MEETING DATE: 5/5/2020
DEPARTMENT: COUNTY ADMINISTRATION OFFICE
DEPT HEAD/DIRECTOR: Ray Espinosa
AGENDA ITEM PREPARER: Dulce Alonso
SBC DEPT FILE NUMBER: 119
SUBJECT:
COUNTY ADMINISTRATION OFFICE - R ESPINOSA
Receive an informational presentation on financial resources available for local organizations and the community impacted by the Coronavirus (COVID-19) pandemic and the County’s/State's Shelter in Place order and receive direction from the board.
SBC FILE NUMBER: 119
AGENDA SECTION:
REGULAR AGENDA
BACKGROUND/SUMMARY:
Executive Summary
On April 14, 2020, Special Board meeting, the Board directed the County Administrative Officer to present the various resources, and financial assistance is available for local businesses to help them survive in this uncertain time of closure. County staff has been working with local business partners to identify existing resources, expand methods of communicating available resources, analyzing State and federal resources, and exploring additional resources to provide to local organizations.
Background
The County of San Benito is responding to the Coronavirus (COVID-19) pandemic. A local emergency was declared due to the highly contagious nature of this virus. On March 6, 2020, in the absence of the Board of Supervisors, the County Administrative Officer proclaimed a local emergency effective immediately based on conditions existing as defined by Government Code 8558, resulting from the novel coronavirus. This Proclamation applies to the entire County of San Benito.
The Board of Supervisors ratified the Proclamation issued by the County Administrative Officer on March 6, 2020. The Board, on March 10, 2020, ratified the proclamation and declared a local state of emergency to last for 60 days unless earlier terminated or extended.
On March 17, 2020, the Health Officer enacted a Shelter in Place order through April 7, 2020, restricting the movement of all people in the County to prevent the spread of the virus. The Order called for County residents to travel only for essential matters. Many non-essential local businesses were asked to close to reduce the spread of the virus.
On March 31, 2020, the Board of Supervisors adopted an Ordinance that suspended the authority of any landlord to commence evictions on any residential or commercial property through May 31, 2020, when the eviction is:
- Based on the non-payment of rent, or a foreclosure, arising out of a substantial decrease in the household or business income (including, but not limited to, a considerable reduction in household income caused by layoffs or a reduction in the number of compensable hours of work, or a substantial decrease in the business income generated by a reduction in opening hours or consumer demand), or extraordinary out-of-pocket medical expenses; and
- The decline in the household or business income or the out-of-pocket medical costs described in subparagraph (a) was caused by the COVID-19 pandemic, or by any local, state, or federal government response to COVID-19, and is documented.
The Order and resolution do not relieve a tenant of the obligation to pay rent, nor restrict a landlord’s ability to recover rent due. The ordinance is applicable in the unincorporated areas of the County.
The Health Officer extended the Shelter in Place order on March 31, 2020, to May 3, 2020, and clarified and strengthened provisions to increase social distancing and reduce a person to person contact to further slow the transmission of COVID-19.
Analysis
Local resources
In June of 1992, Economic Development Administration (EDA) awarded a $300,000 grant, and the City of Hollister and San Bento County matched $200,000. In 2014 the City of Hollister and San Benito County relinquished custody of the economic development administration Revolving Loan Fund which has operated under the provisions of an EDA approved revolving loan fund. Fresno Community Development Financial Institution was authorized to administer the revolving loan program. In December of 2014, the City and County transferred the sum of $686,878 in the Economic Development Administration Revolving Loan to the Fresno Community Development Financial Institution, which later changed their name to Access Capital.
Access Capital has a sum of $601,440 in the San Benito Fund available to lend to San Benito County Business. They currently have a total of three loans totaling $138,000 outstanding operated under the provisions of an EDA approved revolving loan fund.
Grow San Benito County Loan Fund EDA modifications:
Access Capital requested modifications to the current EDA provisions on the Revolving Loan Fund. On Friday, April 24, the EDA agreed to modify the current criteria used to administer the loan. EDA approved the following modifications:
- Loan amounts ranging from $5,000- $25,000;
- The maximum loan term is five years;
- Payment deferment period of up to 6 months (interest still accrues during the deferment period).
