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HomeMy WebLinkAboutAgenda - 05-19-20; 7-a - Final Report of Emergency Small Business Fund Program 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 19, 2020 Action Agenda Item No. 7-a SUBJECT: Final Report of Emergency Small Business Fund Program DEPARTMENT(S): County Manager ATTACHMENT(S): INFORMATION CONTACT: 1. PowerPoint Presentation Gary Donaldson, (919) 245-2453 2. List of Award Recipients Steve Brantley, (919) 245-2326 Amanda Garner, (919) 245-2330 PURPOSE: To receive a report from staff on the Emergency Small Business Funding Program for Orange County small businesses experiencing revenue loss due to the coronavirus pandemic. BACKGROUND: The coronavirus pandemic has impacted the global economy and disrupted business activity throughout the United States and North Carolina. The County is committed to supporting its local businesses and employment base. The Board of County Commissioners approved an Emergency Small Business Funding for Orange County small businesses experiencing revenue loss due to the coronavirus pandemic. The emergency program was funded with $300,000 from the Article 46 Sales Tax Fund. Award recipients were eligible to receive grants and/or loans. The application period was from March 25 through April 10, 2020. The BOCC approved formation of a Nine-Member Committee to review and approve the award recipients. At the direction of the County Manager, the Finance and Administrative Services and Economic Development departments formulated the policies and procedures for the emergency program. Program eligibility requirements: - Orange County based businesses - Minimum of one year of operations - For-Profit business status - All applicants are required to have been in business for a minimum of one-year, hold applicable 2019 business privilege licenses, and be registered with appropriate legal entities such as the North Carolina Secretary of State or Orange County Register of Deeds office - Companies are not eligible if they have past-due tax liabilities or tax liens, delinquencies in Orange County property taxes, or are currently in bankruptcy (Corporate or Personal) - Profit and Loss statement indicating profitability prior to coronavirus pandemic The County received 283 applications by the April 10 due date, with 39 applications initially eliminated because they were duplicates (20), or submitted by businesses located outside of 2 Orange County NC (19). This resulted in 244 County-wide small business applications as follows: Location of Total Number Grant Loan Total Loan & Applicants Within of Applicants Requests Requests Grant Requests Orange County Carrboro 44 $226,000 $573,500 $799,500 Chapel Hill 123 $588,800 $1,516,000 $2,104,800 Hillsborough 62 $315,750 $909,910.82 $1,225,660.82 Durham 2 $10,000 $20,000 $30,000 Mebane 8 $40,000 $125,000 $165,000 Rougemont 3 $15,000 $30,000 $45,000 Cedar Grove 1 $5,000 $10,000 $15,000 Hurdle Mills 1 $10,000 $20,000 $30,000 Totals 244 $1,210,550 $3,204,410.82 $4,414,960.82 Orange County Economic Development staff completed reviews to check the business registration status with the North Carolina Secretary of State and/or Orange County Register of Deeds, and checked each applicant's current Real and Personal property tax payment status with Orange County Tax Office to verify eligibility. A total of 168 of the 244 applicants returned the requested information. The following tables represents demographic information for women, minority and co-owned women businesses. Breakdown of 244 Applications Percentages of Women and Minority-Owned Business Owners Women Owned 90 out of 244 Applicants 37% Minority Owned 34 out of 244 Applicants 14% Co-owned by Women 44 out of 244 Applicants 18% Breakdown of 27 Finalists % of Women and Minority-Owned Business Owners Women Owned 13 out of 27 Finalists 48% Minority Owned 3 out of 27 Finalists 11% Co-owned by Women 4 out of 27 Finalists F 15% 3 Key Financial Metrics: The financial data was reviewed by Finance using key income statement financial metrics including; 2019 surplus net income, 2019 net income as a percent of revenues, and revenue decreases of 25% or greater from March 2019 versus March 2020. (1) 