HomeMy Public PortalAbout10) 10B CDBG COVID-19 Programs_Staff ReportCOMMUNITY DEVELOPMENT DEPARTMENT
MEMORANDUM
D ATE: September 1, 2020
TO: The Honorable City Council
FROM: Bryan Cook, City Manager
Via: Scott Reimers, Interim Community Development Director
By: Adam Gulick, Associate Planner
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM COVID-19
RELIEF PROGRAM UPDATE AND SMALL BUSINESS GRANT
PROGRAM GUIDELINES
RECOMMENDATION:
The City Council is requested to consider modifying the Small Business Grant Program
Guidelines relating to businesses that have already received monetary assistance from
another government agency.
BACKGROUND:
On June 16, 2020, City Council established new Community Development Block Grant
(CDBG) Programs utilizing funds from the Coronavirus Aid, Relief, and Economic Security
(CARES) Act and reallocated a portion of CDBG Funds designated for FY 2020-2021.
ANALYSIS:
City Council allocated 40 percent of the CDBG funds, received from the CARES Act to
the Temporary Rental Assistance Program and 60 percent of funds to Small Business
Grant Program.
City Council approved staff’s proposed eligibility requirements for both programs. The
Small Business Program included giving priority to small businesses not currently
receiving any financial assistance from other government agencies. Attached are the
guidelines and Council direction concerning this specific priority (Attachment “A”).
Below is an update on the Small Business Grant Program and Temporary Rental
Assistance Program:
AGENDA
ITEM 10.B.
City Council
September 1, 2020
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SMALL BUSINESS GRANT PROGRAM UPDATE:
There were 154 interest forms submitted online for the Small Business Grant Program,
which could fund a maximum of 30 grants. City staff contacted 30 businesses requesting
that they submit an application and associated documents authorized as first level of
priority (Restaurants and Food Establishments). Of the 30 businesses contacted, 12
businesses requested to be withdrawn from the program or City staff did not receive a
response. City staff reviewed the 18 applications submitted and discovered that 12
businesses had already received monetary assistance from another government agency,
including but not limited Federal PPE loans/grants.
The approved program guidelines included language disqualifying businesses that have
already received monetary assistance from another government agency. Since the first
tier of businesses were prioritized for assistance, City staff wanted to confirm with City
Council to see if the City should proceed with disqualifying these businesses or modify
the guidelines to provide a full or reduced grant regardless of other assistance received.
TEMPORARY RENTAL ASSISTANCE PROGRAM UPDATE:
A total of 184 people submitted interest forms for the Temporary Rental Assistance
Program which can provide 71 grants to households that have been financially impacted
by the COVID-19 pandemic. As of last week, the City has approved 34 households and
issued payments to their landlord or management company to help with their rent
payment. There are currently 14 applications that have been submitted but are pending
additional information from the applicants. City staff will be reaching out to the next 22
people on the waiting list and request that they submit the application and associated
documents.
CITY’S STRATEGIC GOALS:
City Council’s direction for the Small Business Assistance Program and Temporary
Rental Assistance Program further promotes City’s Strategic Goals of Quality of Life and
Economic Development.
FISCAL IMPACT:
There will be no fiscal impact associated with the requested Council action, as it relates
to the program guidelines.
ATTACHMENT:
A. Small Business Grant Program Guidelines
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TEMPLE CITY
COVID-19 SMALL BUSINESS ASSISTANCE
PROGRAM GUIDELINES
The City of Temple City’s Small Business Assistance Program offers a one-time grant up to $10,000
to eligible businesses to help them create jobs, retain jobs, and offer quality services to the
residents of Temple City. Grant funds may be used for overhead expenses, rent, ut ilities, and
necessary equipment to continue business operations, among others. Businesses are not expected
to pay back grants unless they fall out of compliance.
The program is funded through a grant from the U.S. Department of Housing and Urban
Development as eligible under Sections 105(a)17 of the Housing and Community Development
Act of 1974. The City of Temple City’s Employer Assistance Grant Fund meets the following
national objectives, depending on the business’ eligibility:
• Benefiting persons of low to moderate income; or
• Job creation and retention
Eligibility Requirements
To be considered for this program,
Businesses must:
• Be physically located within Temple City’s city limits
• Have no more than 25 employees, including the owner / operator (sole-proprietors, for the
purpose of this program, are considered to have 1 employee)
• Employ and retain at least 1 individual that does not exceed the program income limit.
