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HomeMy WebLinkAboutOrdinance No. 3190-2021J ", KENAI CITY OF KENAI ORDINANCE NO. 3190-2021 Sponsored by: Administration AN ORDINANCE OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, INCREASING ESTIMATED REVENUES AND APPROPRIATIONS IN THE GENERAL FUND TO PROVIDE A GRANT DISBURSEMENT PROGRAM FOR SMALL BUSINESSES THAT DID NOT PREVIOUSLY APPLY FOR FULL ASSISTANCE FROM THE CITY IN 2020. 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, on June 3, 2020, the City Council passed Resolution 2020-39, approving a $3,000,000 Grant Disbursement Program for Small Businesses and Non -Profit Organizations Utilizing Funds from the CARES Act with an application period of June 4, 2020 to June 19, 2020; and, WHEREAS, on July 1, 2020, the Council amended the Grant Disbursement Program to re -open the application period from July 10, 2020 to July 17, 2020 to allow additional businesses and non- profits impacted by the COVID-19 pandemic to seek relief without materially affecting available future funding; and, WHEREAS, on September 2, 2020, the Council amended the Grant Disbursement Program to provide a second round of grants, with an application period of October 1, 2020 to October 30, 2020 that increased the amount available to City of Kenai businesses so that the total of the City grants equaled the size of the business grants offered by the Kenai Peninsula Borough to borough businesses located outside of the City limits; and, WHEREAS, Administration has reached out to numerous businesses that did not apply during one or all of the grant application periods to determine why they did not apply, with the primary reasons given being that their business was faring well at the time, they felt the funds should go to other businesses that had a greater need, and in some cases missing the opportunity to apply; and, WHEREAS, the magnitude and length of the COVID-19 pandemic is still unknown, and its associated negative impacts to our economy are still creating uncertainty for local businesses; and, Ordinance No. 3190-2021 Page 2 of 2 WHEREAS, providing businesses that previously did not receive full assistance through the City's 2020 programs an opportunity to apply for those programs will benefit businesses that previously did not have a need, or missed the grant opportunities for some other reason; and, WHEREAS, the success of the City is dependent upon the success of the local economy and its businesses and providing an opportunity for local businesses that previously did not apply for full assistance to apply for our grant disbursement program is in the best interest of the City and its residents. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, as follows: Section 1. That the grant disbursement program for small businesses that did not previously apply for full assistance from the City in 2020 is approved as attached or modified in similar form. Section 2. That the estimated revenues and appropriations be increased as follows: General Fund: Increase Estimated Revenues — Appropriation of Fund Balance $224�Q0 Increase Appropriations — Non -Departmental Grants to Others Section 3. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 4. Effective Date: That pursuant to KMC 1.15.070(f), this ordinance shall take effect immediately upon enactment. ENACTED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 17th day of February, 2021. ATTEST: m e Heinz, CMC, City Cler Approved by Finance: IZZ �� S �.RQAN GABRIEL SR., MAYOR V�.ENA 040 ,109, Introduced: February 3, 2021 Enacted: February 17, 2021 Effective: February 17, 2021 New Text Underlined; [DELETED TEXT BRACKETED] KENAI City of Kenai 1 210 Fidalgo Ave. Kenai, AK 99611-7794 1907.283.7535 1 www.Icenaixity MEMORANDUM TO: Mayor Gabriel and Council Members FROM: Paul Ostrander, City Manager DATE: January 27, 2021 SUBJECT: Ordinance 3190-2021 — Providing a Grant Opportunity for Businesses That Did Not Previously Apply For Full Assistance Since COVID-19 began impacting the daily lives of our residents in March of 2020, the administration has worked diligently to identify areas of need in the community and recommend ways in which the City could help meet those needs. When Federal CARES Act funding was made available through the State, and later, when additional funding was provided through the Kenai Peninsula Borough, it was clear that utilizing a portion of these funds to support our business community was going to be essential to offset the negative economic impacts of the pandemic. City Council approved a first round of grants that included small businesses and non-profit entities for the period of June 4-19, 2020, and re -opened the first round for an additional period of July 10-17,2020. Council then authorized a second round of grants for small businesses for the period of October 1-30, 2020. Depending on the business' total gross sales, Kenai businesses were eligible for up to $35,000 