2019 Profit/Loss - Revenues minus Expenditures - Operating Surplus (Deficit) ➢ Passing Metric: Breakeven or greater (2) 2019 Net Profit Margin - Net Income divided by Revenues Passing Metric: Positive % (3) March 2019 vs 2020 Revenue Variance (March 2020 revenue minus March 2019 revenue) divided by March 2019 revenue - March 2020 Revenues - March 2019 Revenues - March Percent Change ➢ Passing Metric: Revenue declines of 25 % or greater Results from the Financial Criteria Review: Applicants Passing the Financial Criteria and 27 Recommended to the Funding Committee Applicants that Passed Financial Criteria, but had unpaid 1 County property taxes — Ineligible Applicants that Failed the Financial Criteria-Ineligible 76 Applicants that failed to provide all required financial 64 documents — Ineligible Total 168 The Funding Committee voted and approved all 27 eligible applicants on Monday, April 27, 2020. Composition of the Nine-Member Committee: Town representatives (1 member from each Town) • Town of Chapel Hill Economic Development - Laura Selmer • Town Council Member with Town of Carrboro - Susan Romaine • Town of Hillsborough Economic Development - Shannan Campbell Orange County's Small Business Economic Development Grant Program • Orange County Economic Development Advisory Board Member - Johnny Morris • Orange County Economic Development Advisory Board Member - Sharon Hill Orange County's Agriculture Economic Development Grant Program (2 members) • Orange County Economic Development Advisory Board - James Watt • Orange County, Agriculture - Crops and Horticulture Representative - Mart Bumgarner 4 Orange County Small Business Loan Program Company (2 members) • Regional Commercial Lending Manager - Jonna Hunt • Chapel Hill Retailer - Tom Proctor The Funding Committee approved 27 grants in the amount of $5,000 each, 19 loans in the amount of $7,973.68, one loan for $7,500, one loan for $5,000 and one loan for $1,000. The smaller loan amounts represent the requested loan amount from those particular businesses. All loans are no interest amortized over five years, with no payment required the first six months from loan execution. Breakdown of Awards by Town: Grant Loan Amount Total Awarded Town Applications Amount Awarded Awarded Carrboro 9 $45,000 $56,342.10 $101,342.10 Chapel Hill 13 $65,000 $84,736.85 $149,736.85 Hillsborough 5 $25,000 $23,921.05 $48,921.05 Total Awards 27 $135,000 $165,000 $300,000 The funds were disbursed via Electronic Funds Transfer beginning the week of May 11, 2020 to all award recipients that have completed and returned all required County documents. FINANCIAL IMPACT: The Emergency Small Business Funding Program has awarded grants and loans in the amount of $300,000 from the Article 46 Sales Tax Fund. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to this item. • GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY The creation and preservation of infrastructure, policies, programs, and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board receive this final report. 5 GRANGE COUNTY NORTH CAROLINA Emergency Small Business Fund Final Report May 19, 2019 6 Background ❖ The Board of County Commissioners approved an Emergency Small Business Funding on March 24, 2020 in response to COVID-19 pandemic; ❖ Funded through $300,000 appropriation in Article 46 Orange County small business loan program; ❖ Application period open to small businesses for more than two weeks; March 25 through April 10, 2020. ❖ BOCC approved a 9-Member Funding Committee which met and approved the award recipients. ❖ 9-Member Funding Committee composition; - Two members Small Business Loan Program - Two members Small Business Grant Program - Two members Agriculture Grant Program - One member each from Towns of Carrboro, Chapel Hill and Hillsborough ❖ Collaborative Departmental effort by Manager's Office, Economic Development, Finance, Information Technology, Register of Deeds, Tax Office to respond to small businesses' needs ORANGE COUNTY NORTH CAROLINA li ibilit Requirements � v •'• Orange County based businesses •'• Minimum of one year of operations •'• For-Profit business status ❖ Minimum of one-year in business and applicable 2019 business privilege