That the City Council consider and approve:
A. Revising the ARPA appropriation for the Dine and Shop Local Incentive Program to $11,500;

B. Reallocating $190,000 of ARPA funds from the Dine and Shop Local Incentive Program to the Small Business Assistance Program;

C. Reallocating $80,000 of ARPA funds from the Bill Assistance Program to the Small Business Assistance Program; and,

D. Reallocating $18,500 from the Dine and Shop Local Incentive Program's administrative fees to the Small Business and Bill Assistance Programs for additional administrative fees.

Dine and Shop Local Incentive Program (Dine and Shop)
On October 3, 2022, the City Council approved $220,000 of ARPA funding for the Dine and Shop program. This amount was intended to cover the costs of ordering up to one thousand $200 gift cards, and providing $20,000 for the administration of the program. The $200 Mastercard gift cards would be provided to income eligible La Habra residents and would be required to be only used at La Habra businesses that accept Mastercard.  Despite marketing the program through various modes including the City’s website, social media, local school districts, non-profits, etc., the City has not received significant interest in this program. It appears that part of the issue with the program, and why there may be such a low number of applications submitted to date, is that in order to determine eligibility for the program under ARPA guidelines, the City is required to collect certain personal information, such as household occupancy and income documents (tax returns, paystubs, etc.) from applicants. Some residents have expressed that they are not interested in the program as they consider the process to be too cumbersome, intrusive and time intensive for a $200 gift card.
 
Since Dine and Shop became available to residents on November 7, 2022, the City has only received 14 applications, five of which were deemed eligible and approved, three are currently under review, and six have been denied. As a result, staff has only placed an order for the minimum amount of gift cards that could be ordered for the program at one time, which is 50 gift cards totaling $10,000, plus $582.50 in administrative fees. Staff will use the remaining $917.50 of the proposed revised appropriation of $11,500, to cover any additional program fees. Once the 50 cards have been issued, any remaining unused program funds will be released for use in other ARPA eligible programs, subject to Council approval. Staff has received the first 25 gift cards, with the balance to be received in February 2023, and will then distribute those cards to eligible residents that have had their applications approved.

In order to further promote this program and ensure that gift cards are provided to eligible households, staff will also be contacting the 40 applicants that have been approved for the residential Bill Assistance Program (BAP) and offer them a gift card, as the eligibility requirements for Dine and Shop and BAP are identical. If City Council approves staff's recommendation to reallocate the funding from this program to other ARPA aid programs, staff will close the program to new applicants once the initial 50 gift cards have been distributed.
 

Small Business Assistance Program (SBAP)
The SBAP program began accepting applications on August 1, 2022, to provide assistance of up to $10,000 to qualified small businesses. By September 21, 2022, the City had approved the entire $300,000 that the City Council originally allocated for this program for qualified applicants. However, there are an additional 27 applications that have not yet been reviewed, since all the initial program funding was expended. If approved by the City Council, staff's recommendation to reallocate the remaining $190,000 from the Dine and Shop to SBAP will allow the City to potentially fund an additional 19 SBAP applicants for local small businesses. Additionally, depending on the volume of BAP applications that are received over the coming weeks, staff also recommends that Council re-allocate $80,000 from the BAP program to SBAP in order to fund all remaining SBAP applications that have been received; assuming the remaining 27 businesses that have submitted applications are all eligible. 

As of January 31, 2023, the City has received 177 BAP applications, 40 have been approved, and 34 have been rejected due to the lack of required support documentation. Re-allocating $80,000 from BAP to SBAP would still leave $420,000 available for the BAP program. This would allow 128 remaining applicants to receive funding under BAP, should they all qualify.

On May 2, 2022, the City Council approved an ARPA budget appropriation in the amount of $1,172,300 to fund program and administrative expenses for the programs below. Staff is proposing the following reallocations/changes to fund program benefits:
 

Program	Original Appropriation	Proposed Appropriation
Bills Assistance Program	$500,000	$420,000
Small Business Assistance Program	$300,000	$570,000
Dine and Shop Program	$200,000	$10,000

Staff also recommends transferring $18,500 from the original Dine and Shop program appropriation to the SBAP to fund additional consultant costs necessary to review, process and approve additional SBAP applications that will be considered under the expanded program.

LU. 2.4 Balancing Jobs and Housing
ED. 2.3 Business Attraction-Retention
 

CITY COUNCIL GOALS & OBJECTIVES:  
Use of ARPA funds for this purpose satisfies the following City of La Habra Goals and Objectives:

Goal 5.d   Continue to improve the City business retention and expansion program.

Goal 5.f   Encourage the Development Community to support community programs, activities, and events as good corporate partners.

Goal 6.e  Build and maintain partnerships and collaborations with other local government agencies, the business community, local nonprofit organizations, and the faith-based community.