HomeMy WebLinkAboutOrange County Small Business Development Center - 2020-06-15 CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: June 11, 2020
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Oliver Chi, City Manager
Subiect:
City Council Agenda Item #22 — Revised RCA 4 eQ 4ZVi) 1/
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A revised RCA has been submitted for agenda Item #22 for the June 15, 2020 City
Council meeting. This item is related to the approximately $4.75 million in funding the
City has received from Orange County Board of Supervisors Chairwoman Michelle
Steel from the Coronavirus Aid, Relief, and Economic Security Act, also known as the
CARES Act, to support small businesses affected by COVID-19,
The RCA is recommending the City utilize the Small Business Development Center
(SBDC) to help administer the program. Initially it was thought that the SBDC would
need to charge a fee to administer the program, thus an original RCA was submitted
with an accompanying agreement that included a cost $75,550. However, additional
information has been received by the SBDC that they will not be charging the
administrative fee and only then need and MOU to administer the COVID-19 Small
Business Relief Program based on a submitted scope of work. The RCA has been
revised to reflect this change in the recommended action from the approval of an
agreement with the SBDC to the authorization of the City Manager to enter into a
Memorandum of Understanding with the SBDC.
SUPPLEMENTAL
COMMUNICATION
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- CITY OF HUNTINGTON BEACH
- REQUEST FOR CITY COUNCIL ACTION
MEETING DATE: June 15, 2020
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Oliver Chi, City Manager
Subject:
Approve the COVID-19 Small Business Relief Program and Delegate to the City
Manager, with Approval as to Form by the City Attorney, the Authority to Execute
the Agreement with Orange County Small Business Development Center to
Administer the Program
Statement of Issue:
The City of Huntington Beach has received approximately $4.75 million in funding from
Orange County Board of Supervisors Chairwoman Michelle Steel from the Coronavirus
Aid, Relief, and Economic Security Act, also known as the CARES Act, to support small
businesses affected by COVID-19. Staff is recommending the creation of a COVID-19
Small Business Relief Program to provide grant funding to small businesses in
Huntington Beach.
Financial Impact:
There is no direct cost to the City to approve this program. The City entered into a
subrecipient agreement with the County of Orange to receive $4,747,521.59 in CARES
Act funding to allocate to businesses with Huntington Beach. These funds will cover the
entirety of the grant program, including the cost of administering the program through
the Orange County Small Business Development Center (SBDC) at a cost of $75,550,
or less than 2% of the available funding.
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Recommended Action:
A) Approve the COVID-19 Small Business Relief Program; and,
B) Delegate to the City Manager, with Approval as to Form by the City Attorney,
the Authority to execute a Memorandum of Understanding between the City of
Huntington Beach and the Orange County Small Business Development Center to
Administer the COVID-19 Small Business Relief Program" and to allow the City
Manager to take all administrative and budgetary actions to execute the program.
Alternative Action(s):
Do not approve the program as presented, and direct staff accordingly.
Analysis:
On May 26, 2020, the Orange County Board of Supervisors approved allocating $75
million of CARES Act funds to provide economic support to businesses impacted by the
COVID-19 pandemic. In Orange County's Second District, Supervisor Steel chose to
allocate funds directly to the cities in her district on a per capita basis. The City of
Huntington Beach has received $4,747,521.59 to provide direct support to small
businesses in our community.
To distribute these funds, staff is recommending the creation of a COVID-19 Small
Business Relief Program to provide up to $10,000 in grant funding to small businesses
in Huntington Beach.
The City of Huntington Beach's Economic Recovery Task Force, comprised of nine
local business leaders in various sectors, along with Council liaisons Mayor Semeta and
Councilmember Peterson, held a meeting on June 9, 2020, to review the draft program
parameters, and their feedback has been incorporated into the proposal presented
below for City Council consideration.
COVID-19 Small Business Relief Program
Proposed Funding Framework
The proposed funding framework consists of a tiered grant program ranging from
$5,000 - $10,000, based on the number of full-time or equivalent employees at the
business, as shown in the table below. Rather than a loan program that would cause
additional financial strain for businesses to repay at a future time, these grant monies
would provide small business with immediate financial assistance.
Number of Employees Grant Amount
21 - 30 Up to $10,000
11 -20 Up to $7,500
1 - 10 Up to $5,000
Grant funds can be used to reimburse businesses for any eligible expense related to the
COVID-19 pandemic, including but not limited to, rent, lease, or mortgage payments,
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utilities, accounts payable, payroll, utilities, personal protective equipment, inventory or
equipment, and other COVID-19 related operational or safety expenses. As part of the
application process, businesses must indicate how they will spend the grant funds if
awarded, and self-certify that the funds will only be used for expenses permitted under
the program.
Separately, the City Council recently approved the OneHB micro-grant program that will
provide businesses with 10 or fewer employees grant awards up to $5,000. These
funds will be distributed after the CARES Act funding is exhausted as an additional
mechanism to assist local small businesses.
Eligibility Criteria
The eligibility criteria listed below includes those required by Federal guidelines, as well
as the proposed criteria for the City of Huntington Beach.
a) Per Federal guidelines, eligible businesses are those that meet at least
one of the following criteria:
• Business must have been deemed non-essential and forced to
close
• Sales must be down more than 25% over previous 3 months
• Business must have laid off at least 1 part-time or full-time
employee
• 1 or more employee has contracted COVID-19 while at work
b) Additional proposed eligibility guidelines include:
• Independently owned /operated business
• Located in Huntington Beach with operations located in
commercial or industrial space
• Legal business in good standing with an active Huntington
Beach business license for at least 1 year
• Business with 30 full-time or equivalent employees or less
• Business with $15 million annual revenue or less over the past
3 years
• Priority will be given to those businesses that have been in
operation for at least 3 years
• Priority will be given to those businesses who have not received
other pandemic relief, such as the Paycheck Protection
Program (PPP) or Economic Injury Disaster Loan (EIDL)
• Priority will be given to those businesses in industries that have
been severely impacted by COVID-19, including retail,
restaurant, manufacturing, and personal service
establishments, and those who have not been allowed to
reopen for business
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Businesses who receive grant funding are encouraged to give
back to the community as a gesture of good will if and when
they are able to do so
Program Administration
In order to expedite the implementation of this program and getting much-needed grant
funding to small businesses in Huntington Beach, staff are proposing an agreement
procured under the expedited emergency procurement procedures with the Orange
County Small Business Development Center (SBDC). The SBDC program is a non-
profit, nationwide network that provides small business assistance, hosted by
universities, colleges, state economic development agencies and private partners, and
funded in part by the U.S. Congress through a partnership with the U.S. Small Business
Administration. Here in Orange County, SBDC is located within the California State
University, Fullerton.
The Orange County SBDC is helping to administer several small business loan and
grant programs being offered by other cities, such as Anaheim, Buena Park, and
Newport Beach, including CARES Act related funding. Due to their extensive expertise
and experience meeting the unique needs of these types of programs, staff is
recommending the City enter into a Memorandum of Understanding with the Orange
County SBDC to administer the program, including assisting with marketing, soliciting
and reviewing applications, performing the lottery selection process to ensure awards
are distributed fairly, and working with applicants one to one to answer questions and
provide business support (see Attachment#1). Initially it was thought that the SBDC
would need to charge a fee to administer the program, thus an original RCA was
submitted with an accompanying agreement that included a cost$75,550. However,
additional information has been received by the SBDC that they will not be charging the
administrative fee and only then need and MOU to administer the COVID-19 Small
Business Relief Program based on the attached scope of work.
Proposed Program Timeline
In order to distribute these funds to small businesses in our community as quickly as
possible, while ensuring the program is thoroughly marketed to all segments of the
business community to maximize awareness, fairness, and participation, staff has
coordinated with the SBDC to propose the program timeline below:
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Date Action Item
06/15/2020 City Council meeting to consider program.
06/16/2020 If approved, SBDC and the City will begin marketing the
program with a press release, electronic flyer, social
media posts, and targeted outreach.
06/16/2020 Online and paper application finalized.
06/17/2020 Zoom Webinar to introduce the program and answer
questions from the business community, led by Mayor
Semeta and SBDC
06/22/2020 Application portal opens at 8:00 a.m.
06/26/2020 Application portal closes at 5:00 p.m.
06/29/2020 SBDC verifies all eligible applicants and enters them into
a lottery.
07/01/2020 Lottery is held for all eligible applicants.
07/02/2020 SBDC works with each awardee to collect the necessary
supporting documents to provide the City.
07/03/2020- Ongoing Grants are submitted to the City, as awardees complete
their documentation for review.
07/06/2020- Ongoing City begins distributing grant awards. These funds will be
disbursed to businesses as quickly as possible, but no
later than 12/31/2020, per Federal guidelines.
Following the July 1, 2020, lottery for the COVID-19 Small Business Relief Program,
when businesses are notified if they will be receiving CARES Act grant funding, staff is
proposing to begin accepting applications for the OneHB micro-grant program.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. Draft Scope of Work submitted by the Orange County Small Business
Development Center to Administer the COVID-19 Small Business Relief Program
2. Subrecipient Agreement Between the County of Orange and the City of Huntington
Beach for Coronavirus Relief Funds for Economic Support Provided by the City
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City Council/ ACTION AGENDA June 15, 2020
Public Financing Authority
Huntington Beach Establishing the Gann Appropriation Limit for Fiscal Year 2020/2021" of
$1,001,044,445-1 and,
E) Approve budget adjustments to the FY 2020/2021 Proposed Budget in the Funds and
by the amounts contained in Attachment 2, Exhibit A-1; and,
F) Adopt Resolution No. 2020-44, "A Resolution of the City Council of the City of
Huntington Beach to grant another designated period for two years additional service
credit," authorizing the implementation of the CalPERS early retirement program, and
authorizing the City Manager to take all administrative and budgetary actions necessary to
implement the CalPERS early retirement program.
Public Speakers— None
Supplemental Communications (16)
Approved 6-1 (Hardy-No) to continue with public hearing closed to a Special Meeting on
June 29
21. 2 -1707 Public Hearing held —Approved Amendment No. 2 (SUBSTANTIAL)
to Fiscal Year 2019-20 Annual Action Plan for Community Development
Block Grant (CDBG) and HOME Investment Partnership (HOME)
Programs; and, Amendment to the 2015-2019 Citizen Participation Plan
Recommended Action:
A) Approve Amendment No. 2 (SUBSTANTIAL) to the City of Huntington Beach Fiscal
Year 2019-20 Annual Action Plan for the Community Development Block Grant and HOME
Investment Partnership Programs; and,
B) Approve an Amendment to the 2015-2019 Citizen Participation Plan; and,
C) Authorize the City Manager to sign all necessary U.S. Department of Housing and
Urban Development documents and take all other administrative and budgetary actions
necessary to utilize the Coronavirus Aid, Relief, and Economic Security Act funds.
Public Speakers— None
Supplemental Communications (1)
Approved 7-0
At 10:52 PM, a motion was made by Posey, second Hardy, to continue the meeting past 11:00 PM.
The motion carried by a 7-0 vote.
ADMINISTRATIVE ITEMS
22. 0-1697, Approved the COVID-19 Small Business Relief Program and Delegated to
the City Manager, with Approval as to Form by the City Attorney, the
Authority to Execute the Agreement with Orange County Small Business
Development Center to Administer the Program
Recommended Action:
A) Approve the COVID-19 Small Business Relief Program; and,
B) Delegate to the City Manager, with Approval as to Form by the City Attorney, the
City Council/ ACTION AGENDA June 15, 2020
Public Financing Authority
Authority to execute the "Memorandum of Understanding between the City of
Huntington Beach and the Orange County Small Business Development Center to
Administer the COVID-19 Small Business Relief Program" and to allow the City
Manager to take all administrative and budgetary actions to execute the program.
Approved 7-0 as amended by Supplemental Communication to revise Item B
23. 20-1712 TABLED TO A SPECIAL MEETING OF JUNE 29 - Consideration of an
Agreement with Choura Events to create a Pilot Program to close the
Second Block of Main Street to traffic for outdoor commerce as a response
to the COVID-19 pandemic
Recommended Action:
If the City Council does decide to move forward with the Pilot Project, authorize and direct
the City Manager to execute an Agreement with Choura Events in an amount not to exceed
$175,000 with a 20% contingency in a form approved by the City Attorney.
Approved 7-0 to table the item to a Special Meeting of June 29 to allow for another meeting
with the BID to address issues raised by Council.
COUNCILMEMBER ITEMS
24. 20-1714 Approved Item Submitted by Councilmember Carr - Reaffirmed the City's
Commitment to the Declaration of Policy About Human Dignity
Recommended Action:
In an effort to unify our Huntington Beach community, I am requesting that the City Council
vote to reaffirm the City's commitment to its Declaration of Policy About Human Dignity.
Approved 7-0
25. -1715 Approved Item Submitted by Councilmembers Barbara Delgleize and Kim
Carr - Resolution of the City Council to Stand Together in Unity as oneHB
Recommended Action:
We recommend that the City Council adopt the attached resolution which resolves that the City of
Huntington Beach stands together in unity against all forms of intolerance, racism, and hate,
as oneHB.
Approved 6-1 (Peterson-No) as amended by Supplemental Communication (revised
Resolution)
COUNCILMEMBER COMMENTS(Not Agendized) Reported: Posey, Delgleize, Hardy, Semeta,
Peterson, Carr, Brenden
ADJOURNMENT- 12:15 AM on June 16, 2020
The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is
Monday, July 6, 2020, at 4:00 PM in the Civic Center Council Chambers, 2000 Main Street, Huntington
Beach, California.
INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF
REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT
http://www.huntingtonbeachca.gov
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AM E R I C A*S SBDC Scope of Work
S City of Huntington Beach, CA
Small Business Grant Program
Scope of Work
The proposed scope of work for the City of Huntington Beach Small Business Grant Program is
for the SBDC to work with City staff to develop and implement a small business grant program.
The SBDC will contract directly with the City to assist in the design of the Small Business Grant
Program and to implement the following components of the program:
Content Development
The SBDC will work directly with City staff to develop the content of the Small Business Grant
Program. SBDC will assist in creating eligibility criteria, required qualifications, timelines, grant
dollar amounts and program guidelines.
Marketing
Flyers-
The SBDC will create a promotional E-flyer in both English and Vietnamese introducing the
Small Business Grant Program. The SBDC will work with City staff to make sure the program
and eligibility requirements are captured correctly.
Advertising-
The SBDC will conduct active,targeted advertising campaigns under its normal program
allowances to support the county program via paid Google, Facebook, YouTube, and Instagram
advertisements as appropriate.
City Virtual Press Conference-
To support the City's leadership in the development of this program, the SBDC will conduct a
City Virtual Press Conference and Kick Off, formally announcing the program. The SBDC in
partnership with the city will invite local partners, media and constituents to attend as well as
announce the application opening date.
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A M E R C ASS SBDC Scope of Work
SBDC. City of Huntington Beach, CA
Small Business Grant Program
Informational Webinars—
Targeted to potential applicants of the city's program,the SBDC will lead a series of
informational webinars to provide information on the program's eligibility, requirements,
important dates and required documentation. The SBDC will conduct webinars, in English and
Spanish. Webinars will be recorded and sent to the city to put on the city website.
Grant Application
The SBDC will create two types of applications for business owners to complete. The SBDC
will create an online portal that will reside as a link from the City to the SBDC website.
Applicants will fill in the questions directly on the portal or will have the ability to fill out a
paper application and drop it off at City Hall,prior to the end of the application window.
Paper Applications
Paper applications for the city's program will be available in a downloadable, fillable PDF
format. The paper application submissions will be accepted electronically via a secure SBDC
email address or in-person per the city's direction (e.g. city hall).
Online Application
The SBDC will develop and manage the online portal for application submission. The online
portal will support submission electronically in English, unless otherwise requested. The online
portal is hosted on a secure server whereas any application data can only be accessed with login
credentials residing with the SBDC. Any additional documentation required by business owners
can also be submitted via the online portal or via a secure, SBDC file transfer service.
Lottery
In the event that the Small Business Grant Program will be oversubscribed, the SBDC will assist
the City in creating a lottery system. The lottery in partnership with the SBDC will be conducted
based on a randomized, computer drawing on a selected day to create further engagement, via a
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A M EE R I C ASS BDC SBDC Scope of Work
' City of Huntington Beach, CA
Small Business Grant Program
live virtual event(E.g. Facebook Live). The awarded winners will be announced as appropriate
publicly and notified individually by the SBDC.
Grant Review Process
Selected applicants that have been awarded through the lottery system will begin the grant
review process. The SBDC will work with all awardees to complete the following items for their
grant award.
A complete application includes (some or all)the following:
1. Complete and Signed (electronically or scanned signature)
2. Tax Returns for 2018 and 2019—Corporate and Personal
3. Current Business License
4. Documentation supporting Employee wages/counts such as 940 and 941's
5. Business bank account
6. Profit and Loss Statements for 2019
7. Statement of Use of Funds
8. Business lease agreement
9. W-9
10. Grant Agreement
A complete application that does meet the required criteria will move toward the Grant Approval
Process. The Grant Approval process from this initial stage will move toward review by City
management that will certify all eligibility requirements to ensure these requirements have been
met.
An incomplete application package will be referred to an SBDC Consultant for one-on-one
consulting for the Consultant to assist the applicant to complete the package. The applicant will
have 14 days to send all documents to the SBDC, before their award is denied and the next
alternate is brought into the system. Should the applicant be unable to complete the package or
does not meet the criteria for applying for this funding the SBDC Consultant will assist the
applicant in finding alternative funding.
