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HomeMy WebLinkAboutResolution No. 2020-56_____________________________________________________________________________________ Sponsored by: Administration CITY OF KENAI RESOLUTION NO. 2020-56 A RESOLUTION OF THE CITY OF KENAI, ALASKA, APPROVING A GRANT DISBURSEMENT PROGRAM FOR INDIVIDUAL ASSISTANCE UTILIZING FUNDS FROM THE CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY (CARES) ACT. WHEREAS, on April 9, 2020 President Donald J. Trump approved a Disaster Declaration for the State of Alaska; and, WHEREAS, on May 20, 2020, the City Council enacted Ordinance 3130-2020 accepting Federal CARES ACT funding passed through the State of Alaska for expenditures in response to the COVID-19 Public Health Emergency; and, WHEREAS, the administration developed a grant disbursement program (Attachment A), which includes several grant programs to provide individual assistance to small businesses, commercial fishing permit holders, and City of Kenai residents in need of mental health services or mortgage rent relief, and marketing services for businesses utilizing funds from the CARES Act where help is needed due to impacts associated with the COVID-19 Public Health Emergency; and, WHEREAS, the grant disbursement program meets the intent of the CARES Act to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 COVID-19 Public Health Emergency and were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020; and, WHEREAS, the grant disbursement programs follow guidance for local governments issued by the federal government; and, WHEREAS, it is in the best interests of the City of Kenai to approve grant disbursement programs to ensure that relief funds are granted to businesses and nonprofits in need of critical funding now. NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA: Section 1. That the Grant Disbursement Program for Individual Assistance Utilizing Funds from The Coronavirus Aid, Relief, and Economic Security (Cares) Act is Approved as Attached or modified in similar form. Section 2. That this resolution takes effect immediately upon passage. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 1st day of July, 2020. Resolution No. 2020-56 Page 2 of 2 ATTEST: BRIAN GABRIEL, SR., MAYOR Establishing City of Kenai COVID-19 Relief and Recovery Grant Programs CITY OF KENAI CITY HALL 210 FIDALGO AVENUE KENAI, AK 99611 PAUL OSTRANDER CITY MANAGER POSTRANDER@KENAI.CITY 907.283.8222 LARRY PERSILY PROJECT LEAD LPERSILY@KENAI.CITY 907.283.8226 01 02 03 05 07 Contents Introduction Overview Small Businesses Nonprofits Individual Assistance 10Conclusion The Kenai City Council on May 20 approved an approach to distributing CARES Act funds received by the City, identifying broad categories, governmental, private, and nonprofit to help provide economic relief due to the public health emergency. The Administration focused on developing the three grant programs outlined in this document to provide meaningful impact in the community in an expeditious manner. Along with myself, the team included Project Lead Larry Persily (hired as a temporary employee for this effort), Finance Director Terry Eubank, City Attorney Scott Bloom, and Assistant to City Manager Christine Cunningham. We considered a wide range of programs and guidance along with the need for timely relief support with as few restrictions as possible to ensure relief funds can be spent as needed, balanced with accountability, and a simplified process that is in the best interests of both the City and applicant. I believe we have assessed the requirements and needs of the City soundly, producing a set of responsive programs to ensure we, as a City, succeed in expending funds to best serve the citizens of Kenai with responsible management. Introduction small businesses in Kenai* 410 We're focused on getting relief funds into the community we serve individual households 3,117 nonprofits serving the community 106 *Businesses with more than $50,000 in gross revenues reported on 2019 sales tax returns Overview The City of Kenai expects to receive $7,700,832 from the Federal Government passed through the State of Alaska for expenditures in response to and to aid in the economic recovery from the COVID- 19 Public Health Emergency. The Administration has evaluated an approach to distributing the economic recovery funds identifying how to best support the long-term recovery of our local economy. This approach includes an allocation plan for expenditure of these funds approved by City Council and designed to identify broad categories, governmental, private, and nonprofit where help is needed due to impacts associated with the COVID-19 Public Health Emergency. $2,500,000 – First Responder and Incident Management Team Payroll. This allocation includes a reimbursement of City payroll expenses for Fire Department, Police Department, Public Safety Dispatch, and Incident Management Team. $3,000,000 – Business and Nonprofit Entity Recovery Grants. This allocation includes grant awards to qualifying City of Kenai businesses or nonprofits affected by COVID-19 to offset impacts or to provide mitigation. The City will administer a grant program to determine eligibility and requirements that may apply. The grant program guidelines are included in this document. $300,000 – CARES Act