Alternatively, the owner may be within the program income limit
• Have an active business license issued by Temple City
• Have been negatively impacted by the COVID-19 pandemic. Negative impacts include
circumstances such as forced closure, at least a 25 percent loss of income, inability to meet
social distancing requirements, required to provide personal protective equipment (PPE) for
staff.
• Provide all documentation requested by the city to facilitate the application process
• Have been in “good standing” prior to the COVID-19 pandemic outbreak, no outstanding
fees owed to the city, unpaid taxes, unpaid citations, or unresolved code violation issues
• Be located in one of the following areas: Crossroads Specific Plan; Mixed-Use Medium zone;
Las Tunas Commercial zone; Downtown Commercial zone; Industrial zone; or within the
Mixed-Use Low Zone and on Lower Azusa Road, Gidley Street, or Temple City Boulevard.
• Certify that they will remain open, or if businesses is closed or closes, to reopen in a timely
manner following the lifting or easing of COVID -19 restrictions, or shall be subject to
repayment of grant.
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• Have or register for a DUNS Number
Ineligible Businesses:
• Business that do not currently employ LMI Persons OR that are in a census tract, block group
that does not service LMI persons
• Extensions of a national chain (e.g. Taco Bell, Wal-Mart, Vons, Walgreens…etc)
• Home-based businesses
• Non-profit organizations
• Casinos, liquor stores, fortune tellers, hookah/smoke lounges, smoke shops, pawn shops,
payday loans, check cashing services, firearm or weapons dealers, adult entertainment,
passive real estate investors, bail bonds, and cannabis businesses, short term rentals, and
tattoo parlors .
Disqualifying Criteria:
Any of the following events or actions may disqualify the owner of a business from consideration
for grant funding:
• Poor credit history
• Bankruptcy in the last 5 years
Eligible Expenses
Businesses that are selected to receive relief aid, may only use the funds for program eligible
expenses, including:
• Employee salaries or payroll
• Rent and utilities
• Service updates related to COVID-19, such as building or improving a website to allow for
online sales
• COVID-19 related equipment, such as purchasing personal protective equipment (PPE),
sneeze guards, and cleaning products
• Other COVID-19 related expenses will be considered on a case by case basis by the city’s
CDBG program administrator
Ineligible Use of Funds
Funds may not be used for the following:
• Personal property
• Repayment of refinance of existing debt or to pay operating deficits tax arrearages,
governmental fines or penalties or general government expenses
• Salary for the business owner (after confirmation from LACDA sole proprietors may be
exempt from this requirement)
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• Political or religious activities, lobbying or any activity prohibited in the CDBG regulations
in 24 CFR 570
Monitoring Process
All businesses that accept relief aid must agree to participate with ongoing grant monitoring. The
city may periodically request documents that verify the appropriate use of grant funds and reports
on how the grant fund impacted the business.
Staff is responsible for providing on-going monitoring to ensure that grant funds are used in the
way they were intended. Staff will review the business’ application to identify how the business
intends to use the funds and will request supporting documents three months after funds have
been awarded. If a business finds it necessary to change their intended use of the funds, they
must notify the City in writing with at least five (5) days in advance. Although this list is not
intended to be exhaustive, supporting documents may include:
• Lease agreement and rent receipts
• Invoices
• Payroll documents
• All collected documents will be placed in a business’s program file.
How to Apply
Businesses that wish to be considered may apply for assistance by submitting a complete
application, which includes, providing all required documentation by the specified deadline. Staff
will review all submitted applications to determine eligibility to the program. Incomplete
applications will not be considered.
The application consists of the followin g components:
1. Applicant Information
a. Staff shall review that all information has been filled out
b. Staff shall verify that the business has included a DUNS number
2. Background Information
a. Staff shall review that all information has been filled out.
