CC 2021-03-09_10a Continued COVID 19 Relief Program_Allocation of SB 1090 Funds
MEMORANDUM
TO: CITY COUNCIL
BY: WHITNEY MCDONALD, CITY MANAGER
SUBJECT: CONTINUED CONSIDERATION OF APPROVAL OF A COVID-19
RELIEF PROGRAM, INCLUDING ALLOCATION OF SB 1090 FUNDS
AND/OR OTHER GENERAL FUNDS TO THE PROGRAM
DATE: MARCH 9, 2021
SUMMARY OF ACTION:
Consideration of approval of a COVID-19 Relief Program, including allocation of a
portion of the City’s SB 1090 funds to support business assistance programs and
consideration of allocating other General Funds to the Program. This item is continued
from the February 23, 2021 Council meeting.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Pursuant to a December 2016 Settlement Agreement between Pacific Gas & Electric
(PG&E) and the local San Luis Obispo County governmental entities and, later, SB 1090,
the City has received one-time Economic Development Funds (EDF) of $747,422 to
support the City’s economic development needs in light of the planned closure of the
Diablo Canyon Power Plant. In addition, the City will receive a total of $271,826 in
Essential Services Mitigation Funds (ESMF), disbursed in eight annual payments of
$33,978.26, which began in 2018. To date, the City has received $101,934.78 in ESMF
payments. These funds are kept in a separate trust account and have not yet been
allocated by the City to any specific activities or programs. A portion of these funds may
be allocated to the COVID-19 Relief Program.
As stated in the Year-End Financial Status Report for Fiscal Year 2019-2020, the City
ended Fiscal Year 2019-2020 with a fund balance reserve of 24.6%, exceeding the City’s
adopted reserve goal of 20%. This beginning fund balance reserve will enable the City to
realize a fund balance reserve of 23.8% in Fiscal Year 2020-2021, if expenditures remain
on target. This equates to an anticipated total fund balance reserve of $4.3 million in
Fiscal Year 2020-2021, $580,000 more than the 20% target.
The City’s water, sewer and sanitation customers have incurred approximately $105,000
in overdue charges and late penalties since April 2, 2020, when the Governor issued an
executive order suspending the discontinuation of service for nonpayment during the
COVID-19 crisis, resulting in a revenue shortfall to the water, sewer, and sanitation funds
of $53,800, $7,600 and $19,100 respectively. Overdue late penalties equated to $24,500.
Funds may need to be transferred from the General Fund to the water and/or sewer funds
Item 10.a. - Page 1
CITY COUNCIL
CONTINUED CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF
PROGRAM, INCLUDING ALLOCATION OF SB 1090 FUNDS AND/OR OTHER
GENERAL FUNDS TO THE PROGRAM
MARCH 9, 2021
PAGE 2
in the event that these funds experience a deficit during the fiscal year, including any
deficit that may result from any waivers of penalties granted through a COVID-19 Relief
Program.
RECOMMENDATION:
It is recommended the City Council consider approving a COVID-19 Relief Program,
allocating funding to the Program, including a portion of the City’s SB 1090 funds,
establishing funding amounts for each program, establishing limits on the amount of each
grant in each program, and providing direction on program components, as described in
more detail in the February 23, 2021 staff report (Attachment 1).
BACKGROUND:
On February 23, 2021, Council considered an item to approve a COVID-19 Relief
Program, including allocation of funding for that program. After discussion, the item was
continued for further consideration on March 9, 2021. The staff report from that item is
provided as Attachment 1 for ease of reference. In addition, staff has supplied clarifying
points and information below regarding the potential Water and Sewer Late Penalty Relief
Program and a proposal from the South County Chambers of Commerce (Chamber) for
administration of certain components of the COVID-19 Relief Program.
ANALYSIS OF ISSUES
Water and Sewer Late Penalty Relief Program
Following the discussion of this item during the February 23, 2021 Council meeting, staff
completed additional analysis regarding a potential Water and Sewer Penalty Relief
Program to further evaluate its feasibility. The City’s current budget assumes that the City
will receive a total of $53,000 in late penalty revenue in the water and sewer enterprise
funds, $45,000 in the water fund and $8,000 in the sewer fund. These assumptions are
based on consistent receipt of penalties over the past several years. Any waivers of late
penalties will negatively affect revenue projections in these funds and may require budget
adjustments to account for these deficits. ESMF or General Fund reserves may be used
to fund any such adjustments. However, other considerations described below may
counsel against implementing a penalty waiver program at this time.
A penalty relief program that restricts participation to certain criteria, such as household
income or experienced joblessness related to COVID-19, etc., will require significant staff
time to administer. After further discussions with Administrative Services and Public
Works staff, it was determined that a program that waives all penalties incurred during a
specific time period would be the most efficient and administratively feasible option.