Administration & Non-Payroll Expenditures. This allocation includes reimbursement of City expenses related to COVID-19, which have been documented. These expenses include City purchases to ensure the health and safety of City employees and residents due to the disaster. All expenditures from this department will follow all City code requirements. $900,832 – Individual Assistance Grants. This allocation will include grants to nonprofits to assist Kenai households impacted by COVID-19. The City will administer the grant programs to determine eligibility restrictions and requirements that may apply. The grant program guidelines are included in this document. $1,000,000 – City Resiliency and Recovery. This allocation will include City of Kenai capital projects or expenses intended to mitigate the impacts of COVID-19. All expenditures from this department will follow all City code requirements. 02 Small Business The grant categories for small businesses will be divided into four levels, based on each business’ 2019 total gross sales for four quarters as reported on their tax returns to the Borough: Up to $2,500 for businesses with 2019 revenues of $50,000 to $100,000 Up to $5,000 for businesses with 2019 revenues of $100,000 to $250,000 Up to $7,500 for businesses with 2019 revenues of $250,000 to $500,000 Up to $10,000 for businesses with 2019 revenues of more than $500,000 The initial application period for grants was open for two weeks, June 5, 2020 to June 19, 2020, and the City Council re-opened the application period from July 10, 2020 to July 17, 2020 to allow additional businesses to apply that did not apply in the first round. If the demand for grants in the second round exceeds the City’s available funds, the City reserves the right to prorate the grants to stay within available funding. A business must have been in existence as of January 1, 2020, to qualify. That would not exclude an existing business with a state license, and that has previously filed tax returns with the Borough even though it may have reported no operations in January 2020 (such as a seasonal business). For purposes of determining eligibility for a new business without a full year’s tax returns for 2019, the City would take gross sales reported for any quarters in 2019 or the first quarter 2020 and 03 extrapolate the numbers to estimate a full year’s sales for the business. Businesses that are not required to file sales tax returns with the Borough must provide a copy of their most recent federal income tax return or other proof of revenues as deemed suitable by the City review committee to determine the level of grant award they might qualify to receive. The business must be located within the City of Kenai, with a valid state business license and be current in its sales tax registration with the Kenai Peninsula Borough. The business owner(s) does not have to be a resident of the City of Kenai. The program is open to all qualifying businesses, regardless of whether they have applied for or have obtained any other state or federal COVID- 19-related assistance. The program will exclude from eligibility: C Corporations traded on a U.S. stock exchange or a corporate-equivalent entity traded on a foreign stock exchange, and businesses owned in whole or majority- owned by such a publicly traded corporation National chains that own and operate their premises in Kenai; franchise owned-and- operated businesses in Kenai would be eligible Businesses with a City lien or are in violation of a payment agreement with the City Businesses with a Borough lien for unpaid sales taxes. A sales tax delinquency would not disqualify a business from the grant program unless the borough has initiated a lien on that debt. Businesses that have entered into a payment plan with the Borough and are adhering to that plan would be eligible for the grant, so long as the lien has been lifted (continued on next page) Small Business Businesses currently in bankruptcy proceedings Businesses that lack a permanent physical presence in the City for the sale of goods or the provision of services with at least one worker assigned to that facility Marijuana businesses licensed under Alaska Statute 17.38. Businesses sharing physical quarters may each apply and qualify for their own grant, so long as each business has its own state license, files a sales tax return under its own name and does not share the same ownership with the other co- located businesses. Applicants are required to self-certify that they have been affected by the COVID-19 public health emergency and resulting economic impacts. The intent of the federally funded CARES Act program is to assist communities and businesses that suffered economic harm from the public health emergency. Impacts could include, though are not limited to, loss of sales due to mandatory shutdown, inventory loss, additional operating expenses of reopening and protecting staff and customers, including funds already spent for those purposes. Businesses will not be required to detail specifically (in dollars) how they have been affected. Business will be asked how they might use the money, making clear that the application question is voluntary and for informational purposes only to gauge community need and effectiveness of the program. 