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A M EJ R ASS SBDC Scope of Work
'S City of Huntington Beach, CA
Small Business Grant Program
Grant Agreement
The SBDC will work with each awardee to complete a W-9 and grant agreement. The grant
agreement will certify that all funds will be spent on eligible expenses the applicant highlighted
in the grant application.
Disbursements
Once the grant review has been approved by the SBDC team, it will be sent to the City staff for
management approval and payment. The SBDC will send over all documents from each
awardee to the city team, for final authorization and record keeping.
Continued Support from the SBDC
The SBDC will continue to consult and train all awarded grantees and those that were denied
funding during the life of their business. The network has more than 100 business consultants
that will work with each applicant one-on-one, all at no cost to the business owner. The SBDC
receives funding from the Federal government and the state of California, to be able to deliver
services to the business owners throughout the region.
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SUBRECIPIENT AGREEMENT BETWEEN THE COUNTY OF ORANGE
AND THE CITY OF HUNTINGTON BEACH FOR CORONAVIRUS RELIEF
FUNDS FOR ECONOMIC SUPPORT PROVIDED BY THE CITY
This Subrecipient Agreement (the "Agreement") is made and entered into by and
between the County of Orange, a political subdivision of the State of California,
hereinafter referred to as "County," and the City of Huntington Beach, a municipal
corporation, hereafter referred to as "Subrecipient," with the County and
Subrecipient referred to as "Party," or collectively as "Parties."
WHEREAS, on February 26, 2020, the County Health Officer declared a local
health emergency based on an imminent and proximate threat to public health from
the introduction of a novel coronavirus (named"COVID-19") in Orange County (the
"COVID-19 Emergency"); and
WHEREAS, on March 2, 2020, the Board of Supervisors adopted Resolution
No. 2020-11 ratifying the local health emergency declared by the County's Health
Officer; and
WHEREAS, on March 4, 2020, the Governor of the State of California
declared a State of Emergency to exist in California as a result of the threat of
COVID-19; and
WHEREAS, on March 13, 2020, the President of the United States issued a
Proclamation on Declaring a National Emergency Concerning the COVID-19
Outbreak; and
WHEREAS, the Coronavirus Aid, Relief, and Economic Security (CARES)Act
was passed by Congress and signed into law by the President of the United States
on March 27th, 2020; and
WHEREAS, the CARES Act established the Coronavirus Relief Fund and the
County received an allocation of funds from the Coronavirus Relief Fund under
section 601(a) of the Social Security Act, as added by section 5001 of the CARES
Act; and
WHERAS, the CARES Act provides that payments from the Coronavirus
Relief Fund may only be used to cover costs that (1) are necessary expenditures
incurred due to the public health emergency with respect to the COVID-19; (2) were
not accounted for in the budget most recently approved as of March 27, 2020 (the
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date of enactment of the CARES Act) for the State or local government; and (3) were
incurred during the period that begins on March 1, 2020, and ends on December 30,
2020; and
WHEREAS, the Department of Treasury has issued guidance that the
County may transfer funds to a unit of government within its borders provided that
the transfer qualifies as a necessary expenditure incurred due to the public health
emergency and meets the other criteria of section 601(d) of the Social Security Act;
and
WHEREAS, the Department of Treasury has issued.guidance.that eligible
expenses include costs associated with the provision of economic support in
connection with the COVID-19 public health emergency, such as expenditures
related to the provision of grants to small businesses to reimburse the costs of
business interruption caused by required closures; and
WHEREAS, the Orange County Board of Supervisors has authorized the
distribution of$15 million in funds it received from the Coronavirus Relief Fund to
Orange County cities located in the Second District of the Orange County Board of
Supervisors (the "Second District") based on the 2010 population figures provided
by the United States Census Bureau for the economic support of small businesses
located in Subrecipient in the Second District; and
WHEREAS, in order to provide funds for the Subrecipient to pay necessary
expenditures it has or will incur providing economic support to small businesses in
the Second District due to the COVID-19 public health emergency, the Parties have
agreed that the County shall transfer the grant amount described herein to
Subrecipient,
NOW, THEREFORE, the Parties mutually agree as follows:
1. TERM OF AGREEMENT. The term of this Agreement begins on the
date when fully executed by the Parties, and terminates on June 30, 2021, or when
all of the Parties' obligations under this Agreement are fully satisfied, whichever
occurs earlier,
2. USE OF GRANT AMOUNT.
a, Subrecipient shall use the grant amount provided under this
Agreement to pay for Eligible Expenses that: (1) are necessary expenditures
incurred due to the public health emergency with respect to COVID-19; (2)
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were not accounted for in the budget most recently approved by Subrecipient
as of March 27, 2020; and (3) were incurred during the period that begins on
March 1, 2020, and ends on December 30, 2020.
b. The term "Eligible Expenses," as used in this Agreement, shall
mean expenses incurred and paid for by Subrecipient for the provision of
economic support to Small Businesses located in the Second District in
connection with the COVID-19 public health emergency, including
expenditures related to the provision of grants to Small Businesses to
reimburse the costs of business interruption caused by required closures and
unemployment insurance costs related to the COVID-19 public health
emergency if such costs will not otherwise be reimbursed by the federal
government.
C. The term "Small Business," as used in this Agreement, shall
mean an independently owned and operated business that is not dominant in
its field of operation, the principal office of which is located within the
jurisdictional boundaries of Subrecipient, the officers of which are domiciled
in Orange County, California, and which, together with affiliates, has 100 or
fewer employees, and average annual gross receipts of fifteen million dollars
($15,000,000) or less over the previous three years, or is a manufacturer with
100 or fewer employees.
d. The following is a nonexclusive list of expenditures that shall
not constitute Eligible Expenses payable from the grant amount:
(1) Damages covered by insurance.
(2) Payroll or benefits expenses for employees whose work
duties are not substantially dedicated to mitigating or responding to
the COVID-19 public health emergency.
(3) Expenses that have been or will be reimbursed under any
federal program, such as the reimbursement by the federal
government pursuant to the CARES Act of contributions by States to
State unemployment funds.
(4) Reimbursement to donors for donated items or services.
(5) Workforce bonuses other than hazard pay or overtime,
(6) Severance pay.
Page 3 of 9
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(7) Legal settlements.
e. Subrecipient must utilize the grant amount in accordance with
all Federal and State laws, including but not limited to 42 U.S,C. § 801,
subsection (d), and all applicable regulations and guidelines, including
guidance issued by the Department of Treasury regarding costs that are
payable from Coronavirus Relief Funds, which includes but is not limited to
Guidance for State, Territorial, Local, and Tribal Governments dated April
22, 2020 (Exhibit A) and Coronavirus Relief Fund Frequently Asked
Questions Updated as of May 4, 2020 (Exhibit B).
3. PAYMENT OF GRANT AMOUNT
a. The County shall pay Subrecipient a grant amount of
$4,747,521.59 within 10 business days of the full execution of this Agreement.
All of Subrecipient's expenditures of the grant amount must be for costs as
described in Paragraph 2 of this Agreement. The grant amount represents
the amount allocated to Subrecipient based on population pursuant to the
authority delegated by the Board of Supervisors to the County Executive
Officer on May 26, 2020,
b. It is understood that the County makes no commitment to fluid
this Agreement beyond the terms set forth herein.
C. If Subrecipient has not spent any portion of the grant amount it
has received under this Agreement to cover.Eligible Expenses by December
30, 2020, Subrecipient shall return to the County by February 1, 2021 the
amount remaining unspent as of December 30, 2020.
4. STATUTES AND REGULATIONS APPLICABLE TO GRANT.
Subrecipient must comply with all applicable requirements of State,. Federal, and
County of Orange laws, executive orders, regulations, program and administrative
requirements, policies and any other requirements governing this Agreement.
Subrecipient must comply with applicable State and Federal laws and regulations
pertaining to labor, wages, hours, and other conditions of employment. Subrecipient
must comply with new, amended, or revised laws, regulations, and/or procedures that
apply to the performance of this Agreement. These requirements include, but are not
limited to:
a. Office of Management and Budget (OMB) Circulars.
Subrecipient must comply with OMB Circulars, as applicable: OMB Circular
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932
A-21 (Cost Principles for Educational Institutions); OMB Circular A-87 (Cost
Principles for State, Local, and Indian Tribal Governments); OMB Circular
A-102 (Grants and Cooperative Agreements with State and Local
Governments); Common Rule, Subpart C for public agencies or OMB Circular
A-110 (Uniform Administrative Requirements for Grants and Other
Agreements with Institutions of Higher Education, Hospitals and Other Non-
Profit Organizations); OMB Circular A-122 (Cost Principles for Non-Profit
Organizations); OMB Circular A-133 (Audits of States, Local Governments,
and Non-Profit Organizations.
b. Single Audit Act, Since Federal funds are used in the
performance of this Agreement, Subrecipient must, as applicable, adhere to
the rules and regulations of the Single Audit Act (31 USC Sec. 7501 et seq,),
OMB Circular A-133 and any administrative regulation or field memoranda
implementing the Act.
C. Political Activity Prohibited,. None of the funds, materials,
property or services provided directly or indirectly under this Agreement may
be used for any partisan political activity, or to further the election or defeat
of any candidate for public office. Funds provided under this Agreement may
not be used for any purpose designed to support or defeat any pending
legislation or administrative regulation.
6. COMPLIANCE WITH GRANT REQUIREMENTS. To obtain the grant
funds, the Department of the Treasury required an authorized representative of the
County to agree to certain promises regarding the way the grant funds would be
spent. This certification is attached hereto as Exhibit C. By signing this certification,
the County made material representations to the Department of Treasury in order to
receive payments from the Department of Treasury pursuant to section 601(b) of the
Social Security Act, as .added by section 5001 of the Coronavirus Aid, Relief, and
Economic Security Act, Pub, L. No. 116-136, div. A, Title V (Mar. 27, 2020). In
accordance with Paragraph 11, Subrecipient agrees to indemnify, defend, and hold
harmless the County of Orange for any sums the State or Federal government
contends or determines Subrecipient used in violation of the certification.
Subrecipient shall immediately return to the County any funds the County or any
responsible State or Federal agency,' including the Department of Treasury,
determines the Subrecipient has used in a manner that is inconsistent with
Paragraph 2 of this Agreement. The provisions of this paragraph shall survive
termination of this Agreement.
Page 5 of 9
933
6, REPORTS.
a, Progress Report. On October 1, 2020, Subrecipient shall provide
a report to the County that shall: (1) identify the Eligible Expenses paid from
the grant amount; (2) identify the name and location of each Small Business
receiving economic support funded by the grant amount and the amounts
paid to each Small Business; (3) demonstrate how Subrecipient used the
grant amount consistent with the use requirements of Paragraph 2; and (4)
identify the balance of the grant amount that Subrecipient has not spent.
b, Final Report. Upon the earlier of Subrecipient's expenditure of
the balance of the grant amount or January 16, 2021, Subrecipient shall
provide a report to the County that shall: (1) identify the EIigible Expenses
paid from the grant amount; (2) identify the name and location of each Small
Business receiving economic support funded by the grant amount and the
amounts paid to each Small Business; (3) demonstrate how Subrecipient used
the grant amount consistent with the use requirements of Paragraph 2; and
(3) identify the balance of the grant amount that Subrecipient has not spent,
if any,
C. The Subrecipient shall provide a certification signed by its-chief
executive officer with each report required under this Paragraph 6 that the
statements contained in the report are true and that the expenditures
described in the report comply with the uses permitted under Paragraph 2.
d. Subrecipient shall maintain supporting documentation for the
reports required by this Paragraph 6 consistent with the requirements of
Paragraph 7.
7. RECORDS MAINTENANCE. Records, in their original form, must be
maintained in accordance with requirements prescribed by the County with respect
to all matters specified in this Agreement, Original forms are to be maintained on file
for all documents specified in this Agreement. Such records must be retained for a
period four (4) years after termination of this Agreement and after final disposition
of all pending matters. "Pending matters" include; but are not limited to, an audit,
litigation or other actions involving records. Records, in their original form pertaining
to matters covered by this Agreement, must at all times be retained within the
County of Orange unless authorization to remove them is granted in writing by the
County.
Page 6 of 9
934
8. RECORDS INSPECTION. At any time during normal business hours
and as often as either the County, Inspector General acting pursuant to the Inspector
General Act of 1978, or the Auditor General of the State of California may deem
necessary, Subrecipient must make available for examination all of its records with
respect to all matters covered by this Agreement. The County, Inspector General, and
the Auditor General of the State of California each have the authority to audit,
examine and make excerpts or transcripts from records, including all Subrecipient's
invoices, materials, payrolls, records of personnel, conditions of employment and
other data relating to all matters covered by this Agreement. Subrecipient agrees to
provide any reports requested by the County regarding performance of this
Agreement. With respect to inspection of Subrecipient's records, the County may
require that Subrecipient provide supporting documentation to substantiate
Subrecipient's expenses with respect to the Subrecipient's use or expenditure of the
grant amount.
9. INDEPENDENT CONTRACTOR. The Subrecipient shall be considered
an independent contractor and neither the Subrecipient, its employees, nor anyone
working under the Subrecipient shall be considered an agent or an employee of
County. Neither the Subrecipient, its employees nor anyone working under the
Subrecipient shall qualify for workers' compensation or other fringe benefits of any
kind through County.
10. PERMITS, LICENSES, APPROVALS, AND LEGAL OBLIGATIONS.
Subrecipient shall be responsible for obtaining any and all permits, licenses, and
approvals required for performing any work under this Agreement. Subrecipient
shall be responsible for observing and complying with any applicable Federal, State,
or local laws, or rules or regulations affecting any such work. Subrecipient shall
provide copies of permits and approvals to the County upon request.
11.' INDEMNITY, The Subrecipient agrees to indemnify, defend with
counsel approved in writing by County, and hold County, its elected and appointed
officials, officers, employees and agents and those special districts and agencies which
County's Board of Supervisors acts as the governing Board harmless from any claims,
demands or liability of any kind or nature, including but not limited to personal injury
or property damage, arising from or related to the Subrecipienes receipt of the grant
amount under this Agreement, including any claims that the grant amount paid by
the County under this Agreement were not used consistent with the restrictions on
the use of Coronavirus Relief Funds (42 U.S.C. § 801) and the regulations and
guidance issued by the Department of Treasury regarding the use of such funds. The
provisions of this paragraph shall survive the termination of this Agreement.
Page 7 of 9
935
1.
1 .
12. NOTICES. Any and all notices, requests, demands and other
communications contemplated, called for, permitted, or required to be given
hereunder shall be in writing. Any written communications shall be deemed to have
been duly given upon actual in-person delivery, if delivery is by direct hand, or upon
delivery on the actual day of receipt or no greater than four (4) calendar days after
being mailed by US certified or registered mail, return receipt requested, postage
prepaid, whichever occurs first. The date of mailing shall count as the first day. All
communications shall be addressed to the appropriate party at the address stated
herein or such other address as the parties hereto may designate by written notice
from time to time in the manner aforesaid.
Subrecipient:
Oliver Chi, City Manager
City of Huntington Beach
2000 Main Street
P.O. Box 190
Huntington Beach, CA 92648
County:
Arie Dana, Chief of Staff
Office of Supervisor Michelle Steel
Orange County Board of Supervisors
10 Civic Center Plaza
Santa Ana, CA 92701
13. DEFAULTS. Should either Party fail for any reason to comply with the
contractual obligations of this Agreement within the time specified by this
Agreement, the non-breaching Party reserves the right to terminate the Agreement,
reserving all eights under State and Federal law.
14. ATTORNEY FEES. In any action or proceeding to enforce or interpret
any provision of this Agreement, each Party shall bear its own attorney's fees, costs,
and expenses.
15. ENTIRE CONTRACT: This Agreement contains the entire contract
between the Parties with respect to the matters herein, and there are no restrictions,
promises, warranties or undertakings other than those set forth herein or referred to
Page 8 of 9
936
herein. No exceptions, alternatives, substitutes or revisions are valid or binding on
the parties unless authorized by the Parties in writing.
16. AMENDMENTS. No alteration or variation of the terms of this
Agreement shall be valid unless made in writing and signed by the parties; no oral
understanding or agreement not incorporated herein shall be binding on either of the
Parties; and no exceptions, alternatives, substitutes or revisions are valid or binding
on County unless authorized by County in writing.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the day and year dated below.
CITY OF HUNTINGTON BEACH COUNTY OF ORANGE
A California Municipal Corporation A political subdivision of the State of
California
By: By:
liver Chi,'-City Manager Wichelle Steel, C rwoman
Date: ��� nao Date: VA a 2
ATTEST
Robin Stieler
Clerk of the Board of Supervisors
County of Orange, California
APPROVED AS TO FORM:
By: By.
'�!M City Attorney Deputy County Counsel
Date: ��` �n��2� Date: .
Page 9 of 9
937
EXHIBIT A
Coronavirus Relief Fund
Guidance for State,Territorial,Local,and Tribal Governments
April 22,2020
The purpose of this document is to provide guidance to recipients of the funding available under section
601(a)of the Social Security Act,as added by section 5001 of the Coronavirus Aid,Relief,and Economic
Security Act("CARES Act"), The CARES Act established the Coronavirus Relief Fund(the"Fund")
and appropriated$I50 billion to the Fund. Under the CARES Act.,the Fund is to be used to make
payments for specified uses to States and certain local governments;the District of Columbia and U.S.
Territories(consisting of the Commonwealth of Puerto Rico, the United States Virgin Islands,Guam,
American Samoa,and the Commonwealth of the Northern Mariana Islands);and Tribal governments.
The CARES Act provides that payments from the Fund may only be used to cover costs that—
1, are necessary expenditures incurred due to the public health emergency with respect to
the Coronavirus Disease 2019(COVID-19);
2. were not accounted for in the budget most recently approved as of March 27,2020(the
date of enactment of the CARES Act)for the State or government; and
3. were incurred during the period that begins on March 1,2020, and ends on December 30,
2020.'