The majority of City water, sewer and sanitation customers have paid their bills on time,
and many have paid late penalties since the water disconnection moratorium was
established in April 2020. Council waived late penalties in April and May 2020 in light of
Item 10.a. - Page 2
CITY COUNCIL
CONTINUED CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF
PROGRAM, INCLUDING ALLOCATION OF SB 1090 FUNDS AND/OR OTHER
GENERAL FUNDS TO THE PROGRAM
MARCH 9, 2021
PAGE 3
the COVID-19 pandemic and, since that time, the City has received $32,100 in late
penalties from water, sewer and sanitation customers. In the interest of equity, the City
may wish to provide credits to all customers who paid late penalties between June 2020
and February 2021 so that some customers are not rewarded while others have paid their
account balances. In this event, a Water and Sewer Penalty Relief Program may require
a total of $56,600 in relief for customers ($24,500 in current unpaid late penalties +
$32,100 in paid late penalties from June 2020 through February 2021).
Meanwhile, customers have experienced savings in some respects since April 2020.
Water rates have remained stagnant and have not increased since 2019 due, in part, to
COVID-19 considerations. In addition, some customers have experienced savings by not
incurring the ordinary reconnection fee following disconnection of service for nonpayment.
Without the current moratorium on disconnection of water service, the City would have
utilized the disconnection process to ensure payment of past due bills. Once
disconnected, a customer is ordinarily required to pay a fee of $90 to reconnect service,
which pays for the staff time involved with turning on and off service to the customer.
Customers have avoided these costs since April 2020.
Staff recommends that the existing payment plan options offered by the City be modified
slightly and include:
No additional late penalties will accrue
No interest will accrue (consistent with current practice)
Payments may occur over a twelve- to eighteen-month period
It is staff’s hope that offering payment plans that ensure no additional late penalties will
be charged while the customer is paying as part of a plan will provide additional incentive
for customers to begin paying their outstanding bills.
Grant Administration by the Chamber
As discussed in the February 23, 2021 staff report, staff is recommending that the City
contract with the Chamber to administer some of the potential grant programs if they are
chosen for implementation. Following the February 23rd meeting, the Chamber submitted
a proposal to provide grant administration services for several of the potential programs.
The Chamber’s proposal is provided as Attachment 2. Staff recommends moving forward
with an agreement with the Chamber to administer the grants that are both chosen by
Council for implementation and identified in Attachment 2.
Please refer to Attachment 1 for further information regarding the COVID-19 Relief
Program and its potential components.
Item 10.a. - Page 3
CITY COUNCIL
CONTINUED CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF
PROGRAM, INCLUDING ALLOCATION OF SB 1090 FUNDS AND/OR OTHER
GENERAL FUNDS TO THE PROGRAM
MARCH 9, 2021
PAGE 4
ALTERNATIVES:
The following alternatives are provided for Council’s consideration:
1. Approve a COVID-19 Relief Program and its components, allocate funding to the
Program, including a portion of the City’s SB 1090 funds, establish funding amounts
for each program, establish limits on the amount of each grant in each program, and
provide direction on program components.
2. Provide direction regarding chosen COVID-19 Relief Program components and
funding recommendations and direct staff to return with additional information; or
3. Do not approve a COVID-19 Relief Program; or
4. Provide other direction to staff regarding a potential COVID-19 Relief Program.
ADVANTAGES:
Approving a COVID-19 Relief Program, its chosen components, and funding for each
component will provide immediate and future relief to local businesses and support
economic development within the City and the region. Allocation of SB 1090 funds for
these purposes is consistent with the intent of the Settlement Agreement and legislation
that authorized these funds.
DISADVANTAGES:
Allocation of SB 1090 funds to the COVID-19 Relief Program will reduce available funding
for other economic development purposes. Similarly, allocation of General Fund reserves
to the COVID-19 Relief Program will preclude the ability to use those funds to support
other City services or address other longer-term goals of the City, such as reducing the
City’s unfunded pension liability.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Attachments:
1.February 23, 2021 Staff Report
2.Chamber Proposal for Grant Administration
Item 10.a. - Page 4
MEMORANDUM
TO: CITY COUNCIL
BY: WHITNEY MCDONALD, CITY MANAGER
SUBJECT: CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM,
INCLUDING ALLOCATION OF SB 1090 FUNDS AND/OR OTHER
GENERAL FUNDS TO THE PROGRAM
DATE: FEBRUARY 23, 2021
SUMMARY OF ACTION:
Consideration of approval of a COVID-19 Relief Program, including allocation of a
portion of the City’s SB 1090 funds to support business assistance programs and
consideration of allocating other General Funds to the Program.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Pursuant to a December 2016 Settlement Agreement between Pacific Gas & Electric
(PG&E) and the local San Luis Obispo County governmental entities and, later, SB 1090,
the City has received one-time Economic Development Funds (EDF) of $747,422 to
support the City’s economic development needs in light of the planned closure of the
Diablo Canyon Power Plant. In addition, the City will receive a total of $271,826 in
Essential Services Mitigation Funds (ESMF), disbursed in eight annual payments of
$33,978.26 beginning in 2018. To date, the City has received $67,956.52 in ESMF
payments. These funds are kept in a separate trust account and have not yet been
allocated by the City to any specific activities or programs. A portion of these funds may
be allocated to the COVID-19 Relief Program.