04 Applicants will be required to check a box that states they intend to remain in business into 2021. The grant funds must be fully expended by December 30, 2020. The applicant must certify that the information provided is true and accurate and that they agree to assist in the verification of information provided in the application and to provide additional information to the City, if requested. The application period will be open for two weeks. The City review committee will verify the information as the applications come in, but the City will hold off paying out any funds until after the deadline period has closed and the total amount of eligible requests is known. The review committee will determine whether the application is complete and the business is eligible under the program requirements. The committee will not judge the need or use of the money. An applicant denied by the review committee may appeal to the City Manager (in writing). Any appeal must be filed in writing by 5 p.m. the 10th calendar day after the day the applicant received notice from the City. It is the City’s intent, to the extent allowed by law, that the review committee’s work and discussions, and the applications themselves, will not be available to the public. The names of businesses that receive grants and the amount each receives will be considered a public record. The City reserves the right to amend any criteria or procedures as may be required if new state or federal guidelines are issued. Nonprofits The grants for nonprofits would be divided into three levels to help meet the needs of repairing the economic damage to nonprofits caused by the COVID-19 public health emergency: Up to $10,000 for nonprofits of less than $50,000 in annual revenue Up to $25,000 for nonprofits of between $50,000 and $250,000 in annual revenue Up to $50,000 for nonprofits of more than $250,000 in annual revenue The initial application period for grants was open for two weeks, June 5, 2020 to June 19, 2020, and the City Council re-opened the application period from July 10, 2020 to July 17, 2020 to allow additional nonprofits to apply that did not apply in the first round. If the demand for grants in the second round exceeds the City’s available funds, the City reserves the right to prorate the grants to stay within available funding. Annual income will be determined by the nonprofit’s most recent IRS Form 990 from 2018 or 2019. For those nonprofits that do not file with the IRS, the City will accept an audited financial statement or an unaudited statement by a third- party preparer. The program is open to nonprofits that provide services to residents of the City, regardless of where the nonprofit has its main office — though the nonprofit must have a physical or service presence within the City of Kenai — and regardless of whether the local chapter or affiliate is part of a larger statewide or national organization. Additional eligibility rules: The grants will be available only to IRS- certified 501 nonprofits (the full list of IRS 501 nonprofit categories will be on the application) The nonprofit must have been in operation serving City of Kenai residents since at least January 1, 2019 A majority of the group’s local board of directors or local advisory board and its officers must be Alaska residents. A local affiliate of a national organization must have a local advisory or governing board Faith-based nonprofits are eligible, so long as they provide services which are promoted and available to the general public without regard to religious affiliation Nonprofit organizations “that are principally engaged in teaching, instructing, counseling, or indoctrinating religion or religious beliefs, whether in a religious or secular setting, or primarily engaged in political or lobbying activities" are not eligible (as per 13 CFR § 120.110(k) in the Code of Federal Regulations) The grant funds must be fully expended by December 30, 2020. The program is limited to nonprofits economically damaged by the COVID-19 public health emergency. The nonprofit will be required to certify and briefly describe how it and/or its work has been affected, but will not be required to provide financial statements, budgets, receipts or other records detailing the financial damages. (continued on next page) 05 Nonprofits The program is open to all qualifying nonprofits, regardless of whether they applied or obtained any other state or federal COVID-19-related assistance. Applicants will be asked to provide a brief report to the City no later than one year after receipt of the grant funds, reviewing the use of the money. This is voluntary and is requested to assist the City in evaluating the impact of the program. A nonprofit cannot obtain a grant through the City’s CARES Act-funded grant program for nonprofits while also receiving a grant as a small business, even if the nonprofit also operates a business enterprise in Kenai. The applicant will need to certify that the information provided is true and accurate, and they agree to assist in the verification of information provided in the application and to provide additional information to the City, if requested. The application period would be open for two weeks. The City review committee will verify the information as the applications come in, but the City will hold off paying out any funds until after the deadline period has closed and the total amount of eligible requests is known. The review committee will determine whether the application is complete and the nonprofit is eligible under the program requirements. The committee will not judge the need or use of the money. 