Title
Presentation on the Tri-City Collin County Operational Plan for Economic Normalization (O.P.E.N.) Business Grant Program (Collin County CARES Act Funding).
Summary
COUNCIL GOAL: Direction for Strategic & Economic Growth
MEETING DATE: June 16, 2020
DEPARTMENTS: City Manager’s Office
McKinney Economic Development Corporation (MEDC)
CONTACT: Kim Flom, Assistant City Manager
Peter Tokar, MEDC President & CEO
ITEM SUMMARY:
• The City of McKinney has been working with Allen and Frisco in the development of a shared business grant program to utilize a portion of the Collin County CARES Act Direct Allocation.
BACKGROUND INFORMATION:
• Collin County received $171.4M in CARES Act Funding from the Department of the Treasury to provide ready funding to address unforeseen financial needs and risks created by the COVID-19 public health emergency.
o $50M Direct Cost Program allocated to cities based on Census population from COVID related costs ($10,098,347.55 allocated to McKinney).
o $45M - Emergency Housing and Living Program for the entire County, distributed through the cities of McKinney, Plano, Frisco and Allen ($30M initial funding with $15M in reserve). Currently being administered through the EHLA Program.
o $5M for COVID 19 testing for uninsured residents of the County
o $71.4M Unallocated by the County
• On May 19, the Council approved an Interlocal Agreement with Collin County to provide the framework for the distribution of CARES Act Funding (Direct Cost Program $10M), from the Department of the Treasury, through Collin County, to the City of McKinney.
• CARES Act Direct Allocation funds can be used for economic support to those suffering from business interruption due to COVID-19 related business closures.
• The City and MEDC have been working with Frisco and Allen in order to develop a tri-city approach, titled O.P.E.N., across the three communities.
• A shared approach has the following benefits:
o Pooled funds leverage the ability to select a qualified third-party administrator utilizing reasonable administration fees.
o Owners of businesses with locations in several communities will not have to work through several different application types.
o Collaborative effort shortens the deployment schedule of the grant program.
o Unified program presents a shared approach in using the same source of federal funds, which may be beneficial in the event of future review or audit.
• O.P.E.N. parameters are still under final review, but include:
• McKinney proposed maximum grant: Full Closure = $25,000. Partial Closure = $18,750. Allen proposed maximum grant = $25,000. Frisco proposed maximum grant = $50,000.
• Staff proposes allocating $3,000,000 to $5,000,000 of CARES Act Direct Allocation funding for this program. At that range, the O.P.E.N. program could fund up to 160 to 200 businesses at the maximum grant allocation of $25,000.
• Award based on review and confirmation of eligible expenses:
o Payroll
o Contract Labor
o Supplier Payments
o Rent, lease, mortgage interest payments (principal payments are not eligible expenses)
o Insurance
o New or expanded technology applications/Wi-fi
o Utility payments for business properties
o Critical business operation costs
o PPE and sanitation supplies/equipment
o Interest on other business debt obligation
• Eligible businesses:
o Must have endured a full or partial closure due to COVID-19.
o 100 or fewer employees per business location.
o No more than $10 Million in Gross Annual Revenue per business location.
o Must submit required business documentation.
• Ineligible businesses:
o Non-Profits
o Non-Storefront & Home-Based Businesses
o Sexually/Adult-Oriented Businesses
o Professional Services deemed essential by local/state government
o Lobbying organizations and political organizations subject to Internal Revenue Code 527
o Gambling- related Businesses, including casinos, racing operations or other activities whose purpose involves gambling
o Any businesses engaged in illegal activities under federal, state or local laws
o Any business that is otherwise prohibited by federal or Texas law
o Any business that is ineligible or precluded to receive federal or State of Texas funding under federal law (including but not limited to the CARES Act) or Texas law
o Multi-level marketing concerns
o Governmental/taxing agencies/departments
o Businesses in default or arrearage on past or current federal or state financing or funding programs.
o Businesses involved or affiliated with personal or corporate indictment, arraignment or conviction of criminal offenses.
• Timing: If approved, the grant application window is anticipated to open sometime in July.
• Administration: A third-party administrator (TPA) is proposed to create the application, conduct reviews and issue payment. Administrative fees are not anticipated to exceed 10%.
• The tri-city team continues to work through some of the details of the guidelines. Any changes proposed will be shared verbally with Council at work session.
FINANCIAL SUMMARY:
• As proposed, this program would utilize between $3,000,000 to $5,000,000, approximately 30%-50% of the Direct Cost Program allocation of CARES Act funding from Collin County.
BOARD OR COMMISSION RECOMMENDATION:
• N/A