As stated in the Year-End Financial Status Report for Fiscal Year 2019-2020, the City
ended Fiscal Year 2019-2020 with a fund balance reserve of 24.6%, exceeding the City’s
adopted reserve goal of 20%. This beginning fund balance reserve will enable the City to
realize a fund balance reserve of 23.8% in Fiscal Year 2020-2021, if expenditures remain
on target. This equates to an anticipated total fund balance reserve of $4.3 million in
Fiscal Year 2020-2021, $580,000 more than the 20% target.
The City’s water, sewer and sanitation customers have incurred approximately $105,000
in overdue charges and late penalties since April 2, 2020, when the Governor issued an
executive order suspending the discontinuation of service for nonpayment during the
COVID-19 crisis, resulting in a revenue shortfall to the water, sewer and sanitation funds
of $53,800, $7,600 and $19,100 respectively. Overdue late penalties equated to $24,500.
Funds may need to be transferred from the General Fund to the water and/or sewer funds
in the event that these funds experience a deficit during the fiscal year, including any
ATTACHMENT 1
Item 10.a. - Page 5
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 2
deficit that may result from any waivers of penalties granted through a COVID-19 Relief
Program.
RECOMMENDATION:
It is recommended the City Council consider approving a COVID-19 Relief Program,
allocating funding to the Program, including a portion of the City’s SB 1090 funds,
establishing funding amounts for each program, establishing limits on the amount of each
grant in each program, and providing direction on program components.
BACKGROUND:
Business Assistance Grant Program
The COVID-19 pandemic has caused significant impacts to local businesses since the
first shelter at home orders were issued by the State Governor and Public Health Officer
in the spring of 2020. The federal Coronavirus Aid, Relief, and Economic Security Act (the
“CARES Act”) provided funding through the Coronavirus Relief Fund (CRF) for state and
local governments to pay costs incurred in responding to the COVID-19 pandemic. The
City received a total of $218,384 through the CARES Act. Of this total, $60,000 was used
to create a City of Arroyo Grande Business Assistance Grant Program. An additional
$25,000 was allocated to the City’s Community Service Grant Program and $8,000 was
granted to the South County Chamber of Commerce (Chamber) to support efforts to
install holiday lights in the Village due to funding shortages resulting from fundraising
event cancellations. The Business Assistance Grant Program enabled the City to provide
$1,000-$5,000 grants to eighteen separate Arroyo Grande businesses. Those
businesses received their grants in December and have documented their expenditure of
those funds as of January 31, 2021.
SB 1090 Funds
In December 2016, a Settlement Agreement was reached between PG&E and the local
San Luis Obispo County governmental entities, including the City of Arroyo Grande,
relating to the closure of the Diablo Canyon Power Plant. The agreement was then
submitted to the California Public Utilities Commission (PUC) for approval (Application
16-08-006). Initially, issues arose at the PUC related to funding the Settlement Agreement
and its “Community Impact Mitigation Program” through ratepayers. Those issues were
resolved by the State Legislature through its adoption of SB 1090 in 2018, which amended
Public Utilities Code Section 712.7 to require the PUC approve “[t]he full funding for the
community impact mitigation settlement proposed in Application 16-08-006.”
The Settlement Agreement includes provisions for a $10,000,000 Economic
Development Fund and provides that $747,422 is to be allocated to the City of Arroyo
Grande. In addition, the City will receive a total of eight $33,978.26 Emergency Services
Mitigation Fund (ESMF) payments from PG&E over the course of eight years, beginning
in 2018. These funds may be used for any purpose and will equate to a total of $271,826
Item 10.a. - Page 6
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 3
of additional payments to the City resulting from the Diablo Canyon Power Plant closure.
To date, the City has received $67,956.52 in ESMF payments and $747,422 as a result
of the Settlement Agreement and SB 1090. These funds are kept in a separate trust
account and have not yet been allocated to any activities or programs.