06 An applicant denied by the review committee may appeal to the City Manager (in writing). Any appeal must be filed in writing by 5 p.m. the 10th calendar day after the day the applicant received notice from the City. It is the City’s intent, to the extent allowed by law, that the review committee’s work and discussions, and the applications themselves, will not be available to the public. The names of businesses that receive grants and the amount each receives will be considered a public record. The City reserves the right to amend any criteria or procedures as may be required if new state or federal guidelines are issued. Individual Assistance The City of Kenai is establishing several grant programs to provide individual financial assistance to the community’s smaller businesses that did not qualify for the City’s Small Business Grant program, for commercial fishers, and for renters and homeowners. The City is also setting up a a program to assist residents in need of mental health services in the months ahead as the emotional strains of the COVID-19 public health emergency continue to weigh on the community; and a program to assist the business community with professional marketing support in light of decreased customer demand. The specifics of the programs are: Individual Assistance to Small Business The program provides grants of $1,000 each to small businesses with 2019 reported gross revenues (as per sales tax records or other acceptable forms of proof of revenues) of between $25,000 and $50,000. The eligibility requirements are similar to the City Small Business grant program that provided funds for business with revenues above $50,000 a year. 07 To qualify for the program, the smaller business: Must certify it was impacted by the COVID-19 public health emergency. Must be physically located in Kenai, with a valid state business license showing a Kenai address for the business (a home- based business would be eligible). Must not be in violation of a payment plan on a debt to the City. Must not be under a borough lien for unpaid sales taxes. Must not be in bankruptcy proceedings. Businesses must have been in existence in Kenai as of January 1, 2020, to qualify. Applicants will be required to briefly describe how the COVID-19 public health emergency has affected their operations but will not be required to provide detailed financial information on lost revenues due to shutdowns or additional expenses of reopening under public health guidelines. The application period will open Friday, July 10, and close at 5 p.m. Monday, August 31. Applications may be submitted online at the City website, by mail to City Hall or dropped off at City Hall. The City intends to review the applications and distribute the funds as quickly as possible. The City has set aside $150,000 for this program, subject to demand. (continued on next page) Individual Assistance Individual Assistance to Commercial Fishers The program will provide grants of $1,000 each to Alaska Commercial Fisheries Entry Commission permit holders who reside in the City of Kenai and reported landings in 2019 with revenues of at least $10,000. The program is open to commercial fishing permit holders but not crew members. Applicants must certify their fishing income was affected by the COVID-19 public health emergency (such as lower prices due to reduced market demand) and will be asked to briefly describe how the public health emergency has affected their operations but will not be required to provide detailed financial information on lost revenues due to shutdowns or decreased customer demand, or additional expenses of operating under public health guidelines. The application period will open Friday, July 10, and close at 5 p.m. Monday, August 31. Applications may be submitted online at the City website, by mail to City Hall or dropped off at City Hall. The City intends to review the applications and distribute the funds as quickly as possible. The City of Kenai has set aside $150,000 for this program, subject to actual demand. 08 Rental and Mortgage Relief The City of Kenai may work with the Alaska Housing Finance Corporation (AHFC) to benefit Kenai residents who qualified for the state rental assistance and mortgage relief program, or the City may set up its own program. AHFC set aside $10 million to provide one-time grants of up to $1,200 per household to assist Alaskans with rent or mortgage payments, and received more than 8,000 applications statewide for the AHFC Alaska Housing Relief program by the June 26, 2020 deadline, with 118 from Kenai households. The City may at a later date consider a rental/mortgage relief program similar to the AHFC program. The state program had a household income cap, and the maximum household income in Kenai to qualify for the program was $71,760 a year. The City has set aside $150,000 for this program, subject to available funding and demand. Mental Health Services The City will contract with mental health professionals in Kenai to provide counseling for individual residents affected by the COVID- 19 public health