Title
Recommendation to Modify Eligibility Requirements for Non-Profit Organizations Applying for Alameda Strong Community Relief Fund by Including Paycheck Protection Program Recipients and Adding a Requirement Related to the Maximum Number of Employees Employed by the Non-Profit Organization. (Community Development 256)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
On May 19, 2020, the City Council approved the creation of the Alameda Strong Community Relief Fund (Relief Fund) to provide grants or other types of relief to small businesses, non-profit organizations, and residential renters that have been financially impacted by the COVID-19 pandemic. At that time, the City Council gave direction to staff to restrict eligibility for non-profit organizations to those that have not received federal funding from the newly created Paycheck Protection Program (PPP). This restriction would help ensure that Relief Fund is used to support smaller organizations in greater need of financial support.
Since that time, the PPP has been modified, allowing a greater number of smaller non-profit organizations to be funded. With PPP funding having become available to smaller agencies, staff recommends lifting the PPP restriction and replacing it with an eligibility requirement. That requirement would specify that organizations with two or more locations can have no more than fifty (50) full-time equivalent (FTE) employees in total and organizations with one location can have no more than twenty five (25) FTE employees. This new eligibility requirement would meet the City Council’s policy objective of ensuring that the Relief Funds would go to smaller organizations that are more financially impacted by the pandemic.
BACKGROUND
At its May 19, 2020 meeting, the City Council approved the creation of the Relief Fund, a community funding source to provide additional financial support for local small businesses, non-profit organizations, and residential renters impacted by the COVID-19 pandemic. Individuals, corporations, and/or foundations could make a general (not category specific) Relief Fund donation or make a targeted donation to specifically aid either small businesses, nonprofit organizations, or residential renters. Contributions to the general Relief Fund would be allocated based on the following formula: 60 percent to small businesses; 20 percent to non-profit organizations; and 20 percent to residential renters.
Since May 2020, the Relief Fund has raised approximately $287,000 and the Fund has awarded 19 small business grants (ranging from $3,750 to $7,500); and 16 residential renter grants (ranging from $759.53 to $7,000). The Relief Fund has now accumulated approximately $29,000 for non-profit organizations, which would fund five or so grants of approximately $5,000 each.
DISCUSSION
When the City Council authorized the Relief Fund program, it also gave direction to staff on the eligibility requirements for non-profit organizations. The City Council wanted to ensure that the grants went to smaller organizations, where the infusion of grant funds would have a greater impact. Thereby, the City Council directed staff to restrict eligibility to those that have not received federal funding from the then newly created PPP. The PPP is a federal business loan program created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help businesses, self-employed workers, sole proprietors, and non-profit organizations to continue paying their workers. The program is implemented by the federal Small Business Administration (SBA). The original PPP program included $349 billion for small businesses and ran out of funding within 2 weeks of opening applications.
Following the May City Council meeting, the PPP application period was extended multiple times and an additional $604 billion in funding added, allowing a greater number of smaller non-profit organizations to be funded. The SBA also established on February 24, 2021 a special 14-day exclusive PPP loan application period for businesses and non-profits with fewer than twenty (20) employees.
In February 2021, the City conducted an online Business Pulse Survey (before the exclusive PPP application period for small non-profit organizations). Of the five Alameda non-profit organizations that responded, three stated that they had received PPP funding. All three non-profits have 20 or fewer employees. One of the respondents has between one and five employees; another has between six and ten employees.
With more widespread funding becoming available to smaller agencies, staff recommends lifting the PPP restriction and replacing it with an eligibility requirement that organizations with two or more locations can have no more than fifty (50) full-time equivalent (FTE) employees in total and organizations with one location can have no more than twenty five (25) FTE employees.
This new eligibility requirement would meet the City Council’s policy objective of ensuring that Relief Funds would go to smaller organizations more financially impacted by the pandemic. The proposed non-profit grant eligibility requirements would include the requirements described below:
1. The organization must be physically located in Alameda. If a national organization, only the local chapter can apply and be eligible for the grant.
2. The organization must have been in operation in Alameda for no less than two (2) years.
3. The organization must have fifty (50) or fewer full-time equivalent employees at two or more locations in total and a maximum of 25 full-time equivalent employees at one location.
4. The organization must demonstrate a minimum gross income of $10,000 for 2019 by providing a 2019 income statement.
5. The organization must be a 501(c)(3) or 501(c)(6) nonprofit agency.
6. The organization must demonstrate significant financial hardship due to the COVID-19 pandemic by either:
a. showing it has experienced a significant loss of 25% or more in gross income due to COVID-19; or
b. demonstrating that its expenses have increased by 25% or more due to the pandemic.
7. The organization must provide a written response explaining its financial hardship related to the COVID-19 pandemic as follows:
a. Please provide a brief summary of your organization’s work (Up to 70 words)
b. Who does your organization serve? Please include the number of individuals served in Alameda, and whether the individuals you serve are particularly vulnerable to COVID-19 or the resulting economic fallout. (Up to 100 words)
c. What is your organization doing to address critical needs related to COVID-19? Please include metrics or examples to demonstrate that you are successfully meeting those needs. (Up to 250 words)
d. Why would funding from the Alameda Strong Relief Fund be important to your work? (Up to 100 words)
e. What else do you want us to know about your organization and your response to COVID-19 in Alameda? (Up to 100 words)
8. The organization must have a current City Business License and have paid the Business Improvement Area assessment, if located in a Business Improvement Area.
If the City Council approves of the proposed eligibility requirements, staff will proceed with opening up the application process. The applications will be reviewed and ranked by a committee, established by the City Manager, with representatives from the Community Development Department, the Recreation & Park Department, larger local nonprofit organizations not eligible for the grant, and the Social Service Human Relations Board. The City Manager will establish detailed criteria for the committee’s review consistent with the goals and objectives of the program.
ALTERNATIVES
• Approve the non-profit eligibility requirements for the Relief Fund grants, as described in this report.
• Approve the eligibility requirements as described, but leave the PPP restriction in place.
• Modify any of the proposed eligibility requirements as described in this report.
FINANCIAL IMPACT
There is no financial impact from the application and grant process for the Relief Fund non-profit grants. All funding is raised through donations and the grants are administered using existing staff resources.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
The Relief Fund is consistent with the urgency ordinance declaring the local emergency. The Alameda Municipal Code Chapter 2-24.2 defines a local emergency as “the actual or threatened existence of conditions of disaster or of conditions of disaster or of extreme peril to the safety of persons and property within this jurisdiction . . . requiring the combined forces of other political subdivisions to combat.”
ENVIRONMENTAL REVIEW
This action is not a project for the purposes of the California Environmental Quality Act (CEQA) pursuant to CEQA guidelines section 15061(b)(3) as there is no possibility that this action may have a significant effect on the environment.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Modify eligibility requirements for non-profit organizations applying for Alameda Strong Community Relief Fund by including Paycheck Protection Program recipients and a requirement related to the maximum number of employees employed by the non-profit organization.
CITY MANAGER RECOMMENDATION
The City Manager recommends approval of the proposed changes.
Respectfully submitted,
Lisa Maxwell, Community Development Director
By:
Eric Fonstein, Development Manager
Financial Impact section reviewed,
Annie To, Finance Director
cc: Eric Levitt, City Manager
Gerry Beaudin, Assistant City Manager