3. Financial Information
a. Staff shall review that all information has been filled out.
b. Staff shall verify that the business has identified how they plan to use grant funds. Staff
will note how the business plans to use funds and will collect supporting documents
and monitor grant expenses.
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4. Assurance and Signatures
a. Staff will verify that the applicant has signed and dated the application.
Selection Process
Applications will be categorized into the following tiers.
1. Restaurants – full service, takeout, ice cream shops, retail bakeries, and the like;
2. Ground floor retail uses;
3. Other ground floor commercial uses, other than an office, with a storefront, (such a s
barbers, hair salons, gyms, tutoring centers, shoe repair, locksmith, etc.);
4. All other commercial and industrial uses.
Businesses that have not received or not planning to receive COVID-19 related grant aid from
other government agencies will be given priority. After all such businesses receive a grant,
businesses that have received or are planning to receive other governmental aid related to COVID-
19 will be considered.
A random selection will be taken of all Tier 1 applicants. If any additional funds are remaining a
random selection will be taken of all Tier 2 applicants. If any additional funds are remaining a
random selection will be taken from Tier 3 applicants, and so on until all funds are allocated. Back
up applicants will be chosen in each tier in case the chosen applicants do not meet the
requirements of the program or withdraw their application.
Awarding Process
Upon verification of eligibility, the City will confirm eligibility status with the business via email
and a physical hard copy will be sent in the mail. The City will provide the business with an
agreement outlining the terms and conditions of the award. Upon rece ipt of the signed
agreement, the City will disburse the grant funds.
Default and Termination
The occurrence of any one or more of the following events will constitute an “Event of Default”
under this Agreement:
• Any statement, representation, or warranty contained in this Agreement or the Application
Documents submitted to the City found by the City to be false or misleading.
• Any use, by Grantee, of any portion of the Grant Funds for any purpose other than the
exclusive use(s) of Grant Funds set forth in Subsection B to Section 3 of this Agreement.
• Grantee fails to abide by the Program Requirements or breaches any covenant of this
Agreement.
Upon and during the continuance of an Event of Default, the City may do any of the following,
individually or in combination with any other remedy:
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• The City may terminate this Agreement by giving a written termination notice to Grantee,
and on the date specified in such notice, this Agreement shall terminate and all rights of
Grantee hereunder shall be terminated.
• The City may demand the immediate return of any previously disbursed Grant Funds that
have been claimed or expended by Grantee in breach of the terms of this Agreement,
together with interest thereon from the date of disbursement at the maximum rate
permitted under applicable law.
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ADDITIONAL INFORMATION
Income Qualifications
Definition of a Household and Income of Household Members
A Household is defined as all the persons who occupy a housing unit. The occupants may be a
single family, one person living alone, two or more families living together, or any other group of
related persons who share living arrangements.
Annual income is defined as the total gross amount of income received from all sources by adult
individuals of the household who have earned or received income during a 12-month period prior
to the March 27, 2020 authorization of the Coronavirus Aid, Relief, and Economic Security A ct
(CARES Act) to address the COVID-19 pandemic. Additional information on household income is
provided in TYPES OF HOUSEHOLD INCOME section below.
To determine program eligibility, all sources of annual income for each household member over
the age of 18 and the exact amounts earned from each income source must be accurately
documented. The primary applicant(s) are also required to certify by signature that the
information provided regarding household members is correct.
Eligible households must be below the “Moderate Income” limits for confirmed household size.
Emergency Assistance for Small Businesses Household Income Limits
Number of Persons Moderate-Income
1 $63,100
2 $72,100
3 $81,100
4 $90,100
5 $97,350
6 $104,550
7 $111,750
8 $118,950
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Required Document(s) Checklist
Requires Verification Acceptable Verification Documents
Identification Government Issued – ID
• Driver’s License or
• Passport
Business Owner(s) – if incorporated Articles of Incorporation
• Verifying that specific individuals
may make decisions on the
business’s behalf
Income • Most recent paystubs (all income
received in 1 month)
• 2019 Tax Return
• Award letter
COVID-19 Impacts Documents verifying how COVID-19
negatively impacted the business
• Profit and Loss Statement
• Notice(s) received to close
TEMPLE CITY