The guidance that follows sets forth the Department of the Treasury's interpretation of these limitations
on the permissible use of Fund payments.
Necessary expenditures incurred due to the public health emergency
The requirement that expenditures be incurred"due to"the public health emergency means that
expenditures must be used for actions taken to respond to the public health emergency. These may
include expenditures incurred to allow the State,territorial,local,or Tribal government to respond
directly to the emergency, such as by addressing medical or public health needs,as well as expenditures
incurred to respond to second-order effects of the emergency,such as by providing economic support to
those suffering from employment or business interruptions due to COVID-19-related business closures.
Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not
otherwise qualify under the statute. Although a broad range of uses is allowed,revenue replacement is
not a permissible use of Fund payments.
The statute also specifies that expenditures using Fund payments must be"necessary." The Department
of the Treasury understands this term broadly to mean that the expenditure is reasonably necessary for its
intended use in the reasonable judgment of the government officials responsible for spending Fund
payments.
Costs not accounted for in the budget most recently approved as of March 27,2020
The CARES Act also requires that payments be used only to cover costs that were not accounted for in
the budget most recently approved as of March 27, 2020. A cost meets this requirement if either(a)the
cost cannot lawfully be funded using a line item,allotment,or allocation within that budget or(b)the cost
See Section 601(d)of the Social Security Act,as added by section 5001 of the CARES Act.
1
938
is for a substantially different use from any expected use of funds in such a line item,allotment,or
allocation,
The"most recently approved"budget refers to the enacted budget for the relevant fiscal period for the
particular government,without taking into account subsequent supplemental appropriations enacted or
other budgetary adjustments made by that government in response to the COVID-19 public health
emergency. A cost is not considered to have been accounted for in a budget merely because it could be
met using a budgetary stabilization fund, rainy day fund,or similar reserve account.
Costs incurred during the period that begins on March 1,2020, and ends on December 30,2020
A cost is"incurred"when the responsible unit of government has expended funds to cover the cost.
Nonexclusive examples of eligible expenditures
Eligible expenditures include,but are not limited to,payment for:
1. Medical expenses such as:
• COVID-19-related expenses of public hospitals,clinics,and similar facilities.
• Expenses of establishing temporary public medical facilities and other measures to increase
COVID-19 treatment capacity, including related construction costs.
• Costs of providing COVID-19 testing, including aerological testing.
• Emergency medical response expenses, including emergency medical transportation,related
to COVID-19.
• Expenses for establishing and operating public telemedicine capabilities for COVID-19-
related treatment.
2. Public health expenses such as;
Expenses for communication and enforcement by State,territorial, local,and Tribal
governments of public health orders related to COVID-19.
• Expenses for acquisition and distribution of medical and protective supplies, including
sanitizing products and personal protective equipment,for medical personnel, police officers,
social workers,child protection services,and child welfare officers,direct service providers
for older adults and individuals with disabilities in community settings, and other public
health or safety workers in connection with the COVID-19 public health emergency.
• Expenses for disinfection of public areas and other facilities, e.g.,nursing homes,in response
to the COVID-19 public health emergency.
• Expenses for technical assistance to local authorities or other entities on mitigation of
COVID-I 9-related threats to public health and safety.
• Expenses for public safety measures undertaken In response to COVID-19.
• Expenses for quarantining individuals.
3. Payroll expenses for public safety,public health,health care,human services,and similar
employees whose services are substantially dedicated to mitigating or responding to the COVID-
19 public health emergency,
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939
4, Expenses of actions to facilitate compliance with COVID-19-related public health measures, such
as:
• Expenses for food delivery to residents, including, for example,senior citizens and other
vulnerable populations,to enable compliance with COVID-19 public health precautions.
• Expenses to facilitate distance learning, including technological improvements, in connection
with school closings to enable compliance with COVID-19 precautions.
• Expenses to improve telework capabilities for public employees to enable compliance with
COVID-19 public health precautions.
• Expenses of providing paid sick and paid family and medical leave to public employees to
enable compliance with COVID-19 public health precautions.
• COVID-I 9-related expenses of maintaining state prisons and county jails,including as relates
to sanitation and improvement of social distancing measures,to enable compliance with
COVID-19 public health precautions,
• Expenses for care for homeless populations provided to mitigate COVID-19 effects and
enable compliance with COVID-19 public health precautions.
5. Expenses associated with the provision of economic support in connection with the COVID-19
public health emergency,such as:
• Expenditures related to the provision of grants to small businesses to reimburse the costs of
business interruption caused by required closures,
• Expenditures related to a State,territorial, local,or Tribal government payroll support
program.
• Unemployment insurance costs related to the COVID-19 public health emergency if such
costs will not be reimbursed by the federal government pursuant to the CARES Act or
otherwise.
6. Any other COVID-19-related expenses reasonably necessary to the function of government that
satisfy the Fund's eligibility criteria.
Nonexclusive examples of ineligible expend1tures2
The following is a list of examples of costs that would not be eligible expenditures of payments from the
Fund.
1. Expenses for the State share of Medicaid,
2. Damages covered by insurance.
3. Payroll or benefits expenses for employees whose work duties are not substantially dedicated to
mitigating or responding to the COVID-19 public health emergency.
s In addition,pursuant to section 5001(b)of the CARES Act,payments from the Fund may not be expended for an
elective abortion or on research in which a human embryo is destroyed,discarded,or knowingly subjected to risk of
injury or death. The prohibition on payment for abortions does not apply to an abortion if the pregnancy is the result
of an act of rape or incest;or in the case where a woman suffers from a physical disorder,physical injury,or
physical illness,including a life-endangering physical condition caused by or arising from the pregnancy itself,that
would,as certified by a physician,place the woman in danger of death unless an abortion is performed.
Furthermore,no government which receives payments from the Fund may discriminate against a health care entity
on the basis that the entity does not provide,pay for,provide coverage of,or refer for abortions.
'See 42 C.F.R,§433.51 and 45 C.F.R.§75.306,
3
940
4. Expenses that have been or will be reimbursed under any federal program,such as the
reimbursement by the federal government pursuant to the CARES Act of contributions by States
to State unemployment funds.
S, Reimbursement to donors for donated items or services.
6. Workforce bonuses other than hazard pay or overtime.
7. Severance pay.
8. Legal settlements.
4
941
EXHIBIT B
Coronavirus Relief Fund
Frequently Asked Questions
Updated as of May 4,2020
The following answers to frequently asked questions supplement Treasury's Coronavirus Relief Fund
("Fund")Guidance for State,Territorial,Local,and Tribal Governments,dated April 22,2020,
("Guidance"),I Amounts paid from the Fund are subject to the.restrictions outlined in the Guidance and
set forth in section 601(d)of the Social Security Act,as added by section 5001 of the Coronavirus Aid,
Relief,and Economic Security Act("CARES Act').
Eligible Expenditures
Are governments required to submit proposed expenditures to Treasury for approval?
No. Governments are responsible for making determinations as to what expenditures are necessary due to
the public health emergency with respect to COVID-19 and do not need to submit any proposed
expenditures to Treasury.
The Guidance says thatfunding can be used to meet payroll expenses forpublic safety,public health,
health care, human services, and similar employees whose services are substantially dedicated to
mitigating or responding to the COVID-19 public health emergency. How does a government
determine whether payroll expenses for a given employee satisfy the "substantially dedicated"
condition?
The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by
the COVID-19 public health emergency. For this reason,and as a matter of administrative convenience
in light of the emergency nature of this program,a State,territorial,local,or Tribal government may
presume that payroll costs for public health and public safety employees are payments for services
substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the
chief executive(or equivalent) of the relevant government determines that specific circumstances indicate
otherwise.
The Guidance says that a cost was not accounted for in flee most recently approved budget tf the cost Is
for a substantially different use from any expected use of funds in such a line item,allotment,or
allocation. What would quality as a "substantially different use"for purposes of the Fund eligibility?
Costs incurred for a"substantially different use"include,but are not necessarily limited to,costs of
personnel and services that were budgeted for in the most recently approved budget but which,due
entirely to the COVID-19 public health emergency,have been diverted to substantially different
functions, This would include,for example,the costs of redeploying corrections facility staff to enable
compliance with COVID-19 public health precautions through work such as enhanced sanitation or
enforcing social distancing measures;the costs of redeploying police to support management and
enforcement of stay-at-home orders;or the costs of diverting educational support staff or faculty to
develop online learning capabilities,such as through providing information technology support that is not
part of the staff or faculty's ordinary responsibilities,
Note that a public function does not become a"substantially different use"merely because it is provided
from a different location or through a different manner. For example,although developing online
t The Guidance is available at littos//lioi�ie treastir Gov/sta�fi/t11es/13G/Coronavirus-Relief-Fund-Guidance-for-
St ate-Tan•itoria[-Local-and-Tribal-Goyerifitients:pd t;
942
instruction capabilities may be a substantially different use of funds,online instruction itself is not a
substantially different use of public funds than classroom instruction.
May a State receiving a payment transfer funds to a local government?
Yes,provided that the transfer qualifies as a necessary expenditure incurred due to the public health
emergency and meets the other criteria of section 60l(d)of the Social Security Act. Such funds would be
subject to recoupment by the Treasury Department if they have not been used in a manner consistent with
section 601(d)of the Social Security Act.
May a unit of local government receiving a Fu►►d pay►went transfer funds to another unit of
government?
Yes. For example, a county may transfer funds to a city,town,or school district within the county and a
county or city may transfer funds to its State,provided that the transfer qualifies as a necessary
expenditure incurred due to the public health emergency and meets the other criteria of section 601(d)of
the Social Security Act outlined in the Guidance. For example, a transfer from a county to a constituent
city would not be permissible if the fiends were intended to be used simply to fill shortfalls in government
revenue to cover expenditures that would not otherwise qualify as an eligible expenditure.
Is a Fund payment recipient required to transfer funds to a smaller, constituent unit of government
within its borders?
No. For example,a county recipient is not required to transfer funds to smaller cities within the county's
borders.
Are recipients required to use outer federal funds or seek reimbursement under outer federal programs
before using Fund payments to satisfy eligible expenses?
No. Recipients may use Fund payments for any expenses eligible under section 601(d)of the Social
Security Act outlined in the Guidance. Fund payments are not required to be used as the source of
funding of last resort. However,as noted below, recipients may not use payments from the Fund to cover
expenditures for which they will receive reimbursement.
Are there prohibitions on combining a transaction supported with Fund payments with other CARES
Act funding or COVID-19 relief Federal funding?
Recipients will need to consider the applicable restrictions and limitations of such other sources of
funding. In addition,expenses that have been or will be reimbursed under any federal program,such as
the reimbursement by the federal government pursuant to the CARES Act of contributions by States to
State unemployment funds, are not eligible uses of Fund payments.
Are Slates permitted to use Fund payments to support state unemployment Insurance funds generally?
To the extent that the costs incurred by a state unemployment insurance fund are incurred due to the
COVID-19 public health emergency,a State may use Fund payments to make payments to its respective
state unemployment insurance fund,separate and apart from such State's obligation to the unemployment
insurance fund as an employer. This will permit States to use Fund payments to prevent expenses related
to the public health emergency from causing their state unemployment insurance funds to become
insolvent.
2
943
Are recipients permitted to use Fund payments to pay for unemployment Insurance costs incurred by
the recipient as an employer?
Yes,Fund payments may be used for unemployment insurance costs incurred by the recipient as an
employer(for example, as a reimbursing employer)related to the COVID-19 public health emergency if
such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.
The Guidance states that the Fund may support a "broad range of uses"Including payroll expenses for
several classes of employees whose services are "substantially dedicated to mitigating or responding to
the COVID-19 public health emergency." What are some examples of types of covered employees?
The Guidance provides examples of broad classes of employees whose payroll expenses would be eligible
expenses under the Fund. These classes of employees include public safety,public health,health care,
human services,and similar employees whose services are substantially dedicated to mitigating or
responding to the COVID-19 public health emergency. Payroll and benefit costs associated with public
employees who could have been furloughed or otherwise laid off but who were instead repurposed to
perform previously unbudgeted functions substantially dedicated to mitigating or responding to the
COVID-19 public health emergency are also covered, Other eligible expenditures include payroll and
benefit costs of educational support staff or faculty responsible for developing online learning capabilities
necessary to continue educational instruction in response to COVID-19-related school closures. Please
see the Guidance for a discussion of what is meant by an expense that was not accounted for in the budget
most recently approved as of March 27,2020.
In some cases,first responders and critical health care workers that contract COVID-19 are eligible
for workers'compensation coverage. Is the cost of this expanded workers compensation coverage
eligible?
Increased workers compensation cost to the government due to the COVID-19 public health emergency
incurred during the period beginning March 1,2020,and ending December 30, 2020,is an eligible
expense.
If a recipient would have decommissioned equipment or not renewed a lease on parlicular office space
or equipment but decides to continue to use the equipment or to renew the lease Its order to respond to
the public health emergency,are the costs associated with continuing to operate the equipment or the
ongoing lease payments eligible expenses?
Yes. To the extent the expenses were previously unbudgeted and are otherwise consistent with section
601(d)of the Social Security Act outlined in the Guidance,such expenses would be eligible.
May recipients provide stipends to employees for eligible expenses(for example, a stipend to employees
to Improve telework capabilities) rattier than require employees to incur the eligible cost and submit for
reimbursement?
Expenditures paid for with payments from the Fund must be limited to those that are necessary due to the
public health emergency. As such,unless the government were to determine that providing assistance in
the form of a stipend is an administrative necessity,the government should provide such assistance on a
reimbursement basis to ensure as much as possible that funds are used to cover only eligible expenses.
3
944
May Fiend payments be used for COVID-19 public health emergency recovery planning?
Yes. Expenses associated with conducting a recovery planning project or operating a recovery
coordination office would be eligible, if the expenses otherwise meet the criteria set forth in section
601(d)of the Social Security Act outlined in the Guidance.
Are expenses associated with contact tracing eligible?
Yes,expenses associated with contract tracing are eligible.
To what extent may a government use Fund payments to support the operations of private hospitals?
Governments may use Fund payments to support public or private hospitals to the extent that the costs are
necessary expenditures incurred due to the COVID-19 public health emergency, but the form such
assistance would take may differ. In particular,financial assistance to private hospitals could take the
form of a grant or a short-term loan.
play payments from the Fund be used to assist individuals with enrolling In a government benefit
program for those who have been laid off due to COVID-19 and thereby lost health insurance?
Yes, To the extent that the relevant government official determines that these expenses are necessary and
they meet the other requirements set forth in section 601(d)of the Social Security Act outlined in the
Guidance,these expenses are eligible.
May recipients use Fund payments to facilitate livestock depopulation Incurred by producers due to
supply chain disruptions?
Yes,to the extent these efforts are deemed necessary for public health reasons or as a form of economic
support as a result of the COVID-19 health emergency.
Would providing a consumer grant program to prevent eviction and assist in preventing homelessness
be considered an eligible expense?
Yes,assuming that the recipient considers the grants to be a necessary expense incurred due to the
COVID-19 public health emergency and the grants meet the other requirements for the use of Fund
payments under section 601(d)of the Social Security Act outlined in the Guidance. As a general matter,
providing assistance to recipients to enable them to meet property tax requirements would not be an
eligible use of funds, but exceptions may be made in the case of assistance designed to prevent
foreclosures.
May recipients create a `payroll support program"for public employees?
Use of payments from the Fund to cover payroll or benefits expenses of public employees are limited to
those employees whose work duties are substantially dedicated to mitigating or responding to the
COV113-19 public health emergency.
May recipients rise Find payments to cover employment and training programs for employees that
have been furloughed due to tine public health emergency?
Yes,this would be an eligible expense if the government determined that the costs of such employment
and training programs would be necessary due to the public health emergency.
4
945
May recipients use Fund payments to provide emergency financial assistance to individuals and
families directly impacted by a loss of income due to the COVID-I9 public health emergency?
Yes, if a government determines such assistance to be a necessary expenditure. Such assistance could
include,for example, a program to assist individuals with payment of overdue rent or mortgage payments
to avoid eviction or foreclosure or unforeseen financial costs for funerals and other emergency individual
needs. Such assistance should be structured in a manner to ensure as much as possible,within the realm
of what is administratively feasible,that such assistance is necessary.
The Guidance provides that eligible expenditures may include expenditures related to the provision of
grants to small businesses to reimburse the costs of business interruption caused by required closures.
What is meant by a "small business,"and is the Guidance intended to refer only to expenditures to
cover administrative expenses of such a grant program?
Governments have discretion to determine what payments are necessary. A program that is aimed at
assisting small businesses with the costs of business interruption caused by required closures should be
tailored to assist those businesses in need of such assistance. The amount of a grant to a small business to
reimburse the costs of business interruption caused by required closures would also be an eligible
expenditure under section 601(d)of the Social Security Act,as outlined in the Guidance.
The Guidance provides that expenses associated with the provision of economic support in connection
with lite public health emergency,such as expenditures related to the provision ofgrants to small
businesses to reimburse the costs of business interruption caused by required closures, would
constitute eligible expenditures of Fund payments Would such expenditures be eligible in the absence
of a stay-at-home order?
Fund payments may be used for economic support in the absence of a stay-at-home order if such
expenditures are determined by the government to be necessary. This may include,for example,a grant
program to benefit small businesses that close voluntarily to promote social distancing measures or that
are affected by decreased customer demand as a result of the COVID-19 public health emergency.
May Fund payments be used to assist Impacted property owners with the payment of their property
taxes?