In September 2020, Council approved a list of Top 10 Priorities for Fiscal Year 2020-
2021. One of those goals addresses the use of the City’s SB 1090 funds:
3. Develop short- and long-term economic development goals of the City in light of
the adopted Economic Development Element, and evaluate and allocate SB 1090
funds for programs consistent with these economic development goals
Discuss and identify short- and long-term economic development goals by the
Winter of 2020/2021
Evaluate and allocate SB 1090 funds for programs consistent with the identified
economic goals by the Spring of 2021
General Fund Reserves
On October 13, 2020, Council received a Year-End Financial Status Report for Fiscal
Year 2019-2020 (Year-End Report). The Year-End Report indicated that, through a
number of cost-saving measures implemented in the third and fourth quarters of the Fiscal
Year 2019-2020 combined with better-than-expected revenue receipts, the City ended
Fiscal Year 2019-2020 with a fund balance reserve of 24.6%, exceeding the City’s
adopted reserve goal of 20%. The Year-End Report further explained that this beginning
fund balance reserve will enable the City to realize a fund balance reserve of 23.8% in
Fiscal Year 2020-2021, up from the budgeted reserve of 18.4%, if expenditures remain
on target. This equates to an anticipated total fund balance reserve of $4.3 million in
Fiscal Year 2020-2021, $580,000 more than the 20% target. In the past, the City has
used excess reserve funds to pay down the City’s unfunded PERS liability, which results
in significant future savings to the City.
Water and Sewer Payment Penalties
In response to the COVID-19 pandemic, Governor Newsom issued Executive Order N-
42-20 on April 2, 2020, which suspends the authority of water systems to discontinue
service for nonpayment to residential and critical infrastructure sector small business
customers. On April 14, 2020, Council adopted Resolution 4981 extending the protections
offered by this Order to all businesses until the Order is terminated. In addition, Resolution
4981 authorized the Administrative Services Director to waive late penalties for water and
sewer customers for the months of March and April 2020.
The City has not discontinued service to any water or sewer customer since enactment
of Executive Order N-42-20 and City Council Resolution 4981. However, since April 2020,
Arroyo Grande water, sewer and sanitation customers have incurred a total of
approximately $24,500 in unpaid late penalties and $80,500 in past due water, sewer and
Item 10.a. - Page 7
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 4
sanitation charges. These penalties will continue accruing until they are paid in full by
customers.
The City offers payment plan, amortization, and payment deferral options to water
customers consistent with SB 998, known as the Water Shutoff Protection Act. These
options allow customers to pay outstanding balances over the course of 12 months. As
of February 1, 2021, there are no City water customers participating in payment plans.
Residential Rent Relief
The COVID-19 pandemic has led to job losses and an unemployment rate of 6.7% as of
December 2020, according to the California Employment Development Department.
These job losses impact households’ ability to meet their rent obligations, leading to a
likelihood of high eviction rates throughout the County and the State. During the current
public health crisis, the State government has enacted a number of eviction moratoriums
to ensure that tenants are not evicted for failure to make complete rent payments if the
tenants submit a declaration of financial distress created by COVID-19. The most recent
eviction moratorium (SB 91) was enacted on January 29, 2021, extending the moratorium
through June 30, 2021. In total, the State’s orders and legislation have provided eviction
moratoria covering the period between March 1, 2020, through June 30, 2021.
Although tenants who provide the proper declaration to their landlords cannot be evicted
for failure to pay their full rental obligations, overdue rent payments continue to accrue
and remain owed by the tenant. Landlords may sue tenants for delinquent rental
payments in small claims court, even if the amount sought is over $5,000. In addition,
under recent legislation, the eviction moratorium applies only if the tenant submits a
declaration of financial distress AND pays 25% of each rental payment that was due or
will be due between September 1, 2020, and June 30, 2021.
SB 91 also established the State Emergency Rental Assistance Program (ERAP) to
allocate the $2.61 billion in federal aid earmarked for rental assistance in California. ERAP
funds will be used for back rent, prospective rent payments, and utility payments. San
Luis Obispo County’s estimated allocation of ERAP funds totals $17,476,523.94,
including $8,417,381.71 in direct federal funds and $9,059,142.23 in State funds. It is
anticipated that the State will administer the ERAP program on behalf of the County,
including the portion of funding received directly from the federal government. Additional
information regarding ERAP is available at HousingIsKey.com, including the portal for
submission of applications.
The ERAP program will begin accepting applications by at least March 15 and will
prioritize the payment of rental arrearages. Utility arrearages will also be eligible to be
paid, subject to funding availability. The program is available for households with incomes
at or below 80 percent of Area Median Income, with a priority on helping households at
or below 50 percent of Area Median Income as well as households unemployed for the
Item 10.a. - Page 8
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 5
preceding 90 days at the time of application. Landlords may apply to receive direct
payments on behalf of their tenants, so long as they choose to accept 80% of any unpaid
rent owed from April 1, 2020, through March 31, 2021, and forgive the remaining 20%
owed. If a landlord chooses not to participate, the tenant may apply for relief valued at
25% of unpaid back rent owed for the covered period. Qualified tenants will also be able
to access funds to cover 25% of prospective rent for the months of April, May, and June
of 2021, subject to funding availability.