licenses, and registered with legal entities including North Carolina Secretary of State and County Register of Deeds Office •'• Businesses must not have past-due tax liabilities or tax liens, delinquent property taxes, or bankruptcy reorganization status ❖ 2019 Profit and Loss statement indicating profitability prior to pandemic ORANGE COUNTY NORTH CAROLINA Location of Applicants Total Number of Total Loan & Grant Compilation of Funding Requests Within Orange County Applicants Grant Requests Loan Requests Requests Carrboro44 $226,000 $573,500 $799,500 Chapel Hill :: :00 $1,516,000 $2,104,800 Hillsborough62 $315,750 $909,910.82 .. Durham 000 $20,000 $30,000 Mebane8 $40,000 $125,000 $165,000 Rougemont 000 $30,000 $45,000 Cedar Grove1 $5,000 $10,000 $15,000 Hurdle Mills1 $10,000 $20,000 $30,000 Totals $4,414,960.82 ORANGE COUNTY NORTHA'O 9 Breakdown of Awards by Location Grant . . . . . - . AmountAmount Applications Awarded Awarded AMMMi Ammmwi • • • 9 $45,000 $56,342.10 $101,342. 10 Chapel Hil13 $65,000 $84,736.85 $149,736.85 Hillsborough5 $25,000 $23,931.05 $48,921.05 Total • 27 $135,000 $165,000 $300,000 Li A Note: Three businesses declined to accept awards totaling $28,921.04 uKANGE COUNTY NORTH CAROLINA Demographics of the 244 Applicants LJWomen Owned Applicants - 90 out of 244 Applicants or 37% LJ Minority Owned Applicants - 34 out of 244 Applicants or 14% LJWomen Co-Owned Applicants - 44 out of 244 Applicants or 18% ORANGE COUNTY NORTH CAROLINA Demographics of the 27 Finalists LJWomen Owned Finalists - 13 out of 27 Finalists or 48% LJ Minority Owned Applicants - 3 out of 27 Finalists or 11% LJWomen Co-Owned Applicants - 4 out of 27 Finalists or 15% ORANGE COUNTY NORTH CAROLINA Three Key Financial Metrics 12 1) 2019 Profit/Loss Statement -Revenues minus Expenditures - Operating Surplus ( Deficit) -Passing Metric: $0 or greater 2) 2019 Net Profit Margin - Net Income divided by Revenues - Passing Metric: Positive 3) March 2019 versus March 2020 Revenue Variance - Passing Metric: 25% or greater revenue decrease ORANGE COUNTY NORTH CAROLINA 1 1 1 Applicants Passing the Financial Criteria and Recommended to 27 the Funding Committee Applicants that Passed Financial Criteria, but had unpaid County property taxes — Ineligible Applicants that Failed the Financial Criteria-Ineligible • Applicants that failed to provide all required financial documents — Ineligible Tota I • 14 Additional Small Business Funding Options ➢ Additional Funding Options; Article 46 and Coronavirus Relief Funds; ➢ Decrease from multiple Financial Criteria to only 1 criteria ; ➢ Finance Criteria -April 2019 versus April 2020 Revenue Declines �1 ORANGE COUNTY NORTH CAROLINA 15 Questions ORANGE COUNTY NORTH CAROLINA 16 Attachment 2 Award Recipients Grant Amount Loan Amount Acupuncture and Apothecary, LLC $5,000 $7,973.68 Ali Cat Toys LLC $5,000 $7,500 Kristin Bartone Interiors LLC $5,000 $5,000 Command C, LLC $5,000 $7,973.68 Community Chorus Project, LLC $5,000 $0 Eighth Abundance, Inc. $5,000 $7,973.68 Four Daughters Culinary Ventures, LLC (Elements Restaurant & Wine Bar) $5,000 $7,973.68 Hillsborough Gallery of Arts Inc. $5,000 $7,973.68 James Carter Studio, LLC $5,000 $1,000 Barrows Kitchen, LLC (Kitchen Restaurant) $5,000 $7,973.68 KJC CORP (dba Advance Physical Therapy) $5,000 $7,973.68 Lady Edison, LLC $5,000 $7,973.68 Lazarus Repair and Maintenance, LLC $5,000 $7,973.68 Rey-Khan LLC (Lucha Tigre) $5,000 $7,973.68 Montessori Academy of Carrboro LLC $5,000 $7,973.68 Paz Enterprises, LLC (Nash Street Tavern) $5,000 $0 Pedal Brake Inc. (dba Orange County Social Club) $5,000 $7,973.68 pod architecture + design PLLC $5,000 $0 Rumors LLC $5,000 $7,973.68 Spiral Studios $5,000 $0 Notelknurc, LLC (The Crunkleton) $5,000 $7,973.68 The Little School of Hillsborough at $5,000 $7,973.68 Waterstone, LLC Sam's Barbecue & Chop House, LLC $5,000 $7,973.68 (The Pig) Uniquities Inc. $5,000 $7,973.68 Vincent P Marra LMBT $5,000 $7,973.68 Wagner Shell, LLC $5,000 $7,973.68 Womancraft Fine Handcrafted Gifts, Inc. $5,000 $0 TOTAL $135,000 $165,000 *The grant and loan amounts in red were businesses that chose not to accept awards. **The$0 loan amounts are for businesses that did not apply for a loan.