Title:
Title
City Council COVID-19 Response: CARES Act Framework and Funding Priorities; Small Business Recovery Technical Services Contracts [Published for 10-Day Review 08/20/2020]
End
FileID
File ID: 2020-00970
Location
Location: Citywide
End
Recommendation:
Recommendation
Adopt a Resolution regarding the Coronavirus Aid, Relief and Economic Security (CARES) Act Small Business Recovery Program’s Technical Assistance Component: 1) authorizing the City Manager or the City Manager’s designee to transfer $2 million to the Small Business Technical Component Program (G02610100) from the allocation for the Economic Relief to Small Business Recovery Program (I02003000) in the Federal CARES Act Fund (Fund 2704); and 2) authorizing the City Manager or the City Manager’s designee to execute professional services agreements for the Economic Relief to Small Business Recovery Technical Services Program with the following: a) Sacramento Metropolitan Chamber of Commerce for $1,460,000; and b) Asian-Pacific Chamber of Commerce for $3,700,000.
FileName
Contact: Michael Jasso, Assistant City Manager, (916) 808-1380; Leslie Fritzsche, (916) 808-5450, Economic Investment Manager, Office of Innovation and Economic Development, Office of the City Manager
Body
Presenter: None
Attachments:
1-Description/Analysis
2-Contracts with the Sacramento Metropolitan Chamber of Commerce and Asian-Pacific Chamber of Commerce
3-Overview of Technical Assistance Providers
4-Coronavirus Relief Fund Programs
5- Resolution
Description/Analysis
Issue Detail: On March 13, 2020, the City declared a local emergency in response to the spread of the COVID-19 pandemic. Several actions were taken by the City to provide immediate economic relief to city businesses and residents, including allocating $16.1 million in funding for small business loans and $7.5 million in Creative Economy grants. This report recommends entering into two professional services contracts for provision of technical assistance to Sacramento’s small business community. The proposed contracts are with the Sacramento Metropolitan Chamber of Commerce for $1.46 million and the Asian/Pacific Chamber of Commerce for $3.7 million. The contracts are included as Attachment 2.
Framework and Funding Priorities: On May 12, 2020, Council held a workshop to discuss a CARES framework and funding priorities. During the workshop, Council expressed overall interest in funding programs and projects that provide small business assistance, get people back to work, offer opportunities for youth enrichment, address homelessness and housing issues, and support families impacted by this pandemic. The deadline for expending CARES funds is December 30, 2020. Given this short time frame, Council requested staff identify projects and programs for immediate CARES funding and implementation.
On May 26, 2020 Council committed $28 million in CARES to support immediate local economic relief services and programs for residents and businesses. As we continue to prepare CARES Act funding recommendations, staff will review funding suggestions for eligibility and alignment with identified Council priority areas as well as the results of the City Auditor’s community survey for residents and businesses:
• Small Business Assistance: Financial, technical, and entrepreneurship assistance to small businesses, non-profits, and community-based organizations (CBOs).
• Workforce Training: Fund programs and partner with workforce development providers, CBOs, and educational partners at all levels to retrain and uptrain workers dislocated due to the pandemic.
• Youth Enrichment: Implement robust programs, curriculum, and service for youth, including providing the necessary transportation and technology to support these programs.
• Family Services: Funding to support additional services for Sacramento families, including the expansion and availability of childcare services, food access, and programs that address domestic violence exacerbated by the stay-at-home orders.
• Homeless Services & Rapid Re-Housing: Services to place unhoused individuals into permanent housing and implement homeless aversion programs.
• Arts, The Creative Economy & Tourism: Financial and technical assistance directly to support the arts, tourism, and creative economy that have been devastated by the current pandemic.
To mitigate the impacts of COVID-19 on Sacramento businesses and their employees, Council approved $5 million in CARES Act funding for Small Business Recovery Technical Assistance Program. These funds will be used for a wide range of “wrap-around” services to help small businesses adapt to the new operational realities they face in a COVID-19 economic and public health landscape. In addition, the programs will be a resource for the businesses that received a loan through the City’s Small Business Forgivable Loan program to help fulfill the business plan and technical assistance required to have those loans forgiven.
These programs will focus on mitigating the impacts of COVID-19 by increasing business resiliency, assisting with repositioning strategies, and developing new business plans to aid in business recovery. In addition, this health crisis has highlighted the fact that many of the city’s businesses are not operationally prepared to take advantage of funding opportunities should they become available through programs like the Small Business Administration’s Paycheck Protection Program and Economic Disaster Investment Loan fund. This leaves these businesses even more vulnerable, less likely to weather changes in both market and economic conditions and potentially critically impacted by the pandemic.
The program elements are envisioned to include the following:
• Business planning including repositioning
• Digital and technological improvements to assist online business activity
• Space and facility planning to accommodate new public health standards
• Operational capacity such as financial and records management
• Data Collection for identifying COVID-19 business impacts
Because of the federal nature of the funding, staff sent out a Request for Proposals for Small Business Technical Assistance with proposals due on July 20th. Staff received 11 proposals and recommend working in some capacity with the majority of those that submitted. Staff is seeking Council approval for the larger contracts with the Sacramento Metropolitan Chamber of Commerce (Metro Chamber) for $1.46 million and the Asian-Pacific Chamber of Commerce (Asian Chamber) for $3.7 million both of which have a long history of providing technical services in Sacramento.
