and payment of certain Professional Services. Services will be procured by and through contractual relationship with non-profit organization(s). Services will be funded in an amount not to exceed $1000 per qualifying applicant. Non-profit organization will receive an administrative fee of 10% of total services provided.
2. Grant equal to 1 month’s revenue, not to exceed $2000, as evidenced by appropriate financial records.
Funding is provided by CDBG-CV, Community Redevelopment Agency, Downtown Development Board and others
Application Process
Applications will be processed via online portal and will take approximately 15-20 minutes to complete. Applicants will be served on a “first complete application, first served” basis until funds are exhausted.
Termination of Program
Program will end when all funds are exhausted or December 31, 2020, whichever occurs first.
APPROPRIATION CODE AND AMOUNT:
A mid-year budget amendment will establish special program 181-G2011, Back-to-Business Grant Program, recognizing an allocation of $3,500,000 of General Fund reserves to fund this program.
USE OF RESERVE FUNDS:
Funding for this program will be provided by a mid-year budget amendment allocating General Fund reserves of $3,500,000 to 181-G2011, Back-to-Business Grant Program. Inclusive of this item if approved, a net total of $4,322,000 of General Fund reserves has been appropriated by Council to fund expenditures in the 2019/20 operating budget. The remaining balance in General Fund reserves after the 8.5% reserve is approximately $23.2 million, or 15.3% of the current General Fund operating budget.