emergency and in need of mental health services. The program will cover a resident’s out-of-pocket expenses after any insurance or if they lack insurance coverage for the services. There will be no income limit for participating in the program. (continued on next page) Individual Assistance Mental Health Services (Con't) The City will announce the service provider after a procurement process and will publicize the availability of the service to the public. The intent is that the City will issue a contract for an amount not to exceed $50,000 for mental health counseling services, with individuals limited to no more than six counseling sessions to ensure that as many people as possible can participate. The contractor would bill the City for its services at a fixed hourly rate without identifying the individuals, only the total number of hours in a billing cycle. The identity of individuals would be held confidential by the service provider, the same as any other doctor-patient relationship. Individuals would inquire about the services and make appointments directly with the mental health provider; the City would not be involved in anything more than payments to the provider. The service would be provided prior to December 30, 2020, subject available funding and demand. The City expects to have the program available to the public by early August. 09 Small Business Development/ Marketing Services The City of Kenai will contract with a marketing service provider to assist local businesses that reported gross revenues of at least $10,000 in 2019 (as per sales tax records or other acceptable forms of proof of revenues) in their marketing, social media and online presence, as businesses focus on repairing the economic damage suffered during the COVID-19-related shutdown and restructuring their business to operate under the new rules of commerce and social activity. The City will announce the service provider after a procurement process and will publicize the availability of the service to the public. The intent is that the City will issue a contract for an amount not to exceed $50,000 for a City program that will provide a $1,000 credit to each eligible small business in Kenai that can be used with the marketing service provider. The eligibility requirements are similar to the City Small Business Grant and Individual Assistance for Small Business programs. The business must certify it was impacted by the COVID-19 public health emergency and be physically located in Kenai. Once the business has been approved for the program, the marketing service provider will provide an assessment and customize marketing services for each participating business limited to $1,000 in services covered by the City funding. The service would be provided prior to December 30, 2020, subject available funding and demand. The City expects to have the program available to the public by early August. Conclusion The City of Kenai will administer the grant programs without incurring the additional cost of an outside group or foundation to screen, process or assist in administration of the grant program, except for programs in with the City contracts with a service provider for individual assistance programs. In order to reach the small businesses and nonprofit organizations and individuals in the City that may be eligible, a successful community outreach strategy is necessary. This strategy will include the following: Press Releases to local media Direct mail to small businesses, nonprofits, permit holders or other groups Coordination with the Kenai Peninsula Economic Development District (KPEDD), Kenai Chamber of Commerce and Visitor Center (KCCVC), and Small Business Development Center (SBDC) Social Media posts Information about the programs as well as application forms, FAQs, a summary of the program and application process, and timetable will be provided on the City's website at www.kenai.city as well as a direct contact email and phone number for inquiries. 10 Individual Assistance Grant Application (Commercial Fishing) Permit holder’s name: Contact (if different from above): Contact address: (mailing) Contact phone number: Contact email address: Physical address of permit holder: (as it appears on permit application to verify residency) IRS Taxpayer Identification Number (TIN) (leave blank if using a Social Security Number and the City will contact you for information) Do you hold an Alaska Commercial Fisheries Entry Commission Permit? ☐ Yes ☐ No Did you have landings in 2019? ☐ Yes ☐ No Was your 2020 fishing income affected by the COVID-19 public health emergency? ☐ Yes ☐ No Briefly describe how your fishing income was affected. (Impacts may include, but are not limited to, lower prices due to decreased customer demand related to business shutdowns and stay-at-home orders, additional operating expenses to meet public health and safety guidelines.) ☐ I am requesting a $1,000 grant for a commercial fisheries permit holder with 2019 revenues of at least $25,000 in 2019. Section 1 – Applicant Information City: State: Zip: City: State: Zip: Section 2 – Grant Request Information How will the grant funds be used? (Optional for informational purposes only to gauge community need and program effectiveness) Please answer the following eligibility questions: Do you have an unpaid financial