The Metro Chamber will be utilizing the expertise of their Small Business Development Center to provide services to the approximately 1400 businesses that will be receiving funding through the CARES funded Small Business Recovery Forgivable Loan Program. As part of that program, recipients will be required to develop a business plan within 6 months from loan award. One of the options for receiving loan forgiveness is obtaining 10 hours of technical assistance. The contract with the Metro Chamber will provide both of those services for those loan recipients who have been required to have demonstrated COVID-19 impact.
The Asian Chamber scope contains partnerships with over 15 organizations through the Sacramento Inclusive Economic Development Collaborative (Sac IEDC). The Sac IEDC is a coalition of local chambers including the Black Chamber and the Hispanic Chamber, Property Based Improvement Districts (PBIDs), non-profit organizations and funding institutions focused on ensuring all businesses are able to take full advantage of the economic opportunities Sacramento has to offer. This collaboration is key to ensuring outreach is widespread and technical assistance to address the impacts COVID-19 can reach underserved communities. Focusing on small and minority-owned businesses, their multi-faceted approach contains surveying businesses to target the type of assistance most needed followed by one-on one consulting, webinars, and digital training on pivoting business models to the new realities of the COVID 19 environment. The contract includes $1 million in Personal Protection Equipment which will be disseminated through the organizations included in the Asian Chamber/SAC IEDC partnership collaborative.
Staff will be working on fine tuning scopes and budgets for the other service providers. These service providers represent a wide spectrum from ones focused on specific industries such as Erica Castillo with a focus on the fitness industry to organizations such as the Black Small Business Association of California that will tailor their services to underserved and often underrepresented constituencies. California Capital, a long-standing partner to the City and the business community have offered their technical assistance to those businesses impacted and are included in our list of contractors. Attachment 3 describes these providers and their general scope. Staff is working with one of the organizations, the California Black Chamber of Commerce, is still refining their scope so they are not listed in Attachment 3. Because these contracts are under the City Manager’s approval authority, staff is not seeking approvals of those contracts but wanted Council to be aware of the range of services we will be offering to the small business community to address the challenges COVID-19 has thrust upon them. This range of services is recommended so staff can reach a range of constituencies and in a variety of different ways to meet the varying impacts the businesses are facing.
Policy Considerations: The City has been impacted by the global pandemic. Establishing programs and budgets that include federal CARES Act funding is consistent with City Council action relative to state and federal grant awards. Using CRF funds to pay for these agreements to mitigate the effects of the COVID-19 public health emergency is a necessary expenditure.
The Sacramento City Code Section 4.04.020 and Council Rules of Procedure (Chapter 7, Section E.2.d) mandate that unless waived by a 2/3 vote of the City Council, all labor agreements and all agreements greater than $1,000,000 shall be made available to the public at least ten (10) days prior to council action. These contracts were posted for 10-day review on August 20, 2020 as required.
Economic Impacts: CARES Act funds and other eligible federal and state grants will assist the City in providing economic relief to residents and business that have been impacted by COVID-19. Additionally, CARES Act spending will support and advance inclusive economic growth, improve the health of neighborhoods and support people, places, and actions that promote overall economic recovery and impacts immediately and well beyond this pandemic.
Environmental Considerations:
California Environmental Quality Act (CEQA); National Environmental Policy Act (NEPA): The proposed action is not a project under CEQA because it relates to government fiscal activities that do not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment. (Cal. Code Regs., tit. 14, §§15060(c)(3), 15378(b)(4)). The proposed action involves activities that are exempt from NEPA under title 24, section 58.34, of the Code of Federal Regulations.
Sustainability: None.
Commission/Committee Action: None.
Rationale for Recommendation: On July 6, 2020, staff released a Request for Proposals for third-party vendors to do technical assistance for small businesses as part of the City’s COVID relief for the City’s Small Business Recovery Loan Program. Eleven responses were received by the due date of July 20, 2020. Each of the proposals has a unique approach to the provision of services and many target different audiences or industry types. For that reason and because of the significant need, staff will be working on contracts with all of the submitting entities. All with the exception of the Asian Chamber of Commerce/Inclusive Economic Development Coalition and the Sacramento Metropolitan Chamber of Commerce are within the City Manager’s approval authority. The contracts are included herein as Attachment 2 and a summary of the other provider contracts as Attachment 3.
Staff is committed to executing the Council direction for these programs by getting the funds into technical assistance providers as quickly as possible so they can initiate their work and service the small business community. The resources provided will bring economic relief to those businesses, assist in the rebuilding of their financial strength, aid in their return to former employment levels and strengthen Sacramento’s economy so affected by the pandemic.
Financial Considerations: On April 21, 2020, the City received $89.6 million from CRF to address impacts related to the COVID-19 pandemic. An allocation of $5 million was previously approved for the Small Business Recovery Technical Assistance Program on June 30, 2020. The two contracts included for approval in this report total $5.16 million which exceeds the original allocation. Because the Economic Relief to Small Business program was undersubscribed staff is recommending transferring $2 million from that allocation and using it to augment the technical assistance resources. This will allow us to fund both of the contracts included in this report as well as the other contracts staff is currently working on. To date the City Council has approved a little over $78.7 million for the programs and projects, excluding other recommendations in this agenda. The CRF programs schedule reflecting Council’s allocations through August 18, 2020, is included as Attachment 4.
Local Business Enterprise (LBE): The contracts proposed in this staff report are all local business enterprises.