At its regular meeting on January 26, 2021, Council directed staff to bring forward an item
to consider components of a COVID-19 Relief Program that the City could implement to
offer additional support to local businesses, including consideration of the use of SB 1090
funds and General Funds for this program. In addition, Council requested that this item
include a discussion of options to enable waivers of late penalties for City water and sewer
customers, and a discussion of rent relief for Arroyo Grande residents.
ANALYSIS OF ISSUES:
COVID-19 Relief Program Components
Several different types of business assistance programs may be created or continued to
provide relief to local businesses in light of the continued impacts of the COVID-19
pandemic. Staff has prepared a list of potential programs for Council’s consideration. Due
to staffing constraints, it is recommended that the City contract with partner agencies,
such as the Chamber, to administer some of these programs. These issues are discussed
in more detail below.
Some relief program components for consideration include:
1. Business Assistance Grant Program
The City may wish to generate a new round of Business Assistance Grants using
the model established using CARES Act funds in October 2020. That model
utilized a grant review panel to review grant applications and select recipients.
Allowed uses of the funds for this round could include: rent, payroll, personal
protective equipment costs, and costs associated with implementing new cleaning
or operational protocols. The grant recipient would be required to enter into a grant
agreement with the City and to comply with all applicable COVID-19 related health
orders. It is recommended that City staff administer this grant program, as the
forms and administrative procedures have been developed and were successfully
implemented by staff with the first round of Business Assistance Grants issued in
November and December 2020.
One additional item for consideration with this round of grants is whether to enable
non-profit organizations to receive awards. Three non-profits submitted
applications for Business Assistance Grants during the last round and were
directed to seek Community Service Grant awards instead. It is anticipated that
Item 10.a. - Page 9
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 6
the City’s Community Service Grant Program grants will be awarded in March. This
year, the City has allocated $50,000 to the program, including $25,000 in revenue
from the CARES Act. The City received 16 applications that seek a total of more
than $127,000 in funding. Council may wish to enable nonprofit organizations to
seek relief associated with COVID-19 impacts through the Business Assistance
Grant Program as well.
2. Shop Local Gift Card Reward Program
The City may wish to create of a gift card program wherein the City would purchase
gift cards from participating businesses located in Arroyo Grande and then offer
those gift cards to anyone who provides proof of purchase of at least $100 from an
Arroyo Grande business. Such a program would both incentivize shopping at local
businesses and provide direct financial benefits to the businesses from which gift
cards are purchased. Participating businesses would be screened for compliance
with COVID-19 protocols and orders, as well as business license requirements. It
is recommended that the City partner with the Chamber to administer this program,
including gathering a list of participating businesses, reviewing receipts from
customers, and handing out gift cards, and that the City provide the Chamber with
funds to purchase no more than ten gift cards in $25 increments from each
participating business.
3. COVID Resiliency Grant Program
An additional grant program may be created to support the efforts of Arroyo
Grande businesses to shift their business practices to better adapt to the COVID-
19 environment. These types of operational changes are likely to benefit
businesses and build resiliency beyond the COVID-19 pandemic, supporting
overall economic development within the City. For instance, the Chamber has
indicated that a number of local businesses are in need of assistance to help grow
their online presence through website design and maintenance and new or
increased inventory tracking and packaging systems. Similarly, employees of local
businesses may require retraining to support these new systems or to be able to
conduct business remotely. Grants may be provided to local businesses in need
of support to achieve these shifts and changes in their operations.
As with the Business Assistance Grant Program, recipients of the COVID
Resiliency Grant would be required to enter into a grant agreement and to comply
with all applicable COVID-19 related health orders. Proposals for how the funds
would be used to help the businesses modify their operations would be required
with the application, and documentation that the funds were used to support the
purpose of the grant would also be required. Priority could be given to businesses
that have not received Business Assistance Grants from the City and that propose
to utilize local service providers for their website design and maintenance needs.
It is recommended that the City engage the Chamber to administer this program.
Item 10.a. - Page 10
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 7
4. Business Beautification Grant Program
The COVID-19 pandemic has provided an opportune time for some businesses to
look at refreshing their storefronts, building exteriors, and interior spaces while
folks are working from home and in-person interactions with customers are limited.
