Presenter/Contact
Presenter
Jeff Jewell, Director of Economic and Community Development
Contact Info
(830) 221-4621 - jjewell@nbtexas.org
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SUBJECT:
Title
Discuss and consider approval of a resolution authorizing the City Manager to approve the disbursal of grant payments to sixty-six small businesses located within the corporate limits of the City of New Braunfels via the City’s COVID-19 Small Business Resource Grant that are consistent with the general statement of purpose of the City’s Chapter 380 Economic Development Program Policies and Procedures
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BACKGROUND / RATIONALE:
On June 8, the City Council adopted the COVID-19 Small Business Resource Grant Program authorized under Chapter 380 of Texas Local Government Code. Chapter 380 of Texas Local Government Code allows municipalities to make grants or loans of public dollars to promote local economic development and to stimulate business and commercial activity in the municipality. The City’s adopted Chapter 380 Program Policy allows for the City to establish new programs by resolution if it is found to bring benefits to the City consistent with the program’s general statement of purpose and policy.
The grant program was intended as a source of capital for small businesses that experienced significant business interruptions due to the COVID-19 global pandemic. The program is designed to provide funding for small businesses to cover economic damages suffered as a direct result from COVID-19. Eligible uses of the funds include lease or mortgage payments, utility payments, employee(s) payroll for employees still employed and working at the business and other business. Grants were offered up to the lessor of $10,000 or fifteen percent (15%) of an applicant’s previous year’s operating expenses as verified through its financial statements. The City Council provided the Mayor with the discretion to establish a review committee to evaluate the businesses requesting assistance and provide a recommendation to the City Council as to which applicants should receive an award. Committee members were:
• Mayor Rusty Brockman
• Mayor Pro-Tem Justin Meadows
• Councilmember Jason Hurta
• Don Austin, EDC Board member
• Chris Snider, Mayor’s Recovery Task Force
• Delia Saucedo-Milam, member of public
The City opened an application process on June 15 and ended on June 19. The City received 237 applications with 188 determined to be eligible for the program. One hundred eighty-six (186) businesses were submitted to the review committee after two businesses asked to be removed from consideration. The review committee adopted initial criteria for the selection of businesses that required a company demonstrate at least a 25% decline in revenue between March-May 2019 and March-May 2020. With these initial criteria in place, the committee set out to select businesses that met the following additional criteria:
1. All businesses mandated closed by local and Governor’s orders and meeting the primary revenue decline criteria were funded per program guidelines; and
2. All businesses showing at least a 25% drop in revenue, required to operate at a reduced capacity because of local and Governor’s orders, having less than $1,000,000 in annual business expenses, as well as those businesses selected by the committee that were determined to have revenue and sales negatively affected by the ban on gatherings, in addition to a discretionary decision to include daycares and child care centers; and
3. Lodging and accommodation businesses with at least a 25% decline in revenue and those businesses with more than $1,000,000 in annual expenses demonstrating greater than a 50% decline in revenue; and
4. Retail establishments with the greatest percentage of revenue declines received the remaining budgeted funds.
In total, sixty-six (66) businesses were advanced by the committee for a funding recommendation totaling $597,262 and are detailed in Attachment B. Of those recommended, the median revenue loss was $103,598, which represents an average income loss of 63% of revenue between 2019 and 2020 for the recommended businesses.
ADDRESSES A NEED/ISSUE IN A CITY PLAN OR COUNCIL PRIORITY:
|
X |
Yes |
Strategic Priorities |
Ensure sustainable quality development Maintain fiscal stability of City operations |
FISCAL IMPACT:
As put forth by the recommendation committee, the funding recommendation of $597,262 will be derived from sales taxes from the general fund. This funding strategy was approved by the Economic Development Corporation and City Council with the recent adoption of amendments to their respective economic development agreements.
Recommendation
COMMITTEE RECOMMENDATION:
The Small Business Resource Committee recommends approval of the funding recommendations.
STAFF RECOMMENDATION:
Staff recommends approval of the resolution authorizing the city manager to enter into Chapter 380 Agreements with the selected recipients.