Adopt Resolution #20-231 Approving Small Business Relief Grants and Modification of CARES Act Allocation and Program Criteria

Purpose:
Consider Approving Small Business Relief Grants and Modification of CARES Act Allocation and Program Criteria.

Background:
The City of Ramsey has been both proactive and reactive to helping our businesses during the Covid-19 pandemic.  City staff and officials have served as conduits of information to assist businesses and to direct them to State and Federal business assistance programs (i.e. PPP Loans, EIDL, and other State programs)  In addition the City has implemented locally based assistance in the form of the Covid-19 Resource Page,  Ad Reimbursement Program, Liquor License Renewal Program and the City and County Grant Programs.  All of these resources working together are helping provide the support our businesses need.

Our Current Program
The City has allocated $330,000 for a $10,000 City of Ramsey Small Business Relief Grant Program.  This allocation could fund all eligible applicants including those who have applied to both the Anoka and Ramsey Grant Programs (see next section). This program was designed to Meet CARES Act Rules and Regulations, provide underwriting for submitted applications (proof of financial impact, in good standing and entity verification) to ensure that the City is protected in the case of Audit,  and to get money out to businesses in a timely manner.   CMDC is in the process of underwriting pre-screened applications and the status of those applications is included on the Grant Summary attachment.  It should be noted that businesses have been taking longer than expected to provide the financial information needed to complete the underwriting.

Changes to County Program and Possible City Grant Policy Changes
During the application screening process the City was made aware of a change that Anoka County made to is application process.  Anoka County was under-subscribed to its grant program and wanted to make it more flexible and solicit more applicants and get more CARES Act money out to businesses.  One of the changes included removing the prohibition to receive multiple grants from both the City and the County.  As of October 6, 2020 their were five qualifying businesses that had applied for both the Anoka County Grant and City of Ramsey Grants.  They all have passed prescreening and are currently in underwriting.  A decision will need to be made on whether or not the Council should amend the City grant criteria to allow for companies that have qualifying expenditures can receive multiple grants from the City and County as long as the pass underwriting.  These five business are included on the Grant Summary attachment and are marked Dual Award.

If the Council chooses to modify the City grant policy to allow from grants from the City and County staff recommends that the City Council open up a small application window for eligible Ramsey businesses that applied for the Anoka County Grant but did not apply for the City grant.  The rationale is that they may not have applied for the Ramsey Grant thinking it was an either or grant opportunity.  The City has cross-referenced the City and County grant applicants and there are eight businesses that could potentially apply for the City program.  These eight businesses are included on the Grant Summary attachment.

N/A.  If criteria is changes to allow for more participation into the City program those businesses will be contacted directly.

Alternatives:

1. Option #1 (Recommended Option)
   1. Change the City of Ramsey Small Business Grant Criteria to allow for the acceptance of grants from both the City and County (impacts 5 businesses)
   2. Allow eligible Ramsey businesses that applied for the Anoka County Grant to apply for the Ramsey Grant program and establish a 3 day application window (October 14-16, 2020)

The potential financial impact of Option #1 would be the need to allocate an additional $80,000 in CARES Acts funds. 

Note:  This assumption assumes that 100% of all businesses get through underwriting with approval.  Based on information received from CMDC, and the County Program, the underwriting approval rate is closer to 60% which means that it is likely that there would not actually be a need to utilize additional CARES Act funds to fund the additional applicants.

2. Change the City of Ramsey Small Business Grant Criteria to allow for the acceptance of grants from both the City and County (impacts 5 businesses)

There would be no financial impact as 31 10,000 grants and their administration have already been approved by the City Council

3. Other alternative as directed by City Council
4. Do not authorize any grants

The City Council has already authorized an allocation of $330,000 for business grants and underwriting using the City's CARES Act allocation.  Staff is asking the City Council to authorize an additional $80,000 to allow for 'dual grants' - one from the City and one from Anoka County. If the full $80,000 is spent on the grant program it will reallocate the use of the remaining CARES Act Funds. However, it is likely that not all Applicants will qualify for the full $10,000 award, so it is possible that this additional allocation may not be necessary. Staff simply desires the flexibility given the short window to award the grant (end of October for November 15 deadline). 

Consistent with previous EDA recommendation, Staff recommends approval of Resolution #20-231 approving Small Business Relief Grants with the modification to allow grants to be awarded by both City of Ramsey and Anoka County. 

Motion to adopt Resolution #20-231 approving Small Business Relief Grants with the modification to allow grants to be awarded by both City of Ramsey and Anoka County.