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HomeMy WebLinkAbout2.b. Approval of the Rosemount CARES Small Business Program EXECUTIVE SUMMARY City Council Work Session: August 4, 2020 AGENDA ITEM: Approval of the Rosemount CARES Small Business Program AGENDA SECTION: Discussion PREPARED BY: Eric Van Oss, Economic Development Coordinator, Kim Lindquist, Community Development Director AGENDA NO. 2.b. ATTACHMENTS: Rosemount CARES Small Business Grant Program Guidlines APPROVED BY: LJM RECOMMENDED ACTION: Information Item BACKGROUND The City is proposing using a portion of Rosemount’s federal CARES Act allocation to create the Rosemount CARES Small Business Grant Program. This program would support small businesses that have had a financial hardship as a result of the COVID-19 pandemic. One-time grants up to $10,000 will be awarded to eligible applicants to assist with payroll, rent, mortgage payments, utility bills, and other operational expenses that have occurred since March 1, 2020. Funds cannot be used to replace lost revenues. The City retains the authority and discretion to approve or deny an application, and reserves the right to subsequently add further priorities, change eligibility criteria, or discontinue the program in response to changing circumstances. All Rosemount businesses with 50 for fewer employees are eligible for Rosemount CARES Grants if they have not already received grants through the Minnesota Department of Employment and Economic Development’s (DEED) Business Relief Grant Program or the Dakota County CDA’s Small Business Relief Grant Program. City staff reviewed similar programs that utilized federal CARES dollars when determining eligibly, criteria and application process. Staff reviewed the grant programs from Lakeville, Burnsville, West Saint Paul, and the Dakota County CDA. After several conversations with the Dakota County CDA, staff determined a standalone program, with applications reviewed by City staff, would best suit Rosemount’s needs. The reasons for establishing a separate program largely came down to saving grant dollars on third party review costs and staff capacity. Staff reviewed the in-house Rosemount business list to determine the number of potential employers with 50 or fewer employees to estimate potential demand for the Rosemount CARES grants. It is estimated that approximately 150 local business could apply under the eligibility requirements. Staff will promote the Rosemount CARES Small Business Grant program prior to and during the application time period through targeted outreach and social media. The application period will open on August 10 and close on August 28, with potential to extend if additional funds are still available. Upon the acceptance of a complete application, staff will conduct an initial screening to ensure eligibility. Business owners will be notified they are eligible for the grant and final revenue and financial impact verification information will be requested. Upon receipt of that information, the City will distribute the grant. Grants will be awarded on a first come first serve basis. All grant funds allocated to businesses must be utilized by November 15, 2020. 2 Staff will be asking the Council to approve several items at the regular meeting tonight. Staff is recommending authorization of $500,000 in CARES Act money be dedicated to the Rosemount Cares Small Business Grant Program. We will be requesting that the Council authorize the City Administrator to enter into a grant agreement with each recipient; each recipient will need to meet the eligibility standards of the program. This will allow a quicker processing time than requiring the Council to approve each grant. Further, staff is asking the Council to waive the normal check processing procedure to permit checks to be distributed as soon as possible to get funds to eligible recipients. Finally, staff notes that we will be utilizing Ehlers to assist in review of some financial data to ensure timeliness and precision. We expect the amount to be no greater than $5000 and these costs are CARES eligible or can be taken out of the Port Authority budget. RECOMMENDATION Staff requests City Council feedback on this proposal. Final authorization of the Rosemount CARES Grant program is requested at the August 4 regular meeting. Rosemount CARES Grant Program Guidelines To provide emergency assistance to small local businesses in Rosemount adversely impacted by the COVID-19 pandemic, the City of Rosemount—Rosemount CARES Grant Program will provide grants of up to $10,000 to small businesses in need of support. Funds will help businesses pay for critical expenses such as rent payments, mortgage payments, utilities, payments to suppliers, and costs associated with reopening (including Personal Protective Equipment). Providing this support will increase the capacity of small businesses with a physical location in Rosemount to survive the current crisis and will help prevent potential future blight scenarios. These grant funds can be used to aid your business in its operations while