Fund payments may not be used for government revenue replacement, including the provision of
assistance to meet tax obligations.
May Fund payments be used to replace foregone utility fees? If not,cat)Fund payments be used as a
direct subsidy payment to all utility accountholders?
Fund payments may not be used for government revenue replacement, including the replacement of
unpaid utility fees. Fund payments may be used for subsidy payments to electricity account holders to the
extent that the subsidy payinehts are deemed by the recipient to be necessary expenditures incurred due to
the COVID-19 public health emergency and meet the other criteria of section 601(d)of the Social
Security Act outlined in the Guidance. For example, if determined to be a necessary expenditure,a
government could provide grants to individuals facing economic hardship to allow them to pay their
utility fees and thereby continue to receive essential services.
Could Find pay»rents be used for capital improvement projects that broadly provide potential
economic development in a community?
5
946
In general,no. If capital improvement projects are not necessary expenditures incurred due to the
COVID-19 public health emergency,then Fund payments may not be used for such projects,
However,Fund payments may be used for the expenses of, for example,establishing temporary public
medical facilities and other measures to increase COVID-19 treatment capacity or improve mitigation
measures, including related construction costs.
The Guidance Includes workforce bonuses as an example of lnellglble expenses but provides that
hazard pay would be eligible if otherwise determined to be a necessary expense, Is there a specific
definition of"hazard pay"?
Hazard pay means additional pay for performing hazardous duty or work involving physical hardship,in
each case that is related to COVID-19.
The Guidance provides that ineligible expenditures include "(playroll or benefits expenses for
employees whose work duties are not substantially dedicated to mitigating or responding to the
COVID-19 public health emergency." Is this intended to relate only to public employees?
Yes, This particular nonexclusive example of an ineligible expenditure relates to public employees. A
recipient would not be permitted to pay for payroll or benefit expenses of private employees and any
financial assistance(such as grants or short-term loans)to private employers are not subject to the
restriction that the private employers' employees must be substantially dedicated to mitigating or
responding to the COVID-19 public health emergency.
May counties pre pay with CARES Act funds for expenses such as a one or two year facility lease,
such as to house staff hired in response to COVID-19?
A government should not make prepayments on contracts using payments from the Fund to the extent that
doing so would not be consistent with its ordinary course policies and procedures.
Questions Related to Administration of Fund Payments
Do governments have to return unspent fiends to Treasury?
Yes. Section 601(f)(2)of the Social Security Act,as added by section 5001(a)of the CARES Act,
provides for recoupment by the Department of the Treasury of amounts received from the Fund that have
not been used in a manner consistent with section 601(d)of the Social Security Act. If a government has
not used funds it has received to cover costs that were incurred by December 30,2020,as required by the
statute,those funds must be returned to the Department of the Treasury.
What records must be kept by governments receiving payment?
A government should keep records sufficient to demonstrate that the amount of Fund payments to the
government has been used in accordance with section 601(d)of the Social Security Act
May recipients deposit Fund payments into interest bearing accounts?
Yes, provided that if recipients separately invest amounts received from the Fund,they must use the
interest earned or other proceeds of these investments only to cover expenditures incurred in accordance
with section 601(d)of the Social Security Act and the Guidance on eligible expenses. If a government
deposits Fund payments in a government's general account,it may use those funds to meet immediate
cash management needs provided that the full amount of the payment is used to cover necessary
6
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expenditures. Fund payments are not subject to the Cash Management Improvement Act of 1990,as
amended.
May governments retain assets purchased ipith payments from the Tund?
Yes,if the purchase of the asset was consistent with the limitations on the eligible use of funds provided
by section 601(d)of the Social Security Act.
What rules apply to the proceeds of disposition or sale of assets acquired using payments from th e
Fund?
If such assets are disposed of prior to December 30,2020, the proceeds would be subject to the
restrictions on the eligible use of payments from the Fund provided by section 601(d)of the Social
Security Act.
7
948
EXHIBIT C
W. on of xan
t . ge
County Executive Office
April 13,2020
I, Frank Kim,am the chief executive of the County of Orange,and 1 certify that:
1. 1 have the authority on behalf of the County of Orange to request direct payment from the
Department of the Treasury ('Treasury') pursuant to section 601(b) of the Social Security Act, as,
added by section 5001 of the Coronavirus Aid,Relief,and Economic Security Act,Pub.L.No. 116-
136,div. A,Title V(Mar.27,2020).
2, 1 understand that Treasury wiII rely on this certification as a material representation in making a
direct payment to the County of Orange,
3. The County of Orange's proposed uses of the funds provided as direct payment under section
601(b)of the Social Security Act will be used only to cover those costs that-
a. are necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019(COVID-19);
b, were not accounted for in the budget most recently approved as of March 27,2020,
for[insert name of local government entity];and
c. were incurred during the period that begins on March 1, 2020, and ends on
December 30,2020.
By Frank Kim
Slgnmvre;
Title: .County Executive Officer
Date- 4/13120
PAPERWORK REDUCTION ACT NOTICE
The information collected will be used for the U.S. Government to process requests for support. The
estimated burden associated with this collection of information is two hour per response. Comments
concerning the accuracy of this burden estimate and suggestions for reducing this burden should be
directed to the Office of Privacy, Transparency and Records, Department of the Treasury, 1500
Pennsylvania Ave,,MW.,Washington,D,C,20220.DO NOT send the form to this address.An agency may
not conduct or sponsor, and a person is not required to respond to, a collection of information unless it
displays a valid control number assigned by OMB,
333 W.Santa Ana Blvd.,3^Floor,Santa Ana,CA 927014062 v Phone(714)&MQ01 Pax(7141 B34-018
949
COVID - 3.9 SMALL BUSINESS
RELIEF PROGRAM
City Council Meeting
June 15,, 2020
CARES ACT FUNDING FOR SMALL BUSINESSES
The Orange County Board of Supervisors voted to transfer the allocation Of$75 million in business
grants funded by the CARES Act to each supervisorial district,with each district receiving $15 million
In the end District,Supervisor Steel made the decision to allocate the$15 million amongst each city
on a per capita basis
• Huntington Beach has received $4,747621.59 in CARES Act funding to support local small businesses
City tasked with developing program parameters while adhering to all Federal guidelines
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PROGRAM DEVELOPMENT
• Mayor Semeta worked with staff to develop a preliminary
funding framework to present to the Economic Recovery
Task Force , �tiNcr
• The Economic Recovery Task Force consists of nine local
business leaders from various industries,along with Council
liaisons Mayor Semeta and Councilmember Peterson �;�uNT ;
HUNTINGTON BEACH RECEIVES$4.1M OF CARES ACT FUNDS
• The Task Force met on June g to review the preliminary
proposal and recommend modifications based on their
industry expertise and experience as business owners
• Their feedback has been incorporated into the proposal for
City Council consideration this evening
HUNTINGTON BEACH
�N�hTINGTp
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ECONOMIC RECOVERYTASK FORCE
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Specifically,Task Force members reviewed draft parameters and provided feedback on:
• Possible funding framework:
• Grant program vs.loan program
• Tiered grant program by number of employees
• Grant amounts by tier
• Eligibility guidelines, such as length of time in business
• Businesses types to prioritize, such as those businesses who have not yet been able to reopen and
who have been more severely impacted
• Program administration and timeline details
��NTING)py
• . • SMALL BUSINESS RELIEF PROGRAM
• The proposed COVID-19 Small Business Relief Program would provide grants up to
$io,000 to HB small businesses
• Grant amounts based on the number of full-time or equivalent employees at the business,
as shown below:
21-30 .to'. 0,00
31-20 .to$7,500
1-10 .to . .0
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ELIGIBILITY CRITERIA
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• Per Federal guidelines, eligible businesses must meet at least one of the following criteria:
• Business must have been deemed non-essential and forced to close
• Sales must be down more than 25%over previous 3 months
• Business must have laid off at least 1 part-time or full-time employee
• i or more employees have contracted COVID-ig while at work
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ELIGIBILITY CRITERIA
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• Additional proposed eligibility guidelines include:
• Independently owned/operated business
• Located in Huntington Beach with operations located in commercial or industrial space
• Legal business in good standing with an active Huntington Beach business license for at least 1 year
• Business with 30 full-time or equivalent employees or less
• Business with$15 million annual revenue or less over the past 3 years
• Priority will be given to those businesses that have been in operation for at least 3 years
• Priority will be given to those businesses who have not received other pandemic relief,such as the
Paycheck Protection Program(PPP)or Economic Injury Disaster Loan(EIDL)
• Priority will be given to those businesses in industries that have been severely impacted by COVID-
ig, including retail,restaurant, manufacturing,and personal service establishments, and those who
have not been allowed to reopen for business
• Request for businesses to give back to the community as a gesture of good will in the future
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PROGRAM ADMINISTRATION �$
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• The Orange County Small Business Development Center(OC SBDC)is helping to administer
several small business loan and grant programs,such as Anaheim, Buena Park,and Newport
Beach, including CARES Act related funding
• Due to their extensive expertise and experience with the unique needs of these types of
programs,staff is recommending the City enter into a Memorandum of Understanding(MOU)
with OC SBDC to administer the program
• Initially, it was thought that the SBDC would need to charge an administrative fee,thus an
original RCA was submitted with an accompanying agreement that included a cost$75,550
• However,the SBDC updated staff that they will not be charging the administrative fee, so an
MOU would be preferred
6/16/2020
PROGRAMTIMELINE _`'• ••
City Council meeting to consider program
If approved,SBDC and the City will begin marketing the program with a press
release,electronic flyer,social media posts,and targeted outreach
June 16 Online and paper application finalized
Zoom Webinar to introduce the program and answer questions from the
June 17
business community,led by Mayor Semeta and SBDC
Application portal opens at 8:oo a.m.
Application portal closes at 5:oo p.m.
SBDC verifies all eligible applicants and enters them into a lottery
Lottery is held for all eligible applicants
SBDC works with each awardee to collect the necessary supporting documents
to provide the City
Ongoing Grants are submitted to City,as awardees complete documentation for review
City begins distributing grant awards.These funds will be disbursed to businesses
July 6-Ongoing as quickly as possible,but no later than 1-2/31/2020,per Federal guidelines
STAFF RECOMMENDATIONS
Recommended
A. Approve the • Pro.
to execute a Memorandum of Understanding between the City of Huntington Beach and the
Orange County Small Business Development Center toAdminister the COVID-3,9 Small
Business Relief Program"and to allow the City Managerto take all administrative and
budgetary actions to execute the program.
B. Delegate to the City Manager,with Approval as to Form by the City Attorney,the Authority
6/16/2020
QUESTIONS ?
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City of Huntington Beach
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File #: 20-1697 MEETING DATE: 6/15/2020
REQUEST FOR CITY COUNCIL ACTION 'f
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager '
PREPARED BY: Oliver Chi, City Manager f
Subject:
Approve the COVID-19 Small Business Relief Program and Delegate to the City Manager, with
Approval as to Form by the City Attorney, the Authority to Execute the Agreement with Orange
County Small Business Development Center to Administe.rihe Program
Statement of Issue:
The City of Huntington Beach has received approximately $4.75 million in funding from Orange
County Board of Supervisors Chairwoman Michelle Steel from the Coronavirus Aid, Relief, and
Economic Security Act, also known as the CARES,Act, to support small businesses affected by
COVID-19. Staff is recommending the creation of a COVID-19 Small Business Relief Program to
provide grant funding to small businesses in Huntington Beach.
Financial Impact:
There is no direct cost to the City to approve this program. The City entered into a subrecipient
agreement with the County of Orange/to receive $4,747,521.59 in CARES Act funding to allocate to
businesses with Huntington Beach./These funds will cover the entirety of the grant program,
including the cost of administeringAhe program through the Orange County Small Business
Development Center (SBDC) at;a cost of$75,550, or less than 2% of the available funding.
Recommended Action: Z'
A) Approve the COVID-19 Small Business Relief Program; and,
i
B) Delegate to the City Manager, with Approval as to Form by the City Attorney, the Authority
Execute the "Agreement between the City of Huntington Beach and the Orange County Small
Business Development Center to Administer the COVID-19 Small Business Relief Program" and to
allow the City Manager to take all administrative and budgetary actions to execute the program.
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Alternative,Action(s):
Do not 7
rove the program as presented, and direct staff accordingly.
Anal is:
y of Huntington Beach Page 1 of 5 Printed on 6/10/2020
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File #: 20-1697 MEETING DATE: 6/15/2020
On May 26, 2020, the Orange County Board of Supervisors approved allocating $75 million of
CARES Act funds to provide economic support to businesses impacted by the COVID-19 pandemic.
In Orange County's Second District, Supervisor Steel chose to allocate funds directly to the cities in
her district on a per capita basis. The City of Huntington Beach has received $4,747,521.591/to
provide direct support to small businesses in our community.
To distribute these funds, staff is recommending the creation of a COVID-19 Small Business Relief
Program to provide up to $10,000 in grant funding to small businesses in Huntington Beach.
The City of Huntington Beach's Economic Recovery Task Force, comprised of nine local business
leaders in various sectors, along with Council liaisons Mayor Semeta and Councilmember Peterson,
held a meeting on June 9, 2020, to review the draft program parameters,/and their feedback has
been incorporated into the proposal presented below for City Council consideration.
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COVID-19 Small Business Relief Program
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Proposed Funding Framework
The proposed funding framework consists of a tiered grant.,program ranging from $5,000 - $10,000,
based on the number of full-time or equivalent employees/at the business, as shown in the table
below. Rather than a loan program that would cause additional financial strain for businesses to
repay at a future time, these grant monies would provide small business with immediate financial
assistance.
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Number of Employees Grant Amount
21 - 30 Up to $10„000
11 - 20 Up to $1500
1 - 10 jUp to`$5,000
Grant funds can be used to reimburs businesses for any eligible expense related to the COVID-19
pandemic, including but not limited to, rent, lease, or mortgage payments, utilities, accounts payable,
payroll, utilities, personal protective equipment, inventory or equipment, and other COVID-19 related
operational or safety expenses`. As part of the application process, businesses must indicate how
they will spend the grant funds if awarded, and self-certify that the funds will only be used for
expenses permitted under/the program.
Separately, the City Council recently approved the OneHB micro-grant program that will provide
businesses with 10 or fewer employees grant awards up to $5,000. These funds will be distributed
after the CARES Act funding is exhausted as an additional mechanism to assist local small
businesses. r
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Eligibility Criteria
The eligibility criteria listed below includes those required by Federal guidelines, as well as the
proposed criteria for the City of Huntington Beach.
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City
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File #: 20-1697 MEETING DATE: 6/15/2020
a) Per Federal guidelines, eligible businesses are those that meet at least one of the
following criteria:
• Business must have been deemed non-essential and forced to close
• Sales must be down more than 25% over previous 3 months
• Business must have laid off at least 1 part-time or full-time employee
• 1 or more employee has contracted COVID-19 while at work
b) Additional proposed eligibility guidelines include: f ,
• Independently owned / operated business 6'
t
• Located in Huntington Beach with operations located`in commercial or industrial
,f
space
• Legal business in good standing with an active/Huntington Beach business
license for at least 1 years.
• Business with 30 full-time or equivalent,employees or less
• Business with $15 million annual revenue or less over the past 3 years
• Priority will be given to those businesses that have been in operation for at least
3 years F
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• Priority will be given to those businesses who have not received other pandemic
relief, such as the Paycheck Protection Program (PPP) or Economic Injury
Disaster Loan (EIDL)
• Priority will be given to those businesses in industries that have been severely
impacted by COWD-19, including retail, restaurant, manufacturing, and personal
service establishments, and those who have not been allowed to reopen for
business
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• Businesses who receive grant funding are encouraged to give back to the
community as a gesture of good will if and when they are able to do so
Program Administration
In order to expedite the implementation of this program and getting much-needed grant funding to
small businesses inr,Huntington Beach, staff are proposing an agreement procured under the
expedited emergency procurement procedures with the Orange County Small Business Development
Center (SBDC)./ he SBDC program is a non-profit, nationwide network that provides small business
assistance, hosted by universities, colleges, state economic development agencies and private
partners, and funded in part by the U.S. Congress through a partnership with the U.S. Small
Business ./ministration. Here in Orange County, SBDC is located within the California State
University, Fullerton.
The range County SBDC is helping to administer several small business loan and grant programs
Cit of Huntington Beach Page 3 of 5 Printed on 6/10/2020
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File #: 20-1697 MEETING DATE: 6/15/2020
being offered by the County and other cities, such as Newport Beach, including CARES Act related
funding. Due to their extensive expertise and experience meeting the unique needs of these types of
programs, staff is recommending the City enter into an agreement with the Orange County SBDC to
administer the program, including assisting with marketing, soliciting and reviewing applications,
performing the lottery selection process to ensure awards are distributed fairly, and working with
applicants one to one to answer questions and provide business support (see Attachment #1). The
cost of this agreement with Orange County SBDC would be $75,550, a modest fee,of less than 2% of
the available funding.
Proposed Program Timeline f`
In order to distribute these funds to small businesses in our community as"`quickly as possible, while
ensuring the program is thoroughly marketed to all segments of the business community to maximize
awareness, fairness, and participation, staff has coordinated with the"SBDC to propose the program
timeline below: '
Date Action Item
06/15/2020 City Council meeting to consider program.
06/16/2020 If approved, SBDC and the City will begin marketing the
program with a press release, electronic flyer, social media
posts, and targeted outreach-,,
06/16/2020 Online and paper application finalized.
06/17/2020 Zoom Webinar to introduce the program and answer
questions from the business community, led by Mayor Semeta
and SBDC `
06/22/2020 Application portal opens at 8:00 a.m.
06/26/2020 Application portal closes at 5:00 p.m.
