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Resolution No. 2021-05 Relating to Establishing a small business relief grant program-Approved 022321Page 1 of 5 RESOLUTION NO. 2021-05 A RESOLUTION of the City of Bainbridge Island, Washington, establishing a small business relief grant program to provide business expense assistance in response to the public health emergency resulting from the COVID-19 pandemic. WHEREAS, starting in the first and second quarter 2020, the COVID-19 public health pandemic, associated health mandates, and business regulations began having detrimental impacts on specific sectors of the Bainbridge Island economy such as small retail, hospitality, fitness, live venue, tourism, and other industries; and WHEREAS, the detrimental impacts to the Bainbridge Island economy continue in 2021; and WHEREAS, while 2021 may be the year that the COVID-19 health pandemic and its associated economic damage begins to be ameliorated, many Bainbridge businesses remain open in a limited capacity or are otherwise financially or operationally constrained; and WHEREAS, the City Council believes a functioning local economy is critical to protect the health and wellbeing of Bainbridge Island residents, as the failure of small businesses due to the pandemic will create a serious hardship on owners and individuals employed by those businesses, and create additional financial burdens on government services by increasing demand for government support to individuals who are unemployed coupled with a decrease in revenue for the City due to the pandemic; and WHEREAS, the City Council desires to establish a Small Business Relief Grant Program, the focus of which is to provide short-term economic stability via monetary grants to qualifying businesses located within the City’s limits; and WHEREAS, the City Council finds that this program will serve fundamental public and governmental purposes, such as protecting the public health and welfare, by establishing a grant program whereby, in exchange for cash grants, qualified small businesses will be able to stay open and provide the City’s residents with jobs, services, and/or goods, as well as public services via tax revenue; and WHEREAS, the City Council also finds that this program will serve fundamental public and governmental purposes by assisting small businesses survive significant detrimental impacts from the pandemic, including due to temporary or partial closures, and such grants will thereby help reduce economic hardship caused by this public health emergency, and the program will also encourage small businesses to comply with public health guidelines to protect the public health and welfare; and WHEREAS, in exchange for receiving grants under this program, recipients will be required to provide specific information to the City and to certify that such information is true Page 2 of 5 and can be verified, including related to significant negative financial impacts from the pandemic on the business, and how the grant funds will be used to address such impacts; and WHEREAS, the City Council has directed City staff to build a program and utilize general funds for this program to accomplish the fundamental public and governmental purposes above described; and WHEREAS, the City has limited resources, including limited available personnel, to administer the program, and desires to partner with a qualified service provider capable of serving as grant administrator, selected based on its unique qualifications for the performance of this service during this declared state of emergency; and WHEREAS, the City has developed the grant program and eligibility requirements based on similar programs utilized in the City of Bremerton, City of Port Orchard, and Kitsap County; and WHEREAS, the City shall allocate no more than $205,000 of funding for this program, with a maximum of $5,000 allocated to a service provider for the administration of the program and $200,000 for the relief grants to small businesses. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAINBRIDGE ISLAND DO RESOLVE AS FOLLOWS: Section 1. The City Council hereby adopts the recitals expressed above as Findings of Fact in support of this Resolution. Section 2. The City Council hereby establishes the Bainbridge Island Small Business Grant Relief Program and allocates City general funds in the amount of $205,000 to be utilized for economic recovery in response to the impacts resulting from the COVID-19 pandemic. The City Council specifically directs that $200,000 be disseminated pursuant to the program criteria attached hereto as Exhibit A, and that $5,000 be utilized to contract with a service provider to function as grant administrator. Final selection of the grant recipients shall be determined by the City Manager or designee, based on the parameters set forth in Exhibit A. Section 3. The City Council authorizes the City Manager or designee to adopt any necessary administrative processes to implement this Resolution and the attached policy set forth in Exhibit A, in compliance with the provisions of the City’s regulations and state law. Section 4. Severability. If any one or more sections, subsections, or sentences of this Resolution are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this Resolution and the same shall remain in full force and effect. Section 5. This Resolution shall take effect and be in force immediately upon its passage. Page 3 of 5 PASSED by the City Council this 23rd day of February, 2021. APPROVED by the Mayor this 23rd day of February, 2021. By: Rasham Nassar, Mayor ATTEST/AUTHENTICATE: By: FILED WITH THE CITY CLERK: February 19, 2021 PASSED BY THE CITY COUNCIL: February 23, 2021 RESOLUTION NO.: 2021-05 Attached: Exhibit A Page 4 of 5 Exhibit A Bainbridge Island Small Business Grant Program Qualifications: To be eligible for this grant program, applicants must: • Be actively licensed with the City of Bainbridge of Island. • Have a physical commercial location in the City of Bainbridge of Island established on/or before March 1, 2020 and have been opened since March 1, 2019 or earlier (i.e., businesses had to be open a full year pre-COVID). • Have no more than 50 full-time equivalent employees (defined as 34-40 hours weekly) and annual gross revenues of up to $5,000,000. • Be (and have been) in compliance with Governor Inslee’s Healthy Washington and previous similar Safe Start and other COVID-19 related guidelines. • Demonstrate negative financial impact due to COVID-19: o Commonly, negative financial impact will be determined by comparing annual gross revenue between 2019 and 2020 annualized; that deficiency will determine the amount available for the grant. ▪ Note: Certain rare exceptions may occur to the above example (e.g., different time periods, net income evaluations) to establish negative financial impact. This will necessitate backup documentation. o Negative impact shown will determine the amount to be funded. Backup documentation of that negative financial impact (e.g., annual profit and loss statements, IRS statements) must be provided. Assessment and Recommendation: At its best judgment and discretion, based on the negative financial impact and the factors below, KEDA will recommend a list of grant awardees. Factors for such assessment are: • All applications will be reviewed for eligibility criteria and verified for application requirements. • Grant amounts will be based on financial impact, total number of eligible applicants, available funding for this small business grant program, and other criteria. • Applicants will be required to provide a detailed explanation describing how COVID-19 impacted them negatively and how grant funds will be used. Applicants are not required to submit receipts. However, all receipts and documentation related to this grant (if awarded) must be kept by the business for potential follow-up and review for six (6) years and furnished upon request. • Additionally, priority will be given to industries most negatively affected by the pandemic, such as hospitality, tourism, fitness, and small retail. KEDA will submit its list to the City of Bainbridge Island, which will then finalize the list for funding. Page 5 of 5 Use of Proceeds • In general, eligible businesses may use this funding for any activity considered an ordinary and necessary eligible business expense allowed by the Internal Revenue Service (“IRS”) tax rules. Conversely, businesses SHALL NOT use the funding for any expense not considered such. Examples of Disallowed Expenses (Not a comprehensive list) • Wages, bonuses, or draws by an owner of an eligible business or any personal (non- business) expenses by such an owner. • Capital expenses. • Entertainment expenses (even if allowed by IRS tax rules). Documentation Required • Submitted application (via online portal); • Bainbridge business license; • Washington UBI Number; • Completed and signed IRS W9 Form; • Backup documentation showing significant negative financial impact from COVID; and • All receipts and documentation related to this grant (if awarded) must be kept by the business for potential follow-up and review for six (6) years and furnished upon request. Failure to submit supporting documentation if requested may disqualify the recipient and result in the forfeiture and return of the grant funds to the City.