complying with the State Stay Safe Plan. The Grant Program will be administered by the City of Rosemount Community Development Department. Grant funds will be distributed until the program allocation is exhausted. Terms: • Up to $10,000 grant based on economic injury from COVID-19 related eligible expenses. • Funds can be used for operating expenses, including rent payments, mortgage payments, utilities, payments to suppliers, or other critical non-payroll business expenses (including expenses related to reopening and personal protective equipment) as approved by the fund administrator. Eligible Businesses must meet all of the following criteria as of March 1, 2020 to be eligible: • Must be a locally owned (majority ownership in MN) and operated for-profit business with a physical establishment in the City of Rosemount • Must have at least one employee in addition to the owner as of March 1, 2020 and not more than 50 full-time equivalent (FTE) employees • Must have been operating since December 1, 2019 for at least 12 months prior to March 1, 2020 • Must be licensed (if necessary), in good standing with the State, County and City, current on property taxes prior to July 15, 2020, if applicable • Must demonstrate a significant loss in revenue since March 15 (no credit score or collateral requirements apply) Certain businesses are ineligible, including: • Home-based businesses; those without a physical establishment, (except in-home childcare providers will be eligible) • Non-profit organizations • Corporate-owned chains, (but franchise chains are eligible) • Individuals who have or are currently receiving assistance through the Pandemic Unemployment Assistance (PUA) program • Businesses in default conditions prior to February 29, 2020 • Businesses that primarily derive income from gambling (businesses that allow on-site charitable gambling are eligible) • Businesses that derive any income from adult entertainment • Businesses that primarily sell pawned merchandise, guns, tobacco or vaping products • Businesses that derive income from passive investments; business-to-business transactions; real estate transactions; property rentals or property management; billboards; or lobbying • Businesses that have received assistance through the Minnesota Small Business Relief Grants program offered by the Minnesota Department of Employment & Economic Development or Dakota County CDA Small Business Emergency Loan Fund. In addition to the City of Rosemount—Rosemount CARES Grant Program, businesses are strongly encouraged to apply for all available COVID-related funding. Businesses receiving federal relief funds are still eligible for the City of Rosemount Small Business Emergency Grant Program but must use City funds for other eligible expenses than those covered by federal funds. Application Process • Application Forms will be accepted beginning August 10, 2020 through August 28, 2020. • Application forms can be completed through the City’s website XXXXXX • If applications exceed the funding available, City of Rosemount Community Development staff will select grant recipients using a first come – first served basis. The City will notify approved applicants by email on or before September 10, 2020. Upon notice of an approved application, applicants will be required to submit the following within 10 business days: o Revenue verification. 2019 Federal Business Tax return or appropriate business tax schedule – based on entity type.  Businesses that have not yet completed a 2019 Federal Return are eligible to apply and substitute other documentation of revenue, and will need to provide their 2019 Federal Return when completed o Impact and loss of revenue verification. Evidence of negative impact and loss of revenue due to COVID-19 pandemic and peacetime emergency. Applicant should submit documentation that best demonstrates the impact and is deemed acceptable to Program Administrator.  Examples of acceptable documentation include: Sales Tax Reporting; monthly profit and loss statements; comparable point of sales, cash register reports, merchant statements or other sales records o Employee verification. Evidence of employment prior to March 1, 2020. Acceptable documentation may include: company’s 2019 federal form W3; period reporting from a 3rd party payroll processor; applicant’s Federal Form 941/Employer’s Quarterly Federal Tax Return; or other State or Federal payroll- related filing. o Evidence of grant eligible expenses that occurred in past three months, (e.g. rent/lease agreement, utility statements, supplier invoices, payroll, tax payments, payments to suppliers, etc.). Provide documentation that expenses total or exceed the amount requested in grant application • Failure to submit required documentation will result in forfeiture of grant award. • Upon notice review and acceptance of additional documentation, the business will enter into a grant agreement with City of Rosemount. Note: The City of Rosemount reserve the right to revise these guidelines as needed to best address the impact of the current pandemic.