These types of improvements benefit the entire community by beautifying and
modernizing the City’s stock of commercial and office space which increases
overall economic development and incentivizes long-term investment in our local
businesses. The City may wish to establish a grant program to help offset the costs
associated with these efforts. The grant funds could apply to proposed
improvement plans and improvements that were started and completed during the
pandemic. Priority could be given to projects proposing to use contractors and
design professionals who are also located in Arroyo Grande or nearby areas,
increasing the economic benefits to our community from each grant.
It is recommended that City staff administer this program, if it is chosen for
implementation, because of the overlap between the activities covered by this
program and the services provided by the City’s Community Development
Department. A maximum grant amount per recipient should be established and
applications would be made available to businesses that inquire with the
Community Development Department regarding their beautification projects.
Grants would be awarded to projects on a first-come first-served basis until the
total funds allocated to the program are depleted. Projects utilizing local
contractors and design professionals would be eligible for larger awards.
5. Retraining Scholarship Program
Both the COVID-19 pandemic and the future closure of the Diablo Canyon Power
Plant have generated an increased need for retraining opportunities for the local
workforce. The City may wish to create a scholarship program to provide
assistance to Arroyo Grande residents or employees who are seeking
occupational retraining opportunities. Qualifying retraining programs may include
those administered by nearby community colleges or universities, or online or in-
person certification or degree programs. Priority would be given to individuals
whose existing occupations have been directly impacted by COVID-19 and/or the
planned closure of the Diablo Canyon Power Plant.
It is recommended that staff partner with the Chamber and/or a nonprofit
organization to administer this scholarship program. Opportunities exist with local
organizations, such as SLO Partners, to provide workforce training programs that
are tailored to our residents’ and businesses’ immediate needs. However,
additional information is needed to determine the best fit for the desired outcomes
of this scholarship program. If this program is chosen for implementation, the City
Item 10.a. - Page 11
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 8
Manager would investigate these options further and return to Council with a
proposed agreement for administration of the scholarship program.
6. COVID Safety Superstar Program
The City may wish to consider participating in a program that celebrates
businesses’ adherence to COVID-19 protocols and restrictions. The Chamber has
agreed to assist the City in these efforts by collecting nominations and choosing
businesses to feature each month. The City would then issue a certificate or
commendation to these businesses and spotlight them on the City’s website and
social media accounts. These efforts are not anticipated to require any funding by
the City and only minimal staff time.
7. Water and Sewer Late Penalty Relief
As described in the Background section above, the City’s water and sewer
customers have accrued approximately $24,500 in unpaid late penalties and
$80,500 in past due charges. Typically, the City would begin the process to
discontinue service to these customers for nonpayment consistent with the City’s
adopted policies. This process usually results in customers paying their past due
charges and penalties in order to avoid shutoffs. However, the COVID-19-related
moratoria on discontinuation of utility services have precluded the City from
engaging in this process, enabling customers to accrue substantial amounts of
unpaid charges and penalties. The City may wish to develop a relief program that
would help customers pay these penalties and past due charges. Most likely, this
program would need to be funded using General Fund monies rather than SB 1090
funds, at least for residential customers as discussed in more detail below.
Alternatively, the City may wish to delay implementation of any such program in
light of the potential for customers to receive ERAP funding for utility payments.
In the event that a Water and Sewer Late Penalty Relief program is implemented
by the City, Council may wish to limit eligibility to lower-income households that
have qualified for income-dependent programs administered by PG&E or Southern
California Gas Company, such as the California Alternate Rates for Energy
Program (CARE) or the Family Electric Rate Assistance Program (FERA). Proof
of qualification under the CARE or FERA programs would operate as the City’s
income level screening criteria, streamlining the process for applicants and City
staff.
Any Water and Sewer Late Penalty Relief Program would need to be implemented
by City staff within the Administrative Services Department, which administers the
City’s utility billing and collections system. The Administrative Services Department
is experiencing significant staffing constraints due to a number of key employees
who are currently on leave, partly related to COVID-19 impacts. As a result, City
Item 10.a. - Page 12
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 9
staff are not in a position to begin administering a relief program of this kind until
April, at the earliest.
8. Residential Rent Relief
The County, State, and federal governments very recently created the ERAP to
provide emergency rent relief to tenants and landlords. Implementation of this
program will begin by mid-March 2021 and is anticipated to provide over $17.4
million in assistance to residents in our County. The State will most likely
administer this program on behalf of the County in order to maximize efficiency
and ease of access for all of the funds allocated to County residents. Rent relief
programs typically require extensive administrative oversight, sometimes up to 20
hours per application according to one local nonprofit provider, which City staff
could not undertake at this time. It is, therefore, recommended that the City not
pursue its own residential rent relief program in light of the availability of the ERAP.
Additional concepts that Council may wish to explore include grant programs targeted to
specific industries, such as the arts, fitness centers and instructors, child care providers,
personal care services, the events industry, or restaurants. However, each of these
industries would be eligible to apply for the other types of grant programs outlined above.