06/29/2020 SBDC verifies all eligible applicants and enters them into a
lottery.
07/01/2020 Lottery is/held for all eligible applicants.
07/02/2020 SBDC Corks with each awardee to collect the necessary
supporting documents to provide the City.
07/03/2020 - Ongoing Grants are submitted to the City, as awardees complete their
documentation for review.
07/06/2020 - Ongoing City begins distributing grant awards. These funds will be
disbursed to businesses as quickly as possible, but no later
p d, than 12/31/2020, per Federal guidelines.
Following the July�1, 2020, lottery for the COVID-19 Small Business Relief Program, when
businesses are-notified if they will be receiving CARES Act grant funding, staff is proposing to begin
accepting applications for the OneHB micro-grant program.
J
Environmental Status:
Not applicable.
Z
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File #: 20-1697 MEETING DATE: 6/15/2020
Strategic Plan Goal:
Strengthen long-term financial and economic sustainability
Attachment(s):
1. Draft Agreement between the City of Huntington Beach and the Orange County Small.Business
Development Center to Administer the COVID-19 Small Business Relief Program
2. Subrecipient Agreement Between the County of Orange and the City of Huntington Beach for
Coronavirus Relief Funds for Economic Support Provided by the City
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DRAFT
PROFESSIONAL SERVICES CONTRACT BETWEEN
THE CITY OF HUNTINGTON BEACH AND
SMALL BUSINESS DEVELOPMENT CENTER(SBDC)
FOR
DEVELOPMENT OF A SMALL BUSINESS GRANT PROGRAM
THIS AGREEMENT ("Agreement") is made and entered into by and between the
City of Huntington Beach, a municipal corporation of the State of California, hereinafter
f'
referred to as "CITY," and , a SMALL BUSINESS DEVELOPMENT CENTER (SBDC)
hereinafter referred to as "CONSULTANT."
of
WHEREAS, CITY desires to engage the services of a consultant to work with City
staff to develop the content of the Small Business Grant Program; and
Pursuant to documentation on filen the office of the City Clerk, the provisions of
the Huntington Beach Municipal//ode, Chapter 3.03, relating to procurement of
professional service contracts have/ been complied with; and
CONSULTANT has/,een selected to perform these services,
NOW, THEREFORE, it is agreed by CITY and CONSULTANT as follows:
1. SCORE OF SERVICES
C NSULTANT shall provide all services as described in Exhibit "A,"
which is attta&d hereto and incorporated into this Agreement by this reference. These
services shall sometimes hereinafter be referred to as the "PROJECT."
CONSULTANT hereby designates Mike Daniel who shall represent it and
be/its sole contact and agent in all consultations with CITY during the performance of this
/20-8664/230396
greement.
agree/surfnet/professional svcs 50 to 100
19-204133 1 of 13
905
3. TERM; TIME OF PERFORMANCE
Time is of the essence of this Agreement. The services of CONSULTANT
are to commence on , 20 (the "Commencement Date"). This Agreement shall
Alf
automatically terminate three (3) years from the Commencement Date, unless�extended or
sooner terminated as provided herein. All tasks specified in Exhibit• "A" shall be
completed no later than three years (3) from the Commencement,,Date. The time for
performance of the tasks identified in Exhibit "A" are generally to be shown in Exhibit
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"A." This schedule may be amended to benefit the PROJECT if mutually agreed to in
writing by CITY and CONSULTANT.
In the event the Commencement/&te precedes the Effective Date,
CONSULTANT shall be bound by all terms ands"conditions as provided herein.
4. COMPENSATION
In consideration of the performance of the services described herein, CITY
agrees to pay CONSULTANT onAa✓time and materials basis at the rates specified in
Exhibit "B," which is attacheda=hereto and incorporated by reference into this Agreement,
a fee, including all costs andse penses, not to exceed Seventy Five Thousand Five Hundred
Fifty Dollars ($75,550) °
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5. EXTRA WORK
InAthe event CITY requires additional services not included in Exhibit "A"
or changes ini the scope of services described in Exhibit "A," CONSULTANT will
undertake/such work only after receiving written authorization from CITY. Additional
compensation for such extra work shall be allowed only if the prior written approval of
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CITY is obtained.
20-8664/230396 agree/surfnet/professional svcs 50 to 100
05/19-204133 2 of 13
906
6. METHOD OF PAYMENT
CONSULTANT shall be paid pursuant to the terms of Exhibit
7. DISPOSITION OF PLANS, ESTIMATES AND OTHER DOCUMENTS
/,
CONSULTANT agrees that title to all materials prepared hereunder,
including, without limitation, all original drawings, designs, reports,/both field and office
notices, calculations, computer code, language, data or programs, maps, memoranda,
letters and other documents, shall belong to CITY, and CONSULTANT shall turn these
materials over to CITY upon expiration or terminat on of this Agreement or upon
PROJECT completion, whichever shall occur fir ('These materials may be used by CITY
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as it sees fit.
8. HOLD HARMLESS , f
A. CONSULTANT hereby agrees to protect, defend, indemnify and
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hold harmless CITY, its officers; elected or appointed officials, employees, agents and
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volunteers from and againstany and all claims, damages, losses, expenses, judgments,
demands and defense costs (including, without limitation, costs and fees of litigation of
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every nature or liability of any kind or nature) arising out of or in connection with
CONSULTANT's,�-'(or CONSULTANT's subcontractors, if any) negligent (or alleged
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negligent) performance of this Agreement or its failure to comply with any of its
obligations/contained in this Agreement by CONSULTANT, its officers, agents or
employees except such loss or damage which was caused by the sole negligence or willful
mis onduct of CITY. CONSULTANT will conduct all defense at its sole cost and expense
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and CITY shall approve selection of CONSULTANT's counsel. This indemnity shall
apply to all claims and liability regardless of whether any insurance policies are applicable.
20-8664/230396 agree/surfnet/professional sves 50 to 100
05/19-204133 3 of 13
907
The policy limits do not act as limitation upon the amount of indemnification to be
provided by CONSULTANT.
B. To the extent that CONSULTANT performs "Design Professional
Services" within the meaning of Civil Code Section 2782.8, then the following Hold
Harmless provision applies in place of subsection A above:
"CONSULTANT hereby agrees to protect, defend; indemnify and hold
harmless CITY and its officers, elected or appointed officials, employees, agents and
volunteers, from and against any and all claims, damages 11osses, expenses, demands and
defense costs (including, without limitation, costs and,'fees of litigation of every nature or
liability of any kind or nature) to the extent thatthe claims against CONSULTANT arise
out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of
CONSULTANT. In no event shall the cost to defend charged to CONSULTANT exceed
CONSULTANT's proportionate percentage of fault. However, notwithstanding the
previous sentence, in the event one or more other defendants to the claims and/or litigation
is unable to pay its share of defense costs due to bankruptcy or dissolution of the business,
CONSULTANT shall meet and confer with CITY and other defendants regarding unpaid
defense costs. The duty to indemnify, including the duty and the cost to defend, is limited
as provided in California Civil Code Section 2782.8.
C. Regardless of whether subparagraph A or B applies, CITY shall be
reimbursed by CONSULTANT for all costs and attorney's fees incurred by CITY in
enforcing this obligation. This indemnity shall apply to all claims and liability regardless
of whether any insurance policies are applicable. The policy limits do not act as a
1=imitation upon the amount of indemnification to be provided by CONSULTANT.
20-8664/230396 agree/surfnet/professional svcs 50 to 100
1 05/19-204133 4 of 13
908
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9. PROFESSIONAL LIABILITY INSURANCE
CONSULTANT shall obtain and furnish to CITY a professional,Iiability
insurance policy covering the work performed by it hereunder. This policy,shall provide
coverage for CONSULTANT's professional liability in an amount not less than One
s
Million Dollars ($1,000,000.00) per occurrence and in the aggregate. The above-
mentioned insurance shall not contain a self-insured retention without the express written
s
consent of CITY; however an insurance policy "deductible" of Ten Thousand Dollars
At
($10,000.00) or less is permitted. A claims-made policy shall be acceptable if the policy
further provides that: r
A. The policy retroactive date coincides with or precedes the initiation
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of the scope of work (including subsequent policies purchased as
renewals or repla(c ments).
B. CONSULT XNT shall notify CITY of circumstances or incidents
that might give rise to future claims.
CONSULTANT will make every effort to maintain similar insurance during
the required extended pe iod of coverage following PROJECT completion. If insurance is
terminated for any/reason, CONSULTANT agrees to purchase an extended reporting
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provision of at/least two (2) years to report claims arising from work performed in
connection with this Agreement.
If CONSULTANT fails or refuses to produce or maintain the insurance
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required by this section or fails or refuses to furnish the CITY with required proof that
insurance has been procured and is in force and paid for, the CITY shall have the right, at
,•the CITY's election, to forthwith terminate this Agreement. Such termination shall not
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effect Consultant's right to be paid for its time and materials expended prior to notification
20-8664/230396 agree/surfnet/professional sves 50 to 100
05/19-204133 5 of 13
t" 909
of termination. CONSULTANT waives the right to receive compensation and agrees to
indemnify the CITY for any work performed prior to approval of insurance by the CITY.
10, CERTIFICATE OF INSURANCE
Prior to commencing performance of the work hereunder, CONSULTANT
shall furnish to CITY a certificate of insurance subject to approval of the City.-Attorney
evidencing the foregoing insurance coverage as required by this Agreement;the certificate
shall:
A. provide the name and policy number of each�carrier and policy;
B. state that the policy is currently in force;and
f
C. shall promise that such policy,shall not be suspended, voided or
canceled by either party, reduced in coverage or in limits except
after thirty (30) days' prior written notice; however, ten (10) days'
prior written notice i.the event of cancellation for nonpayment of
premium.
CONSULTANT shEill maintain the foregoing insurance coverage in force
until the work under this Agreement is fully completed and accepted by CITY.
The requirement for carrying the foregoing insurance coverage shall not
derogate from CONSULTANT's defense, hold harmless and indemnification obligations as
set forth in this A.i eement. CITY or its representative shall at all times have the right to
demand the original or a copy of the policy of insurance. CONSULTANT shall pay, in a
prompt and timely manner, the premiums on the insurance hereinabove required.
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/11. INDEPENDENT CONTRACTOR
s�
CONSULTANT is, and shall be, acting at all times in the performance of
a
//this Agreement as an independent contractor herein and not as an employee of CITY.
20-8664/230396 agree/surfnet/professional svcs 50 to 100
05/19-204133 6 of 13
910
CONSULTANT shall secure at its own cost and expense, and be responsible for any and
all payment of all taxes, social security, state disability insurance compensation,
unemployment compensation and other payroll deductions for CONSULTANT;and its
officers, agents and employees and all business licenses, if any, in connection with the
PROJECT and/or the services to be performed hereunder.
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12. TERMINATION OF AGREEMENT
All work required hereunder shall be performed rYin a good and workmanlike
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manner. CITY may terminate CONSULTANT's services,,hereunder at any time with or
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without cause, and whether or not the PROJECT is fully"complete. Any termination of this
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Agreement by CITY shall be made in writing ,notice of which shall be delivered to
CONSULTANT as provided herein. In :he event of termination, all finished and
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unfinished documents, exhibits, report, andevidence shall, at the option of CITY, become
its property and shall be promptly delivered to it by CONSULTANT.
13. ASSIGNMENT AND DELEGATION
This Agreemeq,is a personal service contract and the work hereunder shall
not be assigned, delegated/or subcontracted by CONSULTANT to any other person or
entity without the prior•4'express written consent of CITY. If an assignment, delegation or
subcontract is approved, all approved assignees, delegates and subconsultants must satisfy
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the insurance requirements as set forth in Sections 9 and 10 hereinabove.
14. ,1/ COPYRIGHTS/PATENTS
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CITY shall own all rights to any patent or copyright on any work, item or
material produced as a result of this Agreement.
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15. CITY EMPLOYEES AND OFFICIALS
CONSULTANT shall employ no CITY official nor any regular CITY
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employee in the work performed pursuant to this Agreement. No officer or employee of
CITY shall have any financial interest in this Agreement in violation of the applicable
provisions of the California Government Code.
16. NOTICES
Any notices, certificates, or other communications hereunder shall./be given
either by personal delivery to CONSULTANT's agent (as designated^Fin Section 1
hereinabove) or to CITY as the situation shall warrant, or by enclosing the same in a sealed
envelope, postage prepaid, and depositing the same in the United States Postal Service, to
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the addresses specified below. CITY and CONSULTANT may designate different
addresses to which subsequent notices, certificates or of er communications will be sent by
notifying the other party via personal delivery, a/reputable overnight carrier or U. S.
certified mail-return receipt requested:
TO CITY: A l TO CONSULTANT:
City of Huntington Beach OC/Inland Empire SBDC Network
ATTN: Travis Hopkins Attn: Mike Daniel-Regional Director
2000 Main Street 800 N. State College Blvd. SGMH 4157
Huntington Beach, CA 92648 Fullerton, CA 92831
(657) 278-5168
17. CONSE14T
When CITY's consent/approval is required under this Agreement, its
consent/approva`1 for one transaction or event shall not be deemed to be a consent/approval
/20-8664/230396
se uent occurrence of the same or an other transaction or event.
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18. MODIFICATION
No waiver or modification of any language in this Agreement shall be valid
unless in writing and duly executed by both parties.
19. SECTION HEADINGS
The titles, captions, section, paragraph and subject headings, and descriptive
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phrases at the beginning of the various sections in this Agreement are merely`descriptive
and are included solely for convenience of reference only and are not representative of
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matters included or excluded from such provisions, and do not interpret, define, limit or
describe, or construe the intent of the parties or affect the construction or interpretation of
any provision of this Agreement. , .
20. INTERPRETATION OF THIS AGREEMENT
The language of all parts of this,Agreement shall in all cases be construed
as a whole, according to its fair meaning, and not strictly for or against any of the parties.
If any provision of this Agreement/is held by an arbitrator or court of competent
jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate
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or affect the remaining covenants and provisions of this Agreement. No covenant or
provision shall be deemed dependent upon any other unless so expressly provided here.
As used in this Agreement,
grement, the masculine or neuter gender and singular or plural number
shall be deemed to include the other whenever the context so indicates or requires.
Nothing contained herein shall be construed so as to require the commission of any act
contrary to,la , and wherever there is any conflict between any provision contained herein
and any present or future statute, law, ordinance or regulation contrary to which the parties
have no right to contract, then the latter shall prevail, and the provision of this Agreement
20-8664/230396 agree/surfnet/professional svcs 50 to 100
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which is hereby affected shall be curtailed and limited only to the extent necessary to bring
it within the requirements of the law.
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21. DUPLICATE ORIGINAL
The original of this Agreement and one or more copies hereto have,,been
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prepared and signed in counterparts as duplicate originals, each of which so executed shall,
irrespective of the date of its execution and delivery, be deemed an.,riginal. Each
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duplicate original shall be deemed an original instrument as against any party who has
signed it. �
22. IMMIGRATION
CONSULTANT shall be responsible,, for full compliance with the
immigration and naturalization laws of the United°`States and shall, in particular, comply
with the provisions of the United States Code regarding employment verification.
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23. LEGAL SERVICES SUBCONTRACTING PROHIBITED
CONSULTANT and CITY agree that CITY is not liable for payment of any
subcontractor work involving legal services, and that such legal services are expressly
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outside the scope of services;,contemplated hereunder. CONSULTANT understands that
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pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive
legal counsel for CITY;a and CITY shall not be liable for payment of any legal services
expenses incurred byXCONSULTANT.
24. ATTORNEY'S FEES
+ In the event suit is brought by either party to construe, interpret and/or
enforce he terms and/or provisions of this Agreement or to secure the performance hereof,
party shall no be
each party shall bear its own attorney s fees, such that the prevailing pay a t
en`titled to recover its attorney's fees from the nonprevailing party.
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25. SURVIVAL
Terms and conditions of this Agreement, which by their sense and context
survive the expiration or termination of this Agreement, shall so survive.
26. GOVERNING LAW
This Agreement shall be governed and construed in accordance,.with the
laws of the State of California.
27. SIGNATORIES
Each undersigned represents and warrants that its signature hereinbelow has
the power, authority and right to bind their respective parties to each of the terms of this
Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the
event that such authority or power is not, in fact, held by the signatory or is withdrawn.
28. ENTIRETY 'S
The parties acknowledge i,and agree that they are entering into this
Agreement freely and voluntarily following extensive arm's length negotiation, and that
each has had the opportunity to'f consult with legal counsel prior to executing this
Agreement. The parties also e,acknowledge and agree that no representations, inducements,
promises, agreements or.twarranties, oral or otherwise, have been made by that party or
anyone acting on that`�party's behalf, which are not embodied in this Agreement, and that
that party has not'executed this Agreement in reliance on any representation, inducement,
promise, agreement, warranty, fact or circumstance not expressly set forth in this
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Agreement. This Agreement, and the attached exhibits, contain the entire agreement
between the parties respecting the subject matter of this Agreement, and supersede all prior
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understandings and agreements whether oral or in writing between the parties respecting
the subject matter hereof.
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29. EFFECTIVE DATE
This Agreement shall be effective on the date of its approval by the City
Attorney. This Agreement shall expire when terminated as provided herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by and through their authorized officers.
CONSULTANT, CITY OF HUNTINGTON BEACH,
Mike Daniel a municipal corporation of the State of
California
SBDC
By: City Manager ✓
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INITIATED AND APPROVED:
print name
ITS: (circle one)Chairman/President/Vice President
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AND Assistant City Manager
APPROVED AS TO FORM:
By. pr
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print name City Attorney
ITS: (circle one)Secretary/Chief Financial Officer/Asst.
Secretary—Treasurer ~� Date
RECEIVE AND FILE:
City Clerk
Date
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EXHIBIT "A"
A. STATEMENT OF WORK: (Narrative of work to be performed) £`
See attached exhibit A
B. CONSULTANT'S DUTIES AND RESPONSIBILITIES:
See attached exhibit A
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C. CITY'S DUTIES AND RESPONSIBILITIES:
See attached exhibit A
D. WORK PROGRAM/PROJECT SCHEDULE:
See attached exhibit A
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EXHIBIT A
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EXHIBIT A
A M E�R�S SBDC Scope of Work
City of Huntington Beach, CA
Small Business Grant Program
Scope of Work
The proposed scope of work for the City of Huntington Beach Small Business Grant.Program is
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for the SBDC to work with City staff to develop and implement a small business,grant program.
The SBDC will contract directly with the City to assist in the design of the Small Business Grant
Program and to implement the following components of
Content Development
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The SBDC will work directly with City staff to develop the content of the Small Business Grant
Program. SBDC will assist in creating eligibility criteria, required qualifications, timelines, grant
dollar amounts and program guidelines.
Marketing
Flyers-
The SBDC will create a promotional E-flyer in'both English and Vietnamese introducing the
Small Business Grant Program. The SBDCwill work with City staff to make sure the program
and eligibility requirements are capturedicorrectly.
Advertising-
The SBDC will conduct active„targeted advertising campaigns under its normal program
allowances to support the county program via paid Google, Facebook, YouTube, and Instagram
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advertisements as appropriate.
City Virtual Press Conference-
To support the City's leadership in the development of this program, the SBDC will conduct a
City Virtual Press Conference and Kick Off, formally announcing the program. The SBDC in
partnership,,with the city will invite local partners, media and constituents to attend as well as
announce the application opening date.
1
919
EXHIBIT A
AM E R I C ASS DC SBDC Scope of Work
m City of Huntington Beach, CA
Small Business Grant Program
Informational Webinars—
Targeted to potential applicants of the city's program,the SBDC will lead a series of
informational webinars to provide information on the program's eligibility; requirements,
important dates and required documentation. The SBDC will conduct'webinars, in English and
Spanish. Webinars will be recorded and sent to the city to put on the city website.
Grant Application
The SBDC will create two types of applications for business owners to complete. The SBDC
will create an online portal that will reside as a link from the City to the SBDC website.
Applicants will fill in the questions directly on the;portal or will have the ability to fill out a
paper application and drop it off at City Hall, prior to the end of the application window.
Paper Applications
Paper applications for the city's program will be available in a downloadable, fillable PDF
format. The paper application submissions will be accepted electronically via a secure SBDC
email address or in-person per the city's direction (e.g. city hall).
Online Application
The SBDC will develop and manage the online portal for application submission. The online
portal will support submission electronically in English, unless otherwise requested. The online
portal is hosted on a,;secure server whereas any application data can only be accessed with login
credentials residing with the SBDC. Any additional documentation required by business owners
can also be submitted via the online portal or via a secure, SBDC file transfer service.
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920
r EXHIBIT A
A M E R I C A�5 SBDC Scope of Work
SBDC City of Huntington Beach, CA
Small Business Grant Program
Lottery
In the event that the Small Business Grant Program will be oversubscribed,the SBDC will assist
the City in creating a lottery system. The lottery in partnership with the SBDC will be conducted
based on a randomized, computer drawing on a selected day to create further engagement, via a
live virtual event(E.g. Facebook Live). The awarded winners will be announced as appropriate
publicly and notified individually by the SBDC.
Grant Review Process `
Selected applicants that have been awarded t die lottery,,syste 1 begin the grant
review process. The SBDC will work with al dees toreomplete the _ wing items for their
grant award.
A complete application will include 1 of the OTM g documentation:
1. Complete and Signed(electronic o o>sIc signat -.
2. Tax Returns f 19—C ,11. rat 1
3. Current Busin icense
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4. Documentations . - tin ee wa ounts such as 940 and 941's
5. � �a., coon
6. fit and Loss ent 019
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7. St nt of Use MM s
8. Busin se agreeme
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10. Grant Agreeme
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A complete application that does meet the required criteria will move toward the Grant Approval
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Process. The Grant Approval process from this initial stage will move toward review by City
management,that will certify all eligibility requirements to ensure these requirements have been
met.
3
921
EXHIBIT A
A M E R I C ASS SBDC Scope of Work
SBDC SBDC
of Huntington Beach, CA
Small Business Grant Program
An incomplete application package will be referred to an SBDC Consultant for one-on-one,`'
consulting for the Consultant to assist the applicant to complete the package. The applicant will
have 14 days to send all documents to the SBDC, before their award is denied and the next
alternate is brought into the system. Should the applicant be unable to complete'ihe package or
does not meet the criteria for applying for this funding the SBDC Consultant`will assist the
applicant in finding alternative funding.
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Grant Agreement
The SBDC will work with each awardee to compl_:� -9'r
and agreement. The grant
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agreement will certify that all funds will be sp, eligible expense applicant highlighted
in the grant application. ,
Disbursements
Once the grant review has been approve the team, be sent to the City staff for
management approval = t. They C w'I r al cuments from each
awardee to the city t _ for fina , horizati _ record ke g.
Conti upport he
The SB . 'll continue t sult ain all awarded grantees and those that were denied
funding duri . = life of thei iness. a e network has more than 100 business consultants
that will work wi h'applic ne-on-one, all at no cost to the business owner. The SBDC
receives funding from e government and the state of California,to be able to deliver
services to the business o :< throughout the region.
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EXHIBIT A
A M E� R I C ASS SBDC Scope of Work
Do City of Huntington Beach, CA
Small Business Grant Program
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EXHIBIT "B" Jh e
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Payment Schedule (Hourly Payment) `l
A. Hourly Rate ,�''
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CONSULTANT'S fees for such services shall be based upon the following hourly rate and cost
schedule:
See attached exhibit B
B. Travel, Charges for time during travel are not reimbursable j£�f
C. Billing ' '
1. All billing shall be done monthly in fifteen (15) minutencrements and matched to an
appropriate breakdown of the time that was taken to perform that work and who
performed it.
2. Each month's bill should include a total to date/"That total should provide, at a glance,
the total fees and costs incurred to date for the/project.
3. A copy of memoranda, letters, reports, calculations and other documentation prepared
by CONSULTANT may be required to,be submitted to CITY to demonstrate progress
toward completion of tasks. In the event CITY rejects or has comments on any such
product, CITY shall identify specific requirements for satisfactory completion.
4. CONSULTANT shall submit to CITY an invoice for each monthly payment due.
Such invoice shall: r/
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A) Reference this Agreement;
B) Describe the services performed;
C) Show the total amount of the payment due;
D) Include a,certification by a principal member of CONSULTANT's firm that
the work has been performed in accordance with the provisions of this
Agreement; and
E) For{all payments include an estimate of the percentage of work completed.
Upon submission of any such invoice, if CITY is satisfied that CONSULTANT is
making/satisfactory progress toward completion of tasks in accordance with this
Agreement, CITY shall approve the invoice, in which event payment shall be made
within thirty (30) days of receipt of the invoice by CITY. Such approval shall not be
unreasonably withheld. If CITY does not approve an invoice, CITY shall notify
a>ONSULTANT in writing of the reasons for non-approval and the schedule of
performance set forth in Exhibit "A" may at the option of CITY be suspended until
the parties agree that past performance by CONSULTANT is in, or has been brought
into compliance, or until this Agreement has expired or is terminated as provided
herein.
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Exhibit B
924
5. Any billings for extra work or additional services authorized in advance and in writing
by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the
information required above, and in addition shall list the hours expended and hourly
rate charged for such time. Such invoices shall be approved by CITY if the/Work
performed is in accordance with the extra work or additional services requestgd',`and if
CITY is satisfied that the statement of hours worked and costs incurred
fis`'accurate.
Such approval shall not be unreasonably withheld. Any dispute betwgen the parties
concerning payment of such an invoice shall be treated as separate and'apart from the
ongoing performance of the remainder of this Agreement.
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EXHIBIT "B"
Payment Schedule (Fixed Fee Payment)
I. CONSULTANT shall be entitled to monthly progress payments toward the fixed fee set
forth herein in accordance with the following progress and payment schedules.
2. Delivery of work product: A copy of every memorandum, letter, report, calculation and
other documentation prepared by CONSULTANT shall be submitted to CITY to'demonstrate progress
toward completion of tasks, In the event CITY rejects or has comments onrany such product, CITY
shall identify specific requirements for satisfactory completion.
3. CONSULTANT shall submit to CITY an invoice for,each monthly progress payment
due. Such invoice shall:
a
A) Reference this Agreement; ,f
B) Describe the services performed;
C) Show the total amount of the payment due;
D) Include a certification by a principal member of CONSULTANT's firm that the
work has been performed in accordance with the provisions of this Agreement;
and
E) For all payments include an.�estimate of the percentage of work completed.
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Upon submission of any such invoice; if CITY is satisfied that CONSULTANT is making
satisfactory progress toward completion of tasks in accordance with this Agreement, CITY shall
approve the invoice, in which event payment shall be made within thirty (30) days of receipt of the
invoice by CITY. Such approval shall/not be unreasonably withheld. If CITY does not approve an
invoice, CITY shall notify CONSULTANT in writing of the reasons for non-approval and the schedule
of performance set forth in Exhibit !;'TA" may at the option of CITY be suspended until the parties agree
that past performance by CONSULTANT is in, or has been brought into compliance, or until this
Agreement has expired or is terminated as provided herein.
4. Any billings,for extra work or additional services authorized in advance and in writing
by CITY shall be invoiced separately to CITY. Such invoice shall contain all of the information
required above, and in addition shall list the hours expended and hourly rate charged for such time.
Such invoices shall be approved by CITY if the work performed is in accordance with the extra work or
additional services requested, and if CITY is satisfied that the statement of hours worked and costs
incurred is accurate Such approval shall not be unreasonably withheld. Any dispute between the
parties concerning payment of such an invoice shall be treated as separate and apart from the ongoing
performance of the remainder of this Agreement.
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PROFESSIONAL SERVICES CONTRACT BETWEEN
THE CITY OF HUNTINGTON BEACH AND
SMALL BUSINESS DEVELOPMENT CENTER(SBDC)
DEVELOPMENT OF A SMALL BUSINESS GRANT PROGRAM.`
A
Table of Contents
1 Scope of Services................................................................................:::..................1
2 City Staff Assistance......................................................
................
.,.;8:......................2
3 Term; Time of Performance.......................................................... ..........................2
4 Compensation..........................................................................: ..............................2
5 Extra Work....................................................................I.... .......I..........................2
6 Method of Payment...........................................................: .....................................3
7 Disposition of Plans, Estimates and Other Documents......................I......................3
8 Hold Harmless ...........................................................: .3
9 Professional Liability Insurance..............................................................................4
10 Certificate of Insurance.................................... ...................................................5
11 Independent Contractor..................................,..........................................................6
12 Termination of Agreement........................ `'..........................................................6
13 Assignment and Delegation...................... ............................................................6
14 Copyrights/Patents...................I............ .................................................................7
15 City Employees and Officials............ .........................................I.........................7
16 Notices.......... ........................I..............................
17 Consent..................................... :' .........................................................................8
18 Modification........................... .................................................................................8
19 Section Headings ............... ?:......................................................I.......I.................8
20 Interpretation of this Agreement..............................................................................8
21 Duplicate Original........... .......................................................................................9
22 Immigration................. ..........................................................................................9
23 Legal Services Subcontracting Prohibited................................................................9
24 Attorney's Fees...... ........10
25 Survival.............. .................................................................................................10
26 Governing Law K...........................................$.........................................................10
27 Signatories.......:!........................................................................................................10
28 Entirety....... r............................................................................................................10
29 Effective Date.................................................................................11
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928
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SUBRECIPIENT AGREEMENT BETWEEN THE COUNTY OF ORANGE
AND THE CITY OF HUNTINGTON BEACH FOR CORONAVIRUS RELIEF
FUNDS FOR ECONOMIC SUPPORT PROVIDED BY THE CITY
This Subrecipient Agreement (the "Agreement") is made and/entered into by and
between the County of Orange, a political subdivision of the State of California,
hereinafter referred to as "County," and the City of Huntington Beach, a municipal
corporation, hereafter referred to as "Subrecipient;" with the County and
Subrecipient referred to as "Party," or collectively as "Parties."
WHEREAS, on February 26, 2020, the County Health Officer declared a local
health emergency based on an imminent and proximate threat to public health from
the introduction of a novel coronavirus (named/"COVID-19") in Orange County (the
"COVID-19 Emergency"); and
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WHEREAS, on March 2, 2020, the Board of Supervisors adopted Resolution
No. 2020-11 ratifying the local health emergency declared by the County's Health
Officer; and
WHEREAS, on March 4, 2020 the Governor of the State of California
declared a State of Emergency to/exist in California as a result of the threat of
COVID-19; and e
WHEREAS, on March/13, 2020, the President of the United States issued a
Proclamation on Declaring/ National Emergency Concerning the COVID-19
Outbreak; and
WHEREAS, tho Coronavirus Aid, Relief, and Economic Security (CARES) Act
was passed by Congress and signed into law by the President of the United States
on March 27th, 2020; and
WHERE `S, the CARES Act established the Coronavirus Relief Fund and the
County receiv7an allocation of funds from the Coronavirus Relief Fund under
section 601( of the Social Security Act, as added by section 5001 of the CARES
Act; and
W ERAS, the CARES Act provides that payments from the Coronavirus
Relief and may only be used to cover costs that (1) are necessary expenditures
incurred due to the public health emergency with respect to the COVID-19; (2) were
not ccounted for in the budget most recently approved as of March 27, 2020 (the
Page 1 of 9
929
date of enactment of the CARES Act) for the State or local government; and (&)"were
incurred during the period that begins on March 1, 2020, and ends on December 30,
2020; and �
WHEREAS, the Department of Treasury has issued guidance/that the
County may transfer funds to a unit of government within its borders provided that
the transfer qualifies as a necessary expenditure incurred due to the public health
emergency and meets the other criteria of section 601(d) of t Social Security Act;
and
WHEREAS, the Department of Treasury has issued,guidance that eligible
expenses include costs associated with the provision of economic support in
connection with the COVID-19 public health emergency, such as expenditures
related to the provision of grants to small businesses to reimburse the costs of
business interruption caused by required closures; and
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WHEREAS, the Orange County Board Yof Supervisors has authorized the
distribution of$15 million in funds it received from the Coronavirus Relief Fund to
Orange County cities located in the Second District of the Orange County Board of
Supervisors (the "Second District") bas d on the 2010 population figures provided
by the United States Census Bureau4br the economic support of small businesses
located in Subrecipient in the Second District; and
WHEREAS, in order to provide funds for the Subrecipient to pay necessary
expenditures it has or will incur providing economic support to small businesses in
the Second District due to the COVID-19 public health emergency, the Parties have
agreed that the County shall transfer the grant amount described herein to
Subrecipient, ,
NOW, THEREFORE, the Parties mutually agree as follows:
1. TER OF AGREEMENT. The term of this Agreement begins on the
date when fully executed by the Parties, and terminates on June 30, 2021, or when
all of the Parties obligations under this Agreement are fully satisfied, whichever
occurs earlier,,
2. USE OF GRANT AMOUNT.
a, Subrecipient shall use the grant amount provided under this
Agreement to pay for Eligible Expenses that: (1) are necessary expenditures
incurred due to the public health emergency with respect to COVID-19; (2)
Page 2 of 9
930
l
were not accounted for in the budget most recently approved by Subrecipient
as of March 27, 2020; and (3) were incurred during the periodgthat begins on
March 1, 2020, and ends on December 30, 2020.
b. The term "Eligible Expenses," as used in this Agreement, shall
mean expenses incurred and paid for by Subrecipient for the provision of
economic support to Small Businesses located in the,�Second District in
connection with the COVID-19 public health emergency, including
expenditures related to the provision of grants to Small Businesses to
reimburse the costs of business interruption caused by required closures and
unemployment insurance costs related to the COVID-19 public health
emergency if such costs will not otherwise4bo reimbursed by the federal
government.
C. The term "Small Business," as used in this Agreement, shall
mean an independently owned and'operated business that is not dominant in
its field of operation, the principal office of which is located within the
jurisdictional boundaries of Sub�ecipient, the officers of which are domiciled
in Orange County, California,,/and which, together with affiliates, has 100 or
fewer employees, and average annual gross receipts of fifteen million dollars
($15,000,000) or less over the previous three years, or is a manufacturer with
100 or fewer employees.,
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d. The follong is a nonexclusive list of expenditures that shall
not constitute Eligible Expenses payable from the grant amount:
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(1) F,� Damages covered by insurance.
( ) Payroll or benefits expenses for employees whose work
duties a're not substantially dedicated to mitigating or responding to
the COVID-19 public health emergency.
(3) Expenses that have been or will be reimbursed under any
federal program, such as the reimbursement by the federal
government pursuant to the CARES Act of contributions by States to
State unemployment funds.
(4) Reimbursement to donors for donated items or services.
(6) Workforce bonuses other than hazard pay or overtime.
(6) Severance pay.
Page 3 of 9
931
(7) Legal settlements.
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e. Subrecipient must utilize the grant amount in accordance with
all Federal and State laws, including but not limited to 42 U.S.C. §,801,
subsection (d), and all applicable regulations and guidelines, including
guidance issued by the Department of Treasury regarding costs"that are
payable from Coronavirus Relief Funds, which includes but,is not limited to
Guidance for State, Territorial, Local, and Tribal Governments dated April
22, 2020 (Exhibit A) and Coronavirus Relief Fund Frequently Asked
Questions Updated as of May 4, 2020 (Exhibit B). f r
3. PAYMENT OF GRANT AMOUNT
a. The County shall pay Subrecipient'a grant amount of
$4,747,521.59 within 10 business days of the,"f'ull execution of this Agreement.
All of Subrecipient's expenditures of the grant amount must be for costs as
described in Paragraph 2 of this Agreement. The grant amount represents
the amount allocated to Subrecipient based on population pursuant to the
authority delegated by the Board of Supervisors to the County Executive
Officer on May 26, 2020.
b. It is understood that the County makes no commitment to fund
this Agreement beyond the terms set forth herein.
C. If Subrecipieri has not spent any portion of the grant amount it
has received under this Agreement to cover.Eligible Expenses by December
30, 2020, Subrecipientfshall return to the County by February 1, 2021 the
amount remaining unspent as of December 30, 2020.
4. STATUTES/AND REGULATIONS APPLICABLE TO GRANT.
Subrecipient must comply with all applicable requirements of State, Federal, and
County of Orange laws, executive orders, regulations, program and administrative
requirements, po�icies and any other requirements governing this Agreement.
Subrecipient must comply with applicable State and Federal laws and regulations
pertaining to Igbor, wages, hours, and other conditions of employment. Subrecipient
must comp l/ith new, amended, or revised laws, regulations, and/or procedures that
apply to the performance of this Agreement. These requirements include, but are not
limited to
a. Office of Management and Budget (OMB) Circulars.
Subrecipient must comply with OMB Circulars, as applicable: OMB Circular
Page 4 of 9
932
f
A-21 (Cost Principles for Educational Institutions); OMB Circular A-87 (Cost
Principles for State, Local, and Indian Tribal Governments); OMB`Circular
A-102 (Grants and Cooperative Agreements with State and Local
Governments); Common Rule, Subpart C for public agencies or".OMB Circular
A-110 (Uniform Administrative Requirements for Giants and Other
Agreements with Institutions of Higher Education, Hospitals and Other Non-
Profit Organizations); OMB Circular A-122 (Cost Principles for Non-Profit
Organizations); OMB Circular A-133 (Audits of States/, Local Governments,
and Non-Profit Organizations. /
b. Single Audit Act. Since Federal funds are used in the
performance of this Agreement, Subrecipient mn st, as applicable, adhere to
the rules and regulations of the Single Audit/Act (31 USC Sec. 7501 et seq.),
OMB Circular A-133 and any administrative regulation or field memoranda
implementing the Act.
C. - Political Activity Prohibited. None of the funds, materials,
property or services provided directly or indirectly under this Agreement may
be used for any partisan political activity, or to further the election or defeat
of any candidate for public office/Funds provided under this Agreement may
not be used for any purpose designed to support or defeat any pending
legislation or administrative regulation,
6. COMPLIANCE WITH GRANT REQUIREMENTS. To obtain the grant
funds, the Department of the Treasury required an authorized representative of the
County to agree to certain promises regarding the way the grant funds would be
spent. This certification is attached hereto as Exhibit C. By signing this certification,
the County made material/representations to the Department of Treasury in order to
receive payments from th'e Department of Treasury pursuant to section 601(b) of the
Social Security Act, as/added by section 5001 of the Coronavirus Aid, Relief, and
Economic Security Act, Pub, L. No. 116-136, div, A, Title V (Mar. 27, 2020). In
accordance with Paragraph 11, Subrecipient agrees to indemnify, defend, and hold
harmless the County of Orange for any sums the State or Federal government
contends or determines Subrecipient used in violation of the certification.
Subrecipient shall immediately return to the County any funds the County or any
responsible State or Federal agency,' including the Department of Treasury,
determines the Subrecipient has used in a manner that is inconsistent with
Paragraphf2 of this Agreement. The provisions of this paragraph shall survive
termination of this Agreement.
Page 5 of 9
933
6. REPORTS.
a. Progress Report. On October 1, 2020, Subrecipient shall provide
a report to the County that shall: (1) identify the Eligible Expenses paid from
the grant amount; (2) identify the name and location of each Small Business
receiving economic support funded by the grant amount and"the amounts
paid to each Small Business; (3) demonstrate how Subrecipient used the
grant amount consistent with the use requirements of Paragraph 2; and (4)
identify the balance of the grant amount that Subrecipient has not spent.
b. Final Report. Upon the earlier of Subrecipient's expenditure of
the balance of the grant amount or January 15,2021, Subrecipient shall
provide a report to the County that shall: (1) identify the Eligible Expenses
paid from the grant amount; (2) identify the name and location of each Small
Business receiving economic support fundedfiby the grant amount and the
amounts paid to each Small Business; (3)fdemon8trate how Subrecipient used
the grant amount consistent with the use requirements of Paragraph 2; and
(3) identify the balance of the grant amount that Subrecipient has not spent,
if any. �.
F�
C. The Subrecipient shall provide a certification signed by its-chief
executive officer with each report required under this Paragraph 6 that the
statements contained in the report are true and that the expenditures
described in the report comply with the uses permitted under Paragraph 2.
d. Subrecipient shall maintain supporting documentation for the
reports required by this Paragraph 6 consistent with the requirements of
Paragraph 7.
F
7. RECORDS)hAINTENANCE. Records, in their original form, must be
maintained in accordance with requirements prescribed by the County with respect
to all matters specified in this Agreement, Original forms are to be maintained on file
for all documents specified in this Agreement. Such records must be retained for a
period four (4) years after termination of this Agreement and after final disposition
of all pending matters. "Pending matters" include, but are not limited to, an audit,
litigation or other actions involving records.Records, in their original form pertaining
to matters covered by this Agreement, must at all times be retained within the
County of Orange unless authorization to remove them is granted in writing by the
County. '
;i
Page 6 of 9
934
8. RECORDS INSPECTION. At any time during normal business hours
and as often as either the County, Inspector General acting pursuant to the Inspector
General Act of 1978, or the Auditor General of the State of California may deem
necessary, Subrecipient must make available for examination all of its records with
respect to all matters covered by this Agreement. The County, Inspector General, and
the Auditor General of the State of California each have the authority to audit,
examine and make excerpts or transcripts from records, including all`Subrecipient's
invoices, materials, payrolls, records of personnel, conditions of"employment and
other data relating to all matters covered by this Agreement. Subrecipient agrees to
provide any reports requested by the County regarding/performance of this
Agreement. With respect to inspection of Subrecipient's records, the County may
require that Subrecipient provide supporting documentation to substantiate
Subrecipient's expenses with respect to the Subrecipient's use or expenditure of the
grant amount,
9. INDEPENDENT CONTRACTOR. Th6'Subrecipient shall be considered
an independent contractor and neither the Subrecipient, its employees, nor anyone
working under the Subrecipient shall be considered an agent or an employee of
County. Neither the Subrecipient, its employees nor anyone working under the
Subrecipient shall qualify for workers' compensation or other fringe benefits of any
kind through County.
10. PERMITS, LICENSES, APPROVALS, AND LEGAL OBLIGATIONS.
Subrecipient shall be responsible for obtaining any and all permits, licenses, and
approvals required for per£ormingL;any work under this Agreement. Subrecipient
shall be responsible for observing"and complying with any applicable Federal, State,
or local laws, or rules or regulations affecting any such work. Subrecipient shall
provide copies of permits and'approvals to the County upon request.
11.' INDEMNITY. The Subrecipient agrees to indemnify, defend with
counsel approved in writing by County, and hold County, its elected and appointed
officials, officers, employees and agents and those special districts and agencies which
Cowity's Board of Supervisors acts as the governing Board harmless from any claims,
demands or liability`of any kind or nature, including but not limited to personal injury
or property damage, arising from or related to the Subrecipienes receipt of the grant
amount under this Agreement, including any claims that the grant amount paid by
the County under this Agreement were not used consistent with the restrictions on
the use of fl'oronavirus Relief Funds (42 U.S.C. § 801) and the regulations and
guidance issued by the Department of Treasury regarding the use of such funds. The
provision'' of this paragraph shall survive the termination of this Agreement.
Page 7 of 9
f�
935
12. NOTICES, Any and all notices, requests, demands and other
communications contemplated, called for, permitted, or required to be given
hereunder shall be in writing. Any written communications shall be deemed to have
been duly given upon actual in-person delivery, if delivery is by direct hand;"or upon
delivery on the actual day of receipt or no greater than four (4) calendar'days after
being mailed by US certified or registered mail, return receipt requested, postage
prepaid, whichever occurs first. The date of mailing shall count as the first day. All
communications shall be addressed to the appropriate party at the address stated
herein or such other address as the parties hereto may designate by written notice
from time to time in the manner aforesaid. ;
J
Subrecipient: f`f
Oliver Chi, City Manager `f
City of Huntington Beach -'
2000 Main Street �<
P.O. Box 190
Huntington Beach, CA 92648
i
County:
Arie Dana, Chief of Staff
Office of Supervisor Michelle/Steel
Orange County Board of Supervisors
10 Civic Center Plaza
Santa Ana, CA 92701
13. DEFAULTS, Should either Party fail for any reason to comply with the
contractual obligations/bf this Agreement within the time specified by this
Agreement, the non-breaching Party reserves the right to terminate the Agreement,
reserving all rights under State and Federal law,
14. ATTORNEY FEES, In any action or proceeding to enforce or interpret
any provision of-this Agreement, each Party shall bear its own attorney's fees, costs,
and expenses.
15, / ENTIRE CONTRACT: This Agreement contains the entire contract
between the Parties with respect to the matters herein, and there are no restrictions,
promises, warranties or undertakings other than those set forth herein or referred to
Page 8of9
936
herein. No exceptions, alternatives, substitutes or revisions are valid or bindinWon
the parties unless authorized by the Parties in writing.
16. AMENDMENTS. No alteration or variation of the terms of this
Agreement shall be valid unless made in writing and signed by the panties; no oral
understanding or agreement not incorporated herein shall be binding..on either of the
Parties; and no exceptions, alternatives, substitutes or revisions are/valid or binding
on County unless authorized by County in writing. /
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
on the day and year dated below, j
CITY OF HUNTINGTON BEACH COUNTY OF ORANGE
A California Municipal Corporation A political subdivision of the State of
California
s - �e »�
By: �� $y;
liver Chi, ity Manager Iffichelle Steel, Cz oman
Date: , nap � Date:
ATTEST
By: . ti
Robin Stieler f
Clerk of the Board of Supervisors
County of Orange,/California
APPROVED AS T4 FORM:
{
mf
By: By;
JVI'Gdl� ,4 S"'�ng
City Attorney Deputy County Counsel
Dater Seal /J6 a Date:
Page 9 of 9
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EXHIBIT A
Coronavirus Relief Fund
Guidance for State,Territorial,Local,and Tribal Governments
April 22,2020
The purpose of this document is to provide guidance to recipients of the funding available'under section
601(a)of the Social Security Act,as added by section 5001 of the Coronavirus Aid,Relief,and Economic
Security Act("CARES Act"), The CARES Act established the Coronavirus Relief Fund(the"Fund")
and appropriated$150 billion to the Fund. Under the CARES Act,the Fund is to be used to make
payments for specified uses to States and certain local governments;the District"of Columbia and U.S.
Territories(consisting of the Commonwealth of Puerto Rico, the United States Virgin Islands,Guam,
American Samoa,and the Commonwealth of the Northern Mariana Islands); and Tribal governments.
The CARES Act provides that payments from the Fund may only be used to cover costs that—
1. are necessary expenditures incurred due to the public health emergency with respect to
the Coronavirus Disease 2019(COVID-19);
2. were not accounted for in the budget most recently approved as of March 27,2020(the
date of enactment of the CARES Act)forlhe State or government; and
3. were incurred during the period that begins on March 1,2020, and ends on December 30,
2020.'
The guidance that follows sets forth the Department of the Treasury's interpretation of these limitations
on the permissible use of Fund payments.
Necessary expenditures Incurred dire to thepublic health emergency
0
The requirement that expenditures befiiicurred"due to"the public health emergency means that
expenditures must be used for action's taken to respond to the public health emergency. These may
include expenditures incurred to allow the State,territorial, local,or Tribal government to respond
directly to the emergency, such,as by addressing medical or public health needs,as well as expenditures
incurred to respond to second;order effects of the emergency,such as by providing economic support to
those suffering froth employ'vent or business interruptions due to COViD-19-related business closures.
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Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not
otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is
not a permissible use/of Fund payments.
The statute also specifies that expenditures using Fund payments must be"necessary." The Department
of the Treasurr,understands this term broadly to mean that the expenditure is reasonably necessary for its
intended use in the reasonable judgment of the government officials responsible for spending Fund
payments.
Costs not accounted for in Ilse budget Most recently approved as of March 27,2020
1
The/CARES Act also requires that payments be used only to cover costs that were not accounted for in
the`budget most recently approved as of March 27, 2020. A cost meets this requirement if either(a)the
cost cannot lawfully be funded using a line item,allotment,or allocation within that budget or(b)the cost
See Section 601(d)of the Social Security Act,as added by section 5001 of the CARES Act.
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is for a substantially different use from any expected use of funds in such a line item,aiiotment,,,or
allocation.
The"most recently approved"budget refers to the enacted budget for the relevant fiscal perlod for the
particular government,without taking into account subsequent supplemental appropriations enacted or
other budgetary adjustments made by that government in response to the COVID-I9 public health
emergency. A cost is not considered to have been accounted for in a budget merely#because it could be
met using a budgetary stabilization fund, rainy day fund,or similar reserve account.
Costs incurred during the period that begins on March 1,2020, and ends on December 30,2020
A cost its"incurred"when the responsible unit of government has expended funds to cover the cost.
Nonexclusive examples of eligible expenditures
Eligible expenditures include,but are not limited to,payment fare:
1. Medical expenses such as:
• COVID-19-related expenses of public hospitals,clinics,and similar facilities.
• Expenses of establishing temporary public�mcdical facilities and other measures to increase
COVID-19 treatment capacity, including"related construction costs.
• Costs of providing COVID-19 testing/, including including serological testing.
• Emergency medical response expenses, including emergency medical transportation,related
to COVID-19.
• Expenses for establishing and Operating public telemedicine capabilities for COVID-19-
related treatment.
2. Public health expenses such as:
a Expenses for communi ation and enforcement by State,territorial, local,and Tribal
governments of public health orders related to COVID-19.
• Expenses for acquisition and distribution of medical and protective supplies, including
sanitizing products and personal protective equipment,for medical personnel, police officers,
social workers,/child protection services,and child welfare officers,direct service providers
for older adults and individuals with disabilities in community settings, and other public
health or safety workers in connection with the COVID-19 public health emergency.
• Expenses'for disinfection of public areas and other facilities, e.g.,nursing homes, in response
to the COVID-19 public health emergency.
Expanses for technical assistance to local authorities or other entities on mitigation of
CIAO=VID-I9-related threats to public health and safety.
/eii'i'ployces
Expenses for public safety measures undertaken In response to COVID-19.
Expenses for quarantining individuals.
roll expenses for public safety,public health,health care,human services,and similar
whose services are substantially dedicated to mitigating or responding to the COVID-
ublic health emergency.
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4. Expenses of actions to facilitate compliance with COVID-19-related public health measures, such
as:
• Expenses for food delivery to residents, including, for example,senior citizens and other
vulnerable populations,to enable compliance with COVID-19 public health precautions.
• Expenses to facilitate distance learning, including technological improvements in connection
with school closings to enable compliance with COVID-19 precautions.
• Expenses to improve telework capabilities for public employees to enable compliance with
COVID-19 public health precautions.
• Expenses of providing paid sick and paid family and medical lean_a to public employees to
enable compliance with COVID-19 public health precautions. ,
• COVID-19-related expenses of maintaining state prisons and`county jails,including as relates
to sanitation and improvement of social distancing measures,to enable compliance with
COVID-19 public health precautions.
• Expenses for care for homeless populations provided"to mitigate COVID-19 effects and
enable compliance with COVID-19 public health precautions.
i
5. Expenses associated with the provision of economic'support in connection with the COVID-19
public health emergency,such as:
• Expenditures related to the provision of gran is to small businesses to reimburse the costs of
business interruption caused by required'closures.
• Expenditures related to a State,territorial, local,or Tribal government payroll support
program.
• Unemployment insurance costs.related to the COVID-19 public health emergency if such
costs will not be reimbursed by the federal government pursuant to the CARES Act or
otherwise. f
6. Any other COVID-19-related/expenses reasonably necessary to the function of government that
satisfy the Fund's eligibility"criteria.
Nonexclusive examples of ineligible expenditures
The following is a list of examples of costs that would not be eligible expenditures of payments from the
Fund.
1. Expenses for the State share of Medicaid?
2. Damages c f e ed by insurance.
3. Payroll or 4iefits expenses for employees whose work duties are not substantially dedicated to
mitigating or responding to the COVID-19 public health emergency,
s In additionlpursuant to section 5001(b)of the CARES Act,payments from the Fund may not be expended far an
elective abortion or on research in which a human embryo is destroyed,discarded,or knowingly subjected to risk of
injury or death. The prohibition on payment for abortions does not apply to an abortion if the pregnancy is the result
of an act of rape or incest;or in the case where a woman suffers from a physical disorder,physical injury,or
physical illness,including a life-endangering physical condition caused by or arising from the pregnancy itself,that
would,as certified by a physician,place the woman in danger of death unless an abortion is performed.
Furthermore,no government which receives payments from the Fund may discriminate against a health care entity
on the basis that the entity does not provide,pay for,provide coverage of,or refer for abortions.
'See 42 C.F.R.§433.51 and 45 C.F.R.§75.306,
3
940
4. Expenses that have been or will be reimbursed under any federal program,such as the
reimbursement by the federal government pursuant to the CARES Act of contributions by States
to State unemployment funds,
5. Reimbursement to donors for donated items or services.
6. Workforce bonuses other than hazard pay or overtime.
7. Severance pay.
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S. Legal settlements.
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EXHIBIT B
Coronavirus Relief Fund
Frequently Asked Questions
Updated as of May 4,2020
r
r'
The following answers to frequently asked questions supplement Treasury's Coronavirus Relief Fund
("Fund")Guidance for State,Territorial,Local,and Tribal Governments,dated April 22,-2020,
("Guidance"),I Amounts paid from the Fund are subject to t.he.restrictions outlined in,the Guidance and
set forth in section 601(d)of the Social Security Act,as added by section 5001 of the Coronavirus Aid,
Relief,and Economic Security Act("CARES Act").
Eligible Expenditures
,r
Are governments required to submit proposed expenditures to Treasury`for approval?
No. Governments are responsible for making determinations as to what expenditures are necessary due to
the public health emergency with respect to COVID-19 and do not`need to submit any proposed
expenditures to Treasury.
The Guidance says that funding can be used to meet payroll expenses for public safety,public health,
health care, human services, and similar employees wleose services are substantially dedicated to
mitigating or responding to the COWS-19 public health emergency. How does a government
determine whether payroll expenses for a given employee satisfy the "substantially dedicated"
condition?
The Fund is designed to provide ready funding'io address unforeseen financial needs and risks created by
the COVID-19 public health emergency. For"this reason,and as a matter of administrative convenience
in light of the emergency nature of this program,a State,territorial,local,or Tribal government may
presume that payroll costs for public health and public safety employees are payments for services
substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the
chief executive(or equivalent) of the relevant government determines that specific circumstances indicate
otherwise.
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The Guidance says that a cost'was not accounted for in the most recently approved budget if the cost is
for a substantially differentluse from any expected use of funds in such a line item,allotment,or
allocation. What would qualiftl as a "substantially different use"for purposes ofthe Fund eligibility?
i
Costs incurred for a"substantially different use"include,but are not necessarily limited to,costs of
personnel and services that were budgeted for in the most recently approved budget but which,due
entirely to the CO�VID-19 public health emergency,have been diverted to substantially different
functions. Thiswould include,for example,the costs of redeploying corrections facility staff to enable
compliance with COVID-19 public health precautions through work such as enhanced sanitation or
enforcing social distancing measures;the costs of redeploying police to support management and
enforcement of stay-at-home orders;or the costs of diverting educational support staff or faculty to
develop/online learning capabilities,such as through providing information technology support that is not
part o(ithe staff or faculty's ordinary responsibilities.
Nee that a public function does not become a"substantially different use"merely because it is provided
f m a different location or through a different manner. For example,although developing online
The Guidance is available at litlpg://lfoiiie,trcastity,lov/sysleiii/tiles/136/Coronavirus-Relief-Fund-Guidance-for-
St ate-Territorial-Local-and-Tribal-Goveriitiients:oil f;
1'.
942
instruction capabilities may be a substantially different use of funds,online instruction itself is not a
substantially different use of public funds than classroom instruction. '
May a State receiving a payment transfer funds to a local government?
Yes,provided that the transfer qualities as a necessary expenditure incurred due to the public health
emergency and meets the other criteria of section 601(d)of the Social Security Act. Such funds would be
subject to recoupment by the Treasury Department if they have not been used iri a manner consistent with
section 601(d)of the Social Security Act. /
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May a unit of local government receiving a Fund payment transfer finds nds to another unit of
government? s
Yes. For example, a county may transfer funds to a city,town,orschool district within the county and a
county or city may transfer funds to its State,provided that the transfer qualifies as a necessary
expenditure incurred due to the public health emergency and meets the other criteria of section 601(d)of
the Social Security Act outlined in the Guidance. For example,a transfer from a county to a constituent
city would not be permissible if the funds were intended to be used simply to fill shortfalls in government
revenue to cover expenditures that would not otherwise7qualify as an eligible expenditure.
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Is a Fund payment recipient required to transfer funds to a smaller, constituent unit ofgovernment
within its borders? f,
No, For example,a county recipient is not required to transfer funds to smaller cities within the county's
borders. �,�'
Are recipients required to use other federal funds or seek reimbursement under other federal programs
before using Fund payments to satisfy eligible expenses?
i'
No. Recipients may use Fund payments for any expenses eligible under section 601(d)of the Social
Security Act outlined in the Guidance. Fund payments are not required to be used as the source of
funding of last resort. However,as noted below, recipients may not use payments from the Fund to cover
expenditures for which they will receive reimbursement,
Are there prohibitions on combining a transaction supported with Fund payments with other CARES
Act funding or COM l9 relief Federal funding?
f
Recipients will need/fo consider the applicable restrictions and limitations of such other sources of
funding. In addition,expenses that have been or will be reimbursed under any federal program,such as
the reimbursement by the federal government pursuant to the CARES Act of contributions by States to
State unemployment funds, are not eligible uses of Fund payments,
Are Slates p r ltted to use Fund payments to support state unemployment Insurance fiends generally?
To the extent that the costs incurred by a state unemployment insurance fund are incurred due to the
COVID`-19 public health emergency,a State may use Fund payments to make payments to its respective
state�unemployment insurance fund,separate and apart from such State's obligation to the unemployment
insurance fund as an employer. This will permit States to use Fund payments to prevent expenses related
to/the public health emergency from causing their state unemployment insurance funds to become
insolvent.
2
943
Are.recipients permitted to use Fund payments to pay for unemployment insurance costs incurred by
the recipient as an employer?
Yes,Fund payments may be used for unemployment insurance costs incurred by the recipient as an
employer(for example, as a reimbursing employer)related to the COVID-19 public health emergency if
such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.
J
The Guidance states that the Fund may support a "broad range of uses"including payroll expenses for
several classes of employees whose services are "substantially dedicated to mitigating or responding to
the COVID-19 public health emergency." What are some examples of types of covered employees?
The Guidance provides examples of broad classes of employees whose,payroll expenses would be eligible
expenses under the Fund. These classes of employees include publie'safety,public health,health care,
human services,and similar employees whose services are substantially dedicated to mitigating or
responding to the COVID-19 public health emergency. Payroll,;and benefit costs associated with public
employees who could have been furloughed or otherwise laid;aoff but who were instead repurposed to
perform previously unbudgeted functions substantially dedicated to mitigating or responding to the
COVID-19 public health emergency are also covered. Other eligible expenditures include payroll and
benefit costs of educational support staff or faculty responsible for developing online learning capabilities
necessary to continue educational instruction in response to COVID-19-related school closures. Please
see the Guidance for a discussion of what is meant.by an expense that was not accounted for in the budget
most recently approved as of March 27,2020.
In some cases,first responders and criticathealth care workers that contract COVID-19 are eligible
for workers'compensation coverage. Is.the cost of this expanded workers compensation coverage
eligible?
Increased workers compensation cost to the government due to the COVID-19 public health emergency
incurred during the period beginning March 1,2020,and ending December 30, 2020,is an eligible
expense.
If a recipient would have decommissioned equipment or not renewed a lease on particular office space
or equipment but decides to continue to use the equipment or to renew the lease lit order to respond to
the public health emergency,are the costs associated with continuing to operate the equipment or the
ongoing lease payments eligible expenses?
Yes. To the extent the expenses were previously unbudgeted and are otherwise consistent with section
601(d)of the Social Security Act outlined in the Guidance,such expenses would be eligible.
May recipients provide stipends to employees for eligible expenses(for example, a stipend to employees
to Improve,lelework capabilities) rattier than require employees to incur the eligible cost and submit for
relmbursement?
Expenditures paid for with payments from the Fund must be limited to those that are necessary due to the
public health emergency. As such,unless the government were to determine that providing assistance in
the form of a stipend is an administrative necessity, the govermment should provide such assistance on a
reimbursement basis to ensure as much as possible that funds are used to cover only eligible expenses.
,o
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May Fiend payments be used for COVID-19 public health emergency recovery planning?
Yes. Expenses associated with conducting a recovery planning project or operating a recovery
coordination office would be eligible, if the expenses otherwise meet the criteria set forth in section
601(d)of the Social Security Act outlined in the Guidance.
Are expenses associated with contact tracing eligible?
Yes,expenses associated with contract tracing are eligible.
To what extent may a government use Fund payments to support the operations of private hospitals?
Governments may use Fund payments to support public or private hospitals to the extent that the costs are
necessary expenditures incurred due to the COVID-19 public health emergency but the form such
assistance would take may differ. In particular,financial assistance to private hospitals could take the
form of a grant or a short-term loan.
May payments from the Fund be used to assist individuals with enrolling in a government benefit
program for those who have been laid off due to COVID-19 and thereby lost health insurance?
r
Yes. To the extent that the relevant government official deterrriines that these expenses are necessary and
they meet the other requirements set forth in section 601(d),of the Social Security Act outlined in the
Guidance,these expenses are eligible. err
f
May recipients use Fund payments to facilitate liveslbck depopulation incurred by producers due to
supply chain disruptions?
Yes,to the extent these efforts are deemed necessary for public health reasons or as a form of economic
support as a result of the COVID-19 health emergency.
r'
Would providing a consumer grant program to prevent eviction and assist in preventing homelessness
be considered an eligible expense? J/
,t
Yes,assuming that the recipient considers the grants to be a necessary expense incurred due to the
COVID-19 public health emergency and the grants meet the other requirements for the use of Fund
payments under section 601(d)of the Social Security Act outlined in the Guidance. As a general matter,
providing assistance to recipients to enable them to meet property tax requirements would not be an
eligible use of funds, but exceptions may be made in the case of assistance designed to prevent
foreclosures.
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May recipients create a `payroll support program"for public employees?
Use of payments/from the Fund to cover payroll or benefits expenses of public employees are limited to
those employees whose work duties are substantially dedicated to mitigating or responding to the
COVID-l!/&blic health emergency.
May recipients rise Fund payments to cover employment and training programs for employees that
have een frtrloughed dae to the public health etnergengv?
Yes,this would be an eligible expense if the government determined that the costs of such employment
and training programs would be necessary due to the public health emergency.
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May recipients use Fund payments to provide emergency financial assistance to individuals and
families directly impacted by a loss of income due to the COM-l9 public health emergency?
Yes, if a government determines such assistance to be a necessary expenditure. Such assistance"could
include,for example, a program to assist individuals with payment of overdue rent or mortgage payments
to avoid eviction or foreclosure or unforeseen financial costs for funerals and other emergency individual
needs. Such assistance should be structured in a manner to ensure as much as possible,within the realm
of what is administratively feasible,that such assistance is necessary.
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The Guidance provides that eligible expenditures may include expenditures related to the provision of
grants to small businesses to reimburse the costs of business interruption caused by required closures.
What is meant by a "small business,"and is the Guidance intended to refer only to expenditures to
cover administrative expenses of sttch a grant program?
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Governments have discretion to determine what payments are necessary. A program that is aimed at
assisting small businesses with the costs of business interruption caused by required closures should be
tailored to assist those businesses in need of such assistance. The,�iimount of a grant to a small business to
reimburse the costs of business interruption caused by required,closures would also be an eligible
expenditure under section 601(d)of the Social Security Act,a'`s outlined in the Guidance.
The Guidance provides that expenses associated with the provision of economic support in connection
with the public health emergency,such as expenditures related to the provision ofgrants to small
businesses to reimburse the costs of business interruption caused by required closures, would
constitute eligible expenditures of Fund paymenls� Would such expenditures be eligible in the absencb
of a stay-at-home order?
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Fund payments may be used for economic support in the absence of a stay-at-home order if such
expenditures are determined by the government to be necessary. This may include,for example,a grant
program to benefit small businesses that,close voluntarily to promote social distancing measures or that
are affected by decreased customer demand as a result of the COVID-19 public health emergency.
May Fund payments be used to assist impacted properly owners with the payment of their property
taxes?
Fund payments may not be used for government revenue replacement, including the provision of
assistance to meet tax obligations.
May Fund payments be used to replace foregone utility fees? If not,can Fund payments be used as a
direct subsidy payment to all utility account holders?
Fund payments may not be used for government revenue replacement, including the replacement of
unpaid utility fees. Fund payments may be used for subsidy payments to electricity account holders to the
extent that the'/subsidy payments are deemed by the recipient to be necessary expenditures incurred due to
the COVID-19 public health emergency and meet the other criteria of section 601(d)of the Social
Security�A-ct outlined in the Guidance. For example, if determined to be a necessary expenditure,a
government could provide grants to individuals facing economic hardship to allow them to pay their
utility,fees and thereby continue to receive essential services.
Could Fund payments be used for capital improvement projects that broadly provide potential
economic development in a community?
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In general,no, If capital improvement projects are not necessary expenditures incurred due to the
COVID-19 public health emergency,then Fund payments may not be used for such projects:'
However,Fund payments may be used for the expenses of, for example,establishing temporary public
medical facilities and other measures to increase COVID-19 treatment capacity or improve mitigation
-measures, including related construction costs.
The Guidance includes workforce bonuses as an example of ineligible expenses but provides that
hazard pay would be eligible if otherwise determined to be a necessary gpense. Is there a spec fe
definition of"hazard pay"?
Hazard pay means additional pay for performing hazardous duty or.,wark involving physical hardship,in
each case that is related to COVID-19.
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The Guidance provides that ineligible expenditures include,,ffijayrall or benefits expenses for
employees whose work duties are not substantially dedicated to mitigating or responding to the
COVID-19 public health emergency." Is this Intended to relate only to public employees?
Yes. This particular nonexclusive example of an ineligible expenditure relates to public employees. A
recipient would not be permitted to pay for payroll or benefit expenses of private employees and any
financial assistance(such as grants or short-term loans)to private employers are not subject to the
restriction that the private employers' employees must be substantially dedicated to mitigating or
responding to the COVID-19 public health emergency,
May counties pre dray with CARES Act funds for expenses such as a one or two year facility lease,
such as to house staff hired in response'to COVID-19?
A government should not make prepayments on contracts using payments from the Fund to the extent that
doing so would not be consistent with its ordinary course policies and procedures.
Questions Related to Administration of Fund Payments
Do governments have to return unspent funds to neashtry?
Yes. Section 60l(f)(2)of°the Social Security Act,as added by section 5001(a)of the CARES Act,
provides for recouprnent by the Department of the Treasury of amounts received from the Fund that have
not been used in a mariner consistent with section 601(d)of the Social Security Act. If a government has
not used funds it has'received to cover costs that were incurred by December 30,2020,as required by the
statute,those funds must be returned to the Department of the Treasury.
What records must be kept by governments receiving payment?
A governmentfshould keep records sufficient to demonstrate that the amount of Fund payments to the
governmeni,,has been used in accordance with section 601(d)of the Social Security Act
May recipients deposit Fund payments into Interest bearing accounts?
Yes, provided that if recipients separately invest amounts received from the Fund,they must use the
interest earned or other proceeds of these investments only to cover expenditures incurred in accordance
with section 601(d)of the Social Security Act and the Guidance on eligible expenses. If a government
deposits Fund payments in a government's general account,it may use those funds to mneet immediate
cash management needs provided that the full amount of the payment is used to cover necessary
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expenditures. Fund payments are not subject to the Cash Management Improvement Act of,I'990,as
amended.
May governments retain assets purchased with payments from the Fitnd? `
Yes,if the purchase of the asset was consistent with the limitations on the eligible`use of funds provided
by section 601(d)of the Social Security Act.
Wit at rttles apply to the proceeds of disposition or sale of assets acquiredusing payments from the
Fund? f
If such assets are disposed of prior to December 30,2020, the proceeds would be subject to the
restrictions on the eligible use of payments from the Fund provided by section 601(d)of the Social
Security Act.
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EXHIBIT C
:,. oun ty of Orange
County Executive Office
April 13,2020
1, Frank Kim,am the chief executive of the County of Orange,and 1 certify that:
1. 1 have the authority on behalf of the County of Orange to request direct payment from the
Department of the Treasury ('Treasury') pursuant to section 601(b) of the Social Security Act, as-
added by section 5001 of the Coronavirus Aid,Relief,.and Economic Security Act,Pub.L.No. 116-
136,div. A,Title V(Mar.27,2020).
2, I understand that Treasury will rely on this certification as a material representation in making a
direct payment to the County of Orange.
3. The County of Orange's proposed uses of the funds provided as direct payment under section
601(b)of the Social Security Act will be used only to cover those costs that-
a. are necessary expenditures incurred due to the public health emergency with
respect to the Coronavirus Disease 2019(COVID-19);
b, were not accounted for in the budget most recently approved as of March 27,2020,
for(insert name oflocal government entity];and
c. were incurred during the period that begins on March 1, 2020, and ends on
December 30,2020.
By; Frank Kim
Signature:
Title; County Executive Officer
Date:_ 4113120
PAPERWORK REDUCTION ACT NOTICE
The information collected will be used for the U.S. Government to process requests for support. The
estimated-burden associated with this collection of information is two hour per response. Comments
concerning the accuracy of this burden estimate and suggestions for reducing this burden should be
directed to the Office of Privacy, Transparency and Records, Department of the Treasury, 1500
Pennsylvania Ave,,N.W.,Washington,D,C,20220.DO NOT send the form to this address.An agency may
not'conduct or sponsor, and a person is not required to respond to, a collection of information unless it
displays a valid control number assigned by OMB.
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333 W.Santa Ana Blvd.,3^Floor,Santa Ana,CA 9270 1-4 062 Phone(714)834.6201 fax(714)834 3018 SY�S.LLs1tgW,sc1J11
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