Res 20-020RESOLUTION NO. 20-020
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, ESTABLISHING THE POWAY
EMERGENCY ASSISTANCE RECOVERY LOANS (PEARL)
PROGRAM
WHEREAS, on January 31, 2020, the United States Department of Public Health and
Human Services Secretary declared a public emergency for the novel coronavirus (COVID-19);
WHEREAS, on February 14, 2020, San Diego County declared a local health emergency
and proclaimed a local emergency regarding COVID-19 which was ratified and extended by the
San Diego County Board of Directors on February 19, 2020;
WHEREAS, on March 4, 2020, Governor Gavin Newsom declared a state of emergency
in the State of California due to COVID-19;
WHEREAS, on March 13, 2020, the City Manager, acting in his capacity as Director of
Emergency Services, proclaimed the existence of a local emergency due to COVID-19;
WHEREAS, on March 18, 2020, the City Council ratified the Director of Emergency
Services' proclamation of a local emergency;
WHEREAS, the City Council of the City of Poway recognizes the significant negative
impact the COVID-19 emergency situation is having and will continue to have, for the duration of
the emergency and beyond, on the city's local business environment, particular locally -owned -
and -operated independent businesses;
WHEREAS, the City maintains sufficient reserve funds to be utilized in the event of
emergency situations and has also approved a General Fund Reserve Policy that directs the
manner in which those funds can be utilized as well as replenished;
WHEREAS, the City Council, is fully cognizant of the benefits that a viable, sustainable
and prosperous business provides to the City both as a corporate entity as well as a community
of residents, businesses, students, workers and travelers;
WHEREAS, viable, sustainable and prosperous businesses provide the City with sales
tax revenue and other indirect economic activity that is critical for the City to provide services to
all City residents; and
WHEREAS, the City Council, desiring to try to find useful tools to assist our local business
community weather the storm of the COVID-19 emergency, believes that the use of a portion of
the City's general fund reserves to establish a short-term, low-interest business loan program is
a proper use of those funds and promotes and protects a vital public interest in helping our
business community remain viable for the duration of the COVID-19 emergency situation and
secure continued long term revenue sources for the City.
Resolution No. 20-020
Page 2
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Poway as
follows:
SECTION 1: The City Council of the City of Poway does hereby establish the Poway
Emergency Assistance Recovery Loan (PEARL) Program as described Poway Emergency
Assistance Recovery Loan (PEARL) Program Description attached hereto as "Exhibit A" and
authorizes and directs the City Manager to develop the necessary forms, documents and
processes to establish and operate the program in substantial conformance with the major
provisions outlined therein, and to implement the same.
SECTION 2: The City Council reserves the right to amend the program as well as
authorizes the City Manager the flexibility to negotiate the loan terms in terms of repayment
schedules on a case by case basis, supported with appropriate findings, but not the maximum
loan amount or the not to exceed amount of the total approved program.
SECTION 3: The City Council hereby vests the City Manager with the ultimate discretion
to determine the eligibility of any business that applies for a loan under the PEARL program,
including the amount of the loan any applicant is eligible to receive, if any. All decisions made by
the City Manager with respect to an application for a loan under the PEARL program are final and
shall not be appealable to the City Council.
SECTION 4: The City Council hereby authorizes and directs the Finance Director to
appropriate $2,000,000 from the General Fund's Extreme Events/Public Safety reserve and
transfer it to a separate general ledger account, in compliance with accounting guidelines, for the
sole use towards the PEARL program.
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the
City of Poway, California on the 16th day of April, 2020 by the following vote, to wit:
AYES: MULLIN, LEONARD, GROSCH, FRANK, VAUS
NOES: NONE
ABSENT: NONE
DISQUALIFIED: NONE
Steve Vaus, Mayor
ATTEST:
Faviola Medina, CMC, City Clerk
EXHIBIT A Resolution No. 20-020
Page 3
Poway Emergency Assistance Recovery Loan Program (PEARL)
Overview & Objectives
To mitigate the impact of COVID-19 on Poway small businesses and their employees, the City of
Poway has committed up to $2 million in one-time funds from the City's General Fund's Extreme
Events/Public Safety reserve to create a Poway Emergency Assistance Recovery Loan (PEARL)
Program. The objective of this Program is to quickly offer financial assistance to independently
owned and operated small businesses with the City of Poway to aid in maintaining their business
and workforce.
Program Overview
1. $2 million in total funding.
2. Loan amount ranges between $5,000 and $50,000.
3. Business must be independently owned and operated small businesses located in the City
of Poway with no more than 50 full-time employees as of the City's emergency declaration
dated March 18, 2020.
4. Loan funds may only be used to cover the following items: payroll, lease or mortgage
payments, utilities and accounts payable for business premises located in Poway.
5. No interest shall be due for 90 days following the date on which the City Council of the
City of Poway declares the ongoing state of local emergency relating to the COVID-19
pandemic no longer required and the emergency has ended. Interest shall accrue 3%
interest annually thereafter; all loans due within 3 years of the end of the declared local
emergency.
6. Loans will be awarded on a first-come, first-served basis for qualified applicants. All loans
are approved by the City Manager, and all decisions are final.
Eligibility Criteria
1. The business' primary location and operation must be within the City of Poway.
2. The business was in operation and had a City of Poway Business Certificate as of
March 18, 2019.
3. The business is independently owned (no chain or franchise businesses).
4. The business has at least one and no more than 50 full-time employees as of March
18, 2020.
5. The business is not in arrears with rent or mortgage payments as of March 1, 2020.
6. The business is in good standing with the City of Poway.
7. The business shall provide proof of economic hardship as a result of the Covid-19
pandemic.
8. The business does not have any code violations or outstanding judgements with the
City of Poway.
9. The business has no outstanding judgments or tax liens. The business owners have
not been convicted of a criminal offense.
10. The business or owner has no delinquency on federal taxes or a federally guaranteed
loan.
11. There has been no suspension or debarment from contracting with the federal
government or receiving federal funds.
Resolution No. 20-020
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Ineligible Businesses
1. Illegal businesses
2. Home-based businesses
3. Non-profit businesses
4. Chain or franchise businesses (more than 3 locations)
5. Business or owner that has filed for bankruptcy, insolvency proceedings within the past 5
years
6. Owners who work or have a spouse or member of the household who works for the City
of Poway
Other Government Assistance
Should a loan recipient apply and receive other government assistance (not including the
Federal Paycheck Protection Program), their application should include the outstanding
balance of their City loan so that the City can be repaid upon receipt of additional financial
assistance.
Use of Funds Declaration
Loan recipients will be required to affirmatively declare that any loan funds received from the City
will be used to the benefit of the business physically located in Poway (some Poway based
businesses have satellite locations in other jurisdictions).
Additional Resources
Please check out the Economic Development page on the City's website.
Application and Funding Process:
Applications will be available April 23, 2020 at 12:00 p.m. at www.poway.org.
Application Requirements
1. Loan application
2. Business and personal tax returns — 2 years if applicable
3. Interim business financial statement
4. Personal financial statement
5. Bank statements — 3 months
6. Itemized budget for funds requested
7. There is no credit minimum, however the principal business owner(s) must have
reasonable and responsible personal credit history and an acceptable explanation for
any derogatory marks.
8. Businesses must show that historical profits would have been sufficient to service the
requested debt and that they have been impacted by the COVID-19 outbreak