in grants from the City through these programs. Since the last grant program's closure on October 30, 2020, multiple businesses have communicated with the administration that they did not apply for one or either round of grants. Some businesses indicated that they only applied for the first round of grants based on need at the time. The reasons these businesses did not apply for full assistance varies, but as the pandemic drags on into 2021 and our local economy continues to suffer, providing these businesses another opportunity to apply for grants they would have qualified for under the City's Relief and Recovery grant programs is appropriate. Ordinance 3190-2021 provides additional grant funds where they are needed to businesses in our community without providing grants in excess of what other City businesses received or what was offered to Kenai Peninsula Borough businesses outside of the City limits. Your consideration is appreciated Small Business Grant Small Business Grant Program The City is offering an additional grant opprtunity for small businesses that did not previously apply for the maximum amount of grant funding they were eligible to recieve from the City through its Relief and Recovery grant programs in 2020. The total grant funds available for each eligible business in the City of Kenai is equal to the size of the grants offered by the Kenai Peninsula Borough to businesses located outside of City limits. The minimum revenues a business needs to be eligible to receive a grant is $20,000, consistent with the Borough's program. Businesses that received grants in Round 1 but did not apply for Round 2 of the City program will need to reapply for this program — the application form will request additional information. Businesses that did not apply in Round 1 or Round 2 will be eligible to apply for this program to receive the maximum grant amount. The City will begin accepting applications on February 22, 2021 and the application period will close on March 22, 2021. The grant categories will be divided into five levels based on each business' 2019 total gross sales for four quarters as reported on their tax returns to the Borough. These amounts are the maximum a qualifying business was eligible to receive rom the City through its Relief and Recovery Grant Program in 2020 in Round 1 and Round 2: • Up to $1,750 for businesses with 2019 revenues of $20,000 to $50,000 • Up to $3,500 for businesses with 2019 revenues of $50,000 to $100,000 • Up to $8,750 for businesses with 2019 revenues of $100,000 to $250,000 • Up to $17,500 for businesses with 2019 revenues of $250,000 to $500,000 • Up to $35,000 for businesses with 2019 revenues of over $500,000 Similar to Round 1 and Round 2 of the City's Relief and Recovery Grant Program, 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). (continued on next page) The City is offering a grant for small businesses that did not previously apply for the maximum amount of grant funding they were eligible to recieve in Round 1 and Round 2: Business Revenues $20K - $50K $50K - $100K _ $100K - $250K $250K -$500K >$5ooK 0 Round 1 Grant Round 2 Grant Amount Amount Total Grant Amounts $1,750 $3,500 $8,750 $17,500 $35,000 Small Business Grant 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 and the first quarter 2020 and 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 amount of the grant for businesses with locations inside and outside the City will be based solely on their revenues from the business location within the City of Kenai. 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. That could be an office, warehouse, shop or other premise owned, leased or rented and operated by the applicant. The business owner(s) does not have to be a resident of the City of Kenai. 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. Such so -located businesses under the same owner will be eligible for one grant. The program will exclude from eligibility the same list of businesses excluded in the previous program, including: • 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 Applicants will be required to certify that they have been affected by the COVID-19 public health emergency and resulting economic impacts. Because the grants in Round 2 were significantly larger than in Round 1, the City will ask for additional information of applicants for this program as well. This includes information on economic hardship suffered by the business, either lost revenue or additional costs of operations; and information on other similar financial assistance received from the Borough or other cities on the Kenai Peninsula. If the demand for grants for this program Businesses that have applied for or have obtained exceeds the City's available funds, the City any other state or federal COVID-19-related reserves the right to prorate the grants to assistance are not necessarily disqualified from stay within available funding. the City program.