Funding for the COVID-19 Relief Program
The City may choose to fund COVID-19 Relief Program components using a portion of
the City’s SB 1090 funds. The terms of the Settlement Agreement and SB 1090 provide
that the cities may use the funds for implementation of regional economic development
and job creation programs. Specifically, Section 2 of Appendix 2 to the Settlement
Agreement states that “[t]he purpose of the Economic Development Fund is to provide
immediate funding for actions to create new economic development opportunities and
mitigate impacts associated with the pending closure of Diablo Canyon.” Section 4 of
Appendix 2 further provides that “[t]he County and Coalition of Cities commit to spending
the Economic Development Fund solely for the purposes of economic development and
impact mitigation purposes.”
Retention of existing businesses and support for new businesses looking to open in the
midst of the COVID-19 pandemic will promote economic development in the City.
Additionally, a number of grant programs described above will encourage economic
growth through investments in business operations that can serve customers, clients, and
employees both within and beyond the COVID-19 environment. These programs will help
to mitigate the impacts of both the Diablo Canyon Power Plant closure and the COVID-
19 pandemic. It is, therefore, recommended that Council consider funding the COVID-19
Relief Program using a portion of the City’s SB 1090 funds. This approach is consistent
with grant programs administered in other jurisdictions in the County, which have also
utilized a portion of their SB 1090 funds to provide COVID-19 relief to local businesses.
Item 10.a. - Page 13
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 10
It may be difficult, however, to utilize SB 1090 funds to reduce or waive late penalties for
water and sewer customers, particularly if those customers are residential, because the
connection to economic development is more tenuous. Reductions or waivers of late
penalties or overdue charges will decrease revenues to the City’s water and sewer funds,
which are enterprise funds restricted to providing the City’s water and sewer services. In
the event that these funds experience a deficit, General Fund revenue may be required
to fill those deficits. Therefore, any Water and Sewer Late Penalty Relief program would
likely need to be funded using a portion of the General Fund reserves described in the
Background section above.
It is recommended that Council select the programs it wishes staff to implement, allocate
funding to each program from either SB 1090 or General Fund reserves, and identify the
maximum grant amount allowed under each program. Additional direction may be
desirable regarding certain program requirements. Table 1 below provides the information
needed to implement the COVID-19 Relief Program.
Table 1
Program
Imple-
ment?
(Y/N)
Total $
allocated
to program
Source
of
funding
$ limit
per
grant
1. Business Assistance Grant Program
* Additional Direction:
2. Shop Local Gift Card Reward
Program
* Additional Direction:
3. COVID Resiliency Grant Program
* Additional Direction:
4. Business Beautification Grant
Program
* Additional Direction:
5. Retraining Scholarship Program
* Additional Direction:
6. COVID Safety Superstar Program
None NA NA
* Additional Direction:
Item 10.a. - Page 14
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 11
Program
Imple-
ment?
(Y/N)
Total $
allocated
to program
Source
of
funding
$ limit
per
grant
7. Water and Sewer Late Penalty
Relief Program
* Additional Direction:
8. Residential Rent Relief Program
* Additional Direction:
Total: SB 1090 $
General Fund $
ALTERNATIVES:
The following alternatives are provided for Council’s consideration:
1. Approve a COVID-19 Relief Program and its components, allocate funding to the
Program, including a portion of the City’s SB 1090 funds, establish funding amounts
for each program, establish limits on the amount of each grant in each program, and
provide direction on program components.
2. Provide direction regarding chosen COVID-19 Relief Program components and
funding recommendations and direct staff to return with additional information; or
3. Do not approve a COVID-19 Relief Program; or
4. Provide other direction to staff regarding a potential COVID-19 Relief Program.
ADVANTAGES:
Approving a COVID-19 Relief Program, its chosen components, and funding for each
component will provide immediate and future relief to local businesses and support
economic development within the City and the region. Allocation of SB 1090 funds for
these purposes is consistent with the intent of the Settlement Agreement and legislation
that authorized these funds.
DISADVANTAGES:
Allocation of SB 1090 funds to the COVID-19 Relief Program will reduce available funding
for other economic development purposes. Similarly, allocation of General Fund reserves
to the COVID-19 Relief Program will preclude the ability to use those funds to support
other City services or address other longer-term goals of the City, such as reducing the
City’s unfunded pension liability.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
Item 10.a. - Page 15
CITY COUNCIL
CONSIDERATION OF APPROVAL OF A COVID-19 RELIEF PROGRAM, INCLUDING
ALLOCATION OF SB 1090 FUNDS AND/OR OTHER GENERAL FUNDS TO THE
PROGRAM
FEBRUARY 23, 2021
PAGE 12
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Item 10.a. - Page 16
The Chamber is proud to represent the Arroyo Grande business community for 63 years. Our
Chamber was originally formed as the Arroyo Grande Valley Chamber of Commerce in 1957.
The Arroyo Grande businesses in our membership represent an approximate workforce of
5,150 employees. Our mission is to create partnership and opportunities to ensure businesses
prosper.
Now more than ever we are committed to being an effective advocate for Arroyo Grande
businesses. On behalf of the Board of Directors, staff and business members we are pleased to
submit this proposal for Economic Recovery and Assistance services to your council for
consideration. This proposal is focused on business retention and support for existing
businesses.
Business retention, requires sustained investments and results develop over time. We believe
that the community is best served by strategic, focused efforts which ensure we retain our
current businesses and employees. We have provided a snap shot of business and
employment from 2019 prior to the Covid-19 Pandemic for context.
The Chamber is grateful for the opportunity to work collaboratively with elected leaders, city
staff and the private sector in our community on these critical efforts and we look forward to
your feedback and support.
Sincerely,
Jocelyn Brennan, President & CEO
2021 Board of Directors South County Chambers of Commerce
ATTACHMENT 2
Item 10.a. - Page 17
PARTNERSHIPS
Arroyo Grande Steering Committee
Derek JohnsonChiasa KlapperLouisa LindquistTony GoetzFrank SchiroKen Dalebout
Regional Partners
Cal Poly Local Economic Development Committee
REACH –Economic Development Practitioners Network
SLO Partners
SLO CAL
Central Coast Coalition of Chambers
TriCounty Chamber Alliance
SLO Partners
Workforce Development Board
SCORE
Cal Poly CIE/ Small Business Development Center Item 10.a. - Page 18
Current Ongoing Chamber Services
•Welcome new Arroyo Grande Businesses ribbon cuttings
•Monthly Arroyo Grande Steering Committee meetings with businesses
•Regular business events for Arroyo Grande
•Ongoing educational programming for businesses
•Mayors update in monthly newsletter
•City update by Council Liaison at Steering Committee and Governmental Affairs
•Partnering with the Arroyo Grande Public Art Group
•South County Visitor Guide and Map
•Manage South County Regional Center
•Elegant Christmas in the Village
•Partnered with the city on holiday lighting
•State of South County
•TBID Management
•Covid Business Assistance Grants
•Ongoing business retention
•Covid compliance and resource assistance
Item 10.a. - Page 19
Arroyo Grande Business 2019 Snap-Shot
1482
Businesses in
Arroyo
Grande
Average
Earnings
$57.9k
12,065 Jobs
in Arroyo
Grande
13,861
workforce
lives in
Arroyo
Grande
Item 10.a. - Page 20
Item 10.a. - Page 21
Item 10.a. - Page 22
The Chamber is proposing to implement and manage these grant programs in partnership with the city.
•Business Assistance Grant
•Business Covid Resiliency Grant
•Beautification Grant
•Retraining Scholarship Program
The Chamber will implement and manage these programs for 6 months or duration of program.
Grants: Create grant application, promote grant through press release, digital, social media and direct outreach to
businesses. Establish scoring criteria, schedule review panel. Notify recipients and work with the city to distribute
funds. Promote grant recipient and success of the program. Establish reporting criteria and deadlines. Communicate
with recipients to ensure reporting is completed.
The Chamber estimates that each program will require approximately $1700 in staff time if implemented
individually. If the Council desires to approve all of the programs, the Chamber suggests the Business Assistance,
Covid Resiliency Grant and Retraining Scholarship be implemented as a “Business Assistance Package”, with one
review panel for efficiency. This approach would bring staff time reimbursement to $4500. We suggest the
Beautification Grant should have a separate application and review panel (with an estimated reimbursement of
$1700).
Item 10.a. - Page 23
•Shop Local Gift Card Reward Program
•Safety Superstar Recognition
Shop Local Gift Card Reward Program: Establish application and criteria for gift card participating businesses.
Launch and market program; press release, digital, social media, signage for businesses and direct outreach to
businesses. Review receipts and distribute gift cards.
The Chamber estimates approximately $2100 in staff time and materials to implement this program.
Safety Superstar Recognition: In partnership with city staff the Chamber will establish criteria for the special
recognition and create a nomination form and QR code. The Chamber will promote this program, provide
signage to businesses, form a review panel that will include a public health/health care representative or
Covid safety expert and the Arroyo Grande Steering Committee. Once selected the business will be promoted
through press release, digital, social media channels. The Chamber will also work with city staff to schedule
recognition with a city commendation.
The Chamber estimates this will involve limited staff time which will require no reimbursement from the city.
Item 10.a. - Page 24