HomeMy WebLinkAbout2020-47 - Small Business Loan ProgramRESOLUTION NO. 2020-47
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COSTA MESA,
CALIFORNIA, APPROVING AND AUTHORIZING THE CREATION OF A
EMERGENCY SMALL BUSINESS LOAN PROGRAM IN PARTNERSHIP WITH THE
SMALL BUSINESS DEVELOPMENT CENTER AND MAIN STREET LAUNCH CDFI.
THE CITY COUNCIL OF THE CITY OF COSTA MESA DOES HEREBY
DECLARE AND FIND AS FOLLOWS:
WHEREAS, on March 12, 2020, the City declared a local state of emergency
over the spread of the COVID-19 virus, and on March 19, 2020, the State of California
issued orders requiring households to shelter -in -place and the closure of nonessential
businesses, thus impacting the revenues of many Costa Mesa businesses and the
economic stability of such businesses; and
WHEREAS, the forced closure has extended four times longer than the average
cashflow reserves that a typical small business can support; and
WHEREAS, existing federal loan programs are not able to assist all businesses
and much of the funding for these programs have already been exhausted; and
WHEREAS, the City of Costa Mesa participates in the United States Department
of Housing and Urban Development's (HUD) Community Development Block Grant
(CDBG) Program; and
WHEREAS, the City has received an award letter from HUD of $668,000 for
CDBG CV funds specifically meant to reduce adverse impacts from the COVID-19
pandemic; and
WHEREAS, the City can use these funds for economic development, but still
must seek final guidance from HUD on the use of CDBG CV funds; and
WHEREAS, the federal regulations (Title 24 Code of Federal Regulations Part 91)
delineate the required content of the Consolidated Plan, including an annual application
and expenditure plan for CDBG and HOME funds, known as the annual action plan; and
WHEREAS, should the City desire to use these funds for an Emergency Small
Business Loan Program, the City would be required to amend the CDBG 2019/2020
annual action plan to include $250,000 dollars to be used for such purposes; and
Resolution No. 2020-47 Page 1 of 3
WHEREAS, the City desires to create a small business loan program to
ameliorate the effects of the COVID-19 Emergency on the City's small businesses; and
WHEREAS, the City does not have the staff resources to promote, manage,
issue, or audit loans that a loan program would require, such that partnerships with
established private entities would be necessary to implement such a program; and
WHEREAS, the Small Business Development Center (SBDC) and Main Street
Launch, a Community Development Financial Institution (CDFI) have demonstrated
their experience in working with municipalities and small businesses across California
for the successful creation and implementation of such programs; and
WHEREAS, the City desires to create the Costa Mesa Emergency Small
Business Loan Program in partnership with SBDC and Main Street Launch CDFI.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Costa
Mesa as follows:
1. The City Council approves the creation of the Costa Mesa Emergency Small
Business Loan Program in partnership with SBDC and Main Street Launch
CDFI.
2. The City Council authorizes the City Manager to execute an agreement, in a
form approved by the City Attorney, with Main Street Launch CDFI with a total
cost cap of 15% of deployed capital as an administrative fee for the complete
management of the initial deployment of the funds in response to the COVID-
19 Emergency and negotiate an appropriate interest rate for an ongoing
Emergency Small Business Loan Program for the administration cost of
future loan deployments.
3. The City Manager is directed to work with HUD and the US Economic
Development Agency representatives to apply for funding options for the
Emergency Small Business Loan Program from the CARES ACT.
4. The City Council approves an allocation of $250,000 to fund the creation of
the Emergency Small Business Loan Program from General Fund and/or
CARES ACT monies.
Resolution No. 2020-47 Page 2 of 3
5. The City Council approves the establishment of a donation platform managed
by Main Street Launch CDFI, in a form approved by the City Manager and
City Attorney, to receive non -City funds to boost the total fund amount.
PASSED AND ADOPTED this 19th day of May, 2020.
ATTEST:
STATE OF CALIFORNIA)
COUNTY OF ORANGE) ss
CITY OF COSTA MESA)
, Mayor
APPROVED AS TO FORM:
m
Kimberly Hall Barlow, City Attorney
I, BRENDA GREEN, City Clerk of the City of Costa Mesa, DO HEREBY
CERTIFY that the above and foregoing is the original of Resolution No. 2020-47 and
was duly passed and adopted by the City Council of the City of Costa Mesa at a regular
meeting held on the 19th day of May 2020, by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS: CHAVEZ, GENIS, MARK, REYNOLDS, STEPHENS,
AND FOLEY
NOES: COUNCIL MEMBERS: MANSOOR
ABSENT: COUNCIL MEMBERS: NONE
IN WITNESS WHEREOF, I have hereby set my hand and affixed the seal of the
City of Costa Mesa this 20th day of May 2020.
BRENDA GREEN, CITY CLERK
Resolution No. 2020-47 Page 3 of 3