- Interest Rate: 4% fixed rate, no pre-payment penalties
- Eligible Purposes: Loan proceeds can be used for working capital and may go toward business expenses, such as: Payroll costs, including costs for employee vacation, parental, family, medical, and sick leave, employee related insurance, rent, inventory, supplies/materials, utilities, professional services, and more.
Loan Fees: 2% origination fee and closing costs (e.g. credit report, recording a lien filing, Cal-Cap, etc.). These fees can be financed into the loan.
Federal Relief Efforts
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020. The CARES Act allocates $2.2 trillion for assistance to individuals, families, businesses, and preserving jobs economically impacted by the Coronavirus (COVID-19) pandemic.
The CARES Act’s Title I: Keeping American Workers Paid and Employed, contains several relief provisions. Two specific programs for businesses providing over $350 billion in aid include:
- The temporary expansion of the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDL) to cover the emergency advance of up to $10,000 within three days of applying for an EIDL; and
- The new Paycheck Protection Program (PPP) loans administered under the SBA’s 7(a) Loan Program, offering various loans to small businesses.
The following chart summarizes and compares the two programs. The terms continue to change as this crisis unfolds.
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Paycheck Protection Program (PPP Section 7(a)
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Economic Injury Disaster Loan (EIDL)
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Administrator
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U.S. Small Business Administration (SBA)
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SBA Approved Financial Institutions
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Amount of Loan
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Lesser of $10 million or 2.5 times average monthly payroll costs (not including independent contractor payments) incurred during calendar year 2019
Calculations for seasonal and new business can vary
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Up to $2,000,000
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Grants
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None
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Emergency advance grant up to $10,000
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Interest Rate
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1%
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For-profit: 3.75%
Non-profits 2.75%
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Term/Maturity
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2 years
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Up to 30-years
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Forgivable Amount
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Up to the principle balance for loan proceeds used for qualified purposes
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None
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Fees
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None
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None
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First Payment/Deferral
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Up to 12 months (interest accrues during deferment)
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6 months (interest accrues during deferment)
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Collateral
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None, Unsecured
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Available collateral will be considered
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Guarantees
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None
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Owners 20% or more of company
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Use of Proceeds
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Payroll support, mortgage payments, rent, utilities, insurance, and debt payments incurred before 2/15/2020
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Economic loss caused by the COVID Pandemic.
Fixed Debts, accounts payable and other expenses that cannot be paid because of the disaster’s impact.
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On April 24, 2020, President Trump signed into bill the Paycheck Protection Program and Health Care Enhancement act. The bill offered an additional $484 billion to replenish and supplement critical programs under the CARES Act, including the Paycheck Protection Program (PPP), small business disaster loans and grants, and other programs.
Employment Development Department (EDD) Resources
The Employment Development Department (EDD) developed new resources to tap into available state and federal resources to assist with the economic challenges of this pandemic. The launch of the Pandemic Unemployment Assistance (PUA) program helps unemployed Californians who are business owners, self-employed, independent contractors, have limited work history, and others not usually eligible for regular unemployment benefits. Additional information can be found at https://edd.ca.gov/Unemployment/UI_Online.htm
Great Plates Delivered program
On April 24, 2020, Governor Gavin Newsom announced the launch of a first-in-the-nation Great Plates Delivered program. The program is designed to support adults 60 and older and adults 60-64 who are at high-risk from COVID-19, in staying home and staying healthy by delivering three nutritious meals a day, and also provide essential economic stimulus to local businesses and workers struggling to stay afloat during the COVID crisis.
The purpose of the new Great Plates Delivered program is twofold:
1) to provide meals to adults 65 and older and adults 60-64 who are at high-risk, as defined by the CDC and who are unable to access meals while staying at home and are ineligible for other nutrition programs; and
2) to support local restaurants and other food providers/agricultural workers and to help owners who have closed or are struggling to remain open due to COVID-19 mitigation tactics.
The program will be administered by local government, Office of Emergency Services, is gathering additional information on this program, leading program management and implementation, in partnership with local organizations.
Additional information can be found at https://covid19.ca.gov/restaurants-deliver-home-meals-for-seniors/
BUDGETED: