Legislative Matter

Miami-Dade Legislative Item
File Number: 200989

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Clerk's Official Copy

File Number: 200989

File Type: Resolution

Status: Adopted

Version: 0

Reference: R-557-20

Control: County Commission

File Name: CORONAVIRUS CREATE LOAN FUND FOR SMALL BUSINESS CDFIS

Introduced: 5/20/2020

Requester: NONE

Cost:

Final Action: 6/2/2020

Agenda Date: 6/2/2020

Agenda Item Number: 11A2

Notes:

Title:

RESOLUTION APPROVING TERM SHEET FOR A GRANT AGREEMENT WITH THE DADE COUNTY FEDERAL CREDIT UNION (“DCFCU”) TO PROVIDE AN AMOUNT NOT TO EXCEED $25,000,000.00 IN FUNDS FROM THE 2020 CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (“CARES ACT”) TO DEVELOP AND IMPLEMENT, IN COLLABORATION WITH LOCAL COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS, A REVOLVING LOAN PROGRAM TO ASSIST LOCAL MICRO-BUSINESSES AFFECTED BY THE CORONAVIRUS DISEASE 2019 (COVID-19) PANDEMIC; AND DIRECTING COUNTY MAYOR OR COUNTY MAYOR’S DESIGNEE TO NEGOTIATE AND EXECUTE THE GRANT AGREEMENT AND TO PROVIDE REPORTS

Indexes:	LOAN
	SMALL BUSINESS
	CORONAVIRUS

Sponsors:	Eileen Higgins, Prime Sponsor
	Daniella Levine Cava, Co-Sponsor
	Jose "Pepe" Diaz, Co-Sponsor
	Barbara J. Jordan, Co-Sponsor
	Jean Monestime, Co-Sponsor
	Dennis C. Moss, Co-Sponsor
	Rebeca Sosa, Co-Sponsor

Sunset Provision: No

Effective Date:

Expiration Date:

Registered Lobbyist:

None Listed

Legislative History
Acting Body	Date	Agenda Item	Action	Sent To	Due Date	Returned	Pass/Fail

Board of County Commissioners	6/2/2020	11A2	Adopted				P
REPORT:	First Assistant County Attorney Geri Bonzon-Keenan read the title of the foregoing proposed resolution into the record. Commissioner Higgins provided an overview of the forgivable loans agreement with the Dade County Federal Credit Union loan program, for those small businesses impacted as a result of the coronavirus disease 2019 (COVID-19/COVID) pandemic. Commissioner Higgins indicated she partnered with Michael Finney, President and Chief Executive Officer (CEO) of Miami-Dade Beacon Council, and the administration, to launch a revolving loan program funded by the Coronavirus Aid, Relief, and Economic Security Act (CARES ACT). She indicated several small businesses and micro enterprises, with 10 employees or less, did not qualify for the Paycheck Protection Program (PPP) loans. Commissioner Higgins noted the collaboration with the grantee, Dade County Federal Credit Union, would provide oversight for the funds distributed to small businesses in Miami-Dade County. She stated the loan process eligibility would be one application for all of Dade County jurisdiction. Commissioner Higgins advised that Community Development Financial Institution (CDFI) worked with small businesses to access capital and interface with organizations to build businesses. Commissioner Jordan asked to be listed as co-sponsor on the foregoing proposed resolution. In response to Commissioner Jordan’s question about how was the collaboration with the CDFI established; Commissioner Higgins indicated a criteria was developed to select a minimum of five CDFI by a Policy Committee. Deputy Mayor Edward Marquez indicated that the Credit Union was qualified to undertake the high volume of loan applications. He stated the maximum loan amount was $30,000.00 at an interest rate of 3.5%. Deputy Mayor Marquez provided an overview of the criteria required to qualify for the loan. He advised there would be loan defaults, but in comparison to other loan programs the defaults would be minor. Responding to Commissioner Jordan’s question as to whether the partnership with the CDFI’s and management was for oversight and distribution provided by the Credit Union; Deputy Mayor Marquez indicated there was Memorandum of Agreement established with the CDFI and Credit Union. In connection to Vice-Chairwoman Sosa’s question about the Credit Union involvement with the PPP loans; George Joseph, President CEO, and Director of Dade County Federal Credit Union, confirmed that the Credit Union was involved in the PPP loans. Vice-Chairwoman Sosa questioned whether all 13 commission districts could participate in the loan program; Commissioner Higgins confirmed all 13 commission districts could partake in the loan program, since all businesses in Miami-Dade County was economically impacted. Vice-Chairwoman Sosa asked to be listed as co-sponsor on this foregoing proposed resolution. Commissioner Martinez referenced a list of partners affiliated with the Credit Union, such as Hialeah and West Kendall Business Association, and asked what outreach was being facilitated to those associations. Mr. Joseph indicated all CDFI’s would post the loan program information on their website. He noted extensive advertisement would be conducted, with Miami Herald serving as a source of advertisement. Mr. Joseph noted a marketing team would be sent out to every CDFI to assist in promoting the loan program, and welcomed recommendations from the Commission. Discussion ensued amongst Commissioner Martinez, Mr. Joseph, and Deputy Mayor Marquez about providing the loan program information to the outer-parts of Miami Dade County community. Deputy Mayor Marquez provided a list of recommendations, on how to get the word out into the community with advertisement. With regards to Commissioner Martinez inquiry regarding businesses defaulting on the loan(s); Deputy Mayor Marquez indicated the Credit Union had the ability to pursue those businesses that defaulted on the loan. He noted the same requirements applied when a loan defaulted to seek payment from the applicant. In response to Commissioner Martinez’s requested that the Credit Union provide a report of the number of loan(s) received, Commissioner Higgins indicated that a quarterly report would be provided of the number of loans received by zip codes. She noted advertising, marketing and the first loan applicant(s) was anticipated by the end of June. Commissioner Higgins responded to Commissioner Monestime inquiry and confirmed the maximum loan request was $30,000.00 and noted the private sector would contribute to the loan program to expand the funding amount, and that the Policy Committee may decide to change the criteria to an increased amount. Commissioner Monestime wanted assurance that the $30,000.00 loan repayment did not become a burden to businesses and suggested propagating payments to eight years, with $300.00 to $400.00 dollar monthly payments, along with credit score leniency. Commissioner Monestime also recommended that the Policy Committee extended the loan term for those businesses displaying the on-time monthly payment for six months. Commissioner Higgins indicated some of the businesses will need those forgivable loans for business that would be up and running; the Policy Committee could change the loan time period, if they deem it necessary; she thanked Mayor Gimenez for allowing the creation of this program and thanked the Commission for their support and recommendations. There being no further comments or questions, the Board proceeded to vote on the foregoing proposed resolution as presented.

County Attorney	5/20/2020		Assigned	Michael J. Mastrucci		5/26/2020

Legislative Text

TITLE
RESOLUTION APPROVING TERM SHEET FOR A GRANT AGREEMENT WITH THE DADE COUNTY FEDERAL CREDIT UNION (�DCFCU�) TO PROVIDE AN AMOUNT NOT TO EXCEED $25,000,000.00 IN FUNDS FROM THE 2020 CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (�CARES ACT�) TO DEVELOP AND IMPLEMENT, IN COLLABORATION WITH LOCAL COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS, A REVOLVING LOAN PROGRAM TO ASSIST LOCAL MICRO-BUSINESSES AFFECTED BY THE CORONAVIRUS DISEASE 2019 (COVID-19) PANDEMIC; AND DIRECTING COUNTY MAYOR OR COUNTY MAYOR�S DESIGNEE TO NEGOTIATE AND EXECUTE THE GRANT AGREEMENT AND TO PROVIDE REPORTS

BODY
WHEREAS, coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), a novel coronavirus that was first identified in December 2019; and
WHEREAS, as of May 26, 2020, the total number of confirmed cases of COVID-19 worldwide is over 5.5 million, with more than 1.7 million of those in the United States; and
WHEREAS, on March 9, 2020, Governor Ron DeSantis issued Executive Order No. 20-52 declaring a state of emergency for the entire State of Florida as a result of COVID-19; and
WHEREAS, on March 11, 2020, Mayor Carlos A. Gimenez declared a state of emergency for Miami-Dade County as a result of COVID-19; and
WHEREAS, the disease has since spread globally, and on March 11, 2020, the World Health Organization officially declared COVID-19 a pandemic; and
WHEREAS, to help curb the spread of COVID-19, many state and local governments throughout the country ordered non-essential businesses to close and strongly urged residents to be safer at home; and
WHEREAS, consequently, many small businesses, and in particular micro-businesses, are now facing a dire threat to their survival, and an increasingly large number of employees have been laid off or furloughed; and
WHEREAS, indeed, more than 36 million Americans have filed for unemployment since March, 2020; and
WHEREAS, to help blunt the impact of the economic downturn set in motion by the COVID-19 pandemic, the United States Congress passed, and on March 27, 2020 President Donald Trump signed into law, H.R. 748, the �Coronavirus Aid, Relief, and Economic Security Act� (the �CARES Act�); and
WHEREAS, the CARES Act is a $2 trillion stimulus package which provided, among other things:
* one-time checks of $1,200 to Americans earning a certain income;
* $349 billion in loans to small businesses (the �Paycheck Protection Program� or �PPP�);
* $17 billion of assistance to companies deemed crucial to national security;
* grants of $25 billion for passenger air carriers, $4 billion for air-cargo carriers, and $3 billion for certain contractors; and
* a $150 billion Coronavirus Relief Fund for local governments; and
WHEREAS, the CARES Act requires that the payments to local governments from the Coronavirus Relief Fund only be used to cover expenses that:
* are necessary expenditures incurred due to the public health emergency with respect to COVID�19;
* were not included in the budget most recently approved as of March 27, 2020 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, on April 16, 2020, the Small Business Administration (SBA) reported that it had exhausted all funding provided by the CARES Act for the PPP; and
WHEREAS, accordingly, the United States Congress passed, and on April 24, 2020 President Donald Trump signed into law, H.R. 266, the �Paycheck Protection Program and Health Care Enhancement Act of 2020� which authorized an additional $310 billion in funds for the PPP; and
WHEREAS, community development financial institutions (CDFIs) are specialized financial institutions that work in market niches that are often underserved by traditional financial institutions, typically very small, low income, minority-owned micro-businesses; and
WHEREAS, CDFIs supply tools needed by underserved communities to become self-sufficient through access to credit, capital, training, and technical assistance, and provide commercial loans and investments to small businesses in economically distressed markets; and
WHEREAS, these services, coupled with more flexible lending guidelines, can often make the difference between success and failure for many micro-businesses; and
WHEREAS, the public health emergency caused by COVID-19 has had an immediate and serious economic impact in Miami-Dade County, particularly on the many very small, low-income, minority-owned micro-businesses that did not receive assistance from the PPP or similar federal and state programs; and
WHEREAS, according to a 2018 report from Florida International University�s Metropolitan Center, there are over 66,000 micro-businesses in Miami-Dade County, defined as those with less than 10 employees, or about 81 percent of all private establishments; and
WHEREAS, micro-businesses are a significant driving force of the local economy in Miami-Dade County; and
WHEREAS, this Board is concerned about the short-term and long-term economic impacts of the COVID-19 pandemic to these micro-businesses in Miami-Dade County; and
WHEREAS, access to capital is a persistent challenge for micro-businesses in Miami-Dade County; and
WHEREAS, the Dade County Federal Credit Union (�DCFCU�) is a Florida not-for-profit financial institution based in Miami-Dade County that provides a wide array of banking services with a community focused approach; and
WHEREAS, to assist in the economic recovery of micro-businesses, this Board desires the County Mayor or County Mayor�s designee to negotiate and execute a grant agreement with DCFCU to provide $25 million in CARES Act funds to develop and implement, in collaboration with local CDFIs, a revolving loan program to assist local micro-businesses impacted by the COVID-19 pandemic,
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that:
Section 1. The foregoing recitals are adopted as if fully set forth herein.
Section 2. This Board approves the term sheet attached hereto as Exhibit 1 (�Term Sheet�), for a grant agreement (�Agreement�) with the Dade County Federal Credit Union (�DCFCU�) in an amount not to exceed $25,000,000.00 in CARES Act funds for DCFCU to develop and implement, in collaboration with local CDFIs, a revolving loan program to assist local micro-businesses impacted by the COVID-19 pandemic.
Section 3. This Board directs the County Mayor or County Mayor�s Designee to negotiate and execute the Agreement with DCFCU. The Agreement shall include terms that are consistent with those set forth in the Term Sheet and such other customary grant provisions in County grant agreements, including, but not limited to, provisions related to the Florida Public Records Act and the County�s right to audit, review and monitor the expenditure of the grant funds.
Section 4. This Board directs the County Mayor or County Mayor�s Designee to provide a written report within 30 days, and every 30 days thereafter, detailing the status of the negotiations of the Agreement with DCFCU until an Agreement is executed. If an Agreement cannot be negotiated and executed with DCFCU, then the report shall explain the reasons for such. The completed report(s) shall be placed on an agenda of the Board pursuant to Ordinance No. 14-65.