obligation to the City? ☐ Yes ☐ No Do you have a Borough lien for unpaid sales taxes? ☐ Yes ☐ No Are you currently in bankruptcy proceedings? ☐ Yes ☐ No (If you answered yes to any of the above questions, you are not eligible for a grant) Applications must be received or postmarked by 5 p.m. on August 31, 2020, and may be submitted by email to: grantsadmin@kenai.city or hand-delivered or mailed to City of Kenai City Hall at 210 Fidalgo Ave., Kenai, AK 99611, Attn: Grant Review Committee. Applications may be amended before the deadline. Incomplete applications will be rejected. Applicants will be notified of the status of their application via email to the contact person listed on the application. Questions about the grant program, application process, or application status must be directed to Larry Persily, City Project Lead, 283-8226, or email lpersily@kenai.city. If the demand for grants exceeds the City’s available funds, the City reserves the right to prorate the grants equally to all recipients to stay within available funding. It is the sole responsibility of the applicant to determine or to seek independent advice as to the tax implications of receiving the grant funds. As an official signer for the applicant, I certify that the information provided in this application is true and accurate and acknowledge that the funds will be spent by the required deadline of Dec. 30, 2020. I agree to assist in the verification of information provided in this application and to provide additional information to the city, if requested. Signed: ___________________________________________ Date: ____ ________ Print Name: Title: Individual Assistance Grant Application (Small Business) Business or applicant name: Contact (if different from above): Contact address: (mailing) Contact phone number: Contact email address: Physical address of business: (business must be located within the City of Kenai) IRS Taxpayer Identification Number (TIN) (leave blank if using a Social Security Number and the City will contact you for information) Was your business impacted by the COVID-19 public health emergency? ☐ Yes ☐ No Briefly describe how your business was affected by the public health emergency: (Impacts may include, but are not limited to, loss of sales due to mandatory shutdown, inventory loss, additional operating expenses of reopening and protecting staff and customers, including funds already spent for those purposes.) ☐ I am requesting a $1,000 grant for a business with 2019 revenues of $25,000 to $50,000 (based on the business 2019 total gross sales revenue for four quarters as reported on tax returns to the borough). How will the grant funds be used? (Optional for informational purposes only to gauge community need and program effectiveness) Section 1 – Applicant Information City: State: Zip: City: State: Zip: Section 2 – Grant Request Information Please answer the following eligibility questions: 1. My business is a C Corporation or a corporate-equivalent entity traded on a foreign stock exchange, and owned in whole or majority- owned by such a publicly traded corporation.  Yes  No 2. My business is a national chain that owns and operates a premise in the City of Kenai (individually owned-and-operated local franchises are eligible).  Yes  No 3. My business has an unpaid financial obligation to the City.  Yes  No 4. My business has a Borough lien for unpaid sales taxes.  Yes  No 5. My business is currently in bankruptcy proceedings.  Yes  No 6. My business lacks a permanent physical presence in the City of Kenai for the sale of goods or provision of services, with at least one worker assigned to that facility (a home-based business would be eligible).  Yes  No 7. My business is a marijuana business licensed under Alaska Statute 17.38.  Yes  No (If you answered yes to any of the above questions, your business is not eligible for a grant) Do you intend to remain in business into 2021? ☐ Yes ☐ No Applications must be received or postmarked by 5 p.m. on August 31, 2020, and may be submitted by email to: grantsadmin@kenai.city or hand-delivered or mailed to City of Kenai City Hall at 210 Fidalgo Ave., Kenai, AK 99611, Attn: Grant Review Committee. Applications may be amended before the deadline. Incomplete applications will be rejected. Applicants will be notified of the status of their application via email to the contact person listed on the application. Questions about the grant program, application process, or application status must be directed to Larry Persily, City Project Lead, 283-8226, or email lpersily@kenai.city. If the demand for grants exceeds the City’s available funds, the City reserves the right to prorate the grants equally to all recipients to stay within available funding. It is the sole responsibility of the applicant to determine or to seek independent advice as to the tax implications of receiving the grant funds. As an official signer for the applicant, I certify that the information provided in this application is true and accurate and acknowledge that the funds will be spent by the required deadline of Dec. 30, 2020. I agree to assist in the verification of information provided in this application and to provide additional information to the city, if requested. Signed: ___________________________________________ Date: ____ ________ Print Name: Title: