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HomeMy WebLinkAbout14663RESOLUTION NO. 14663 A RESOLUTION GRANTING LOCAL BUSINESSES A DEFERMENT UNTIL MAY 1, 2022 TO MAKE THEIR FIRST MONTHLY PAYMENTS ON LOANS FROM THE COVID- 19 EMERGENCY PROJECT AND WAIVING INTEREST ON SAID LOANS DURING THE DEFERMENT PERIOD BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The thirty-four (34) local businesses listed on the attached Exhibit A, which received loans from the COVID-19 Emergency Project shall be and hereby are granted a deferment until May 1, 2022 to make their first monthly payments on said loans. Said loans shall not accrue interest during this deferment period. On May 1, 2022, the thirty- four (34) local businesses shall owe the City the principal amount of the loans plus one year’s interest at one percent (1%). SECTION 2. The officers and staff of the City are authorized to perform any and all acts consistent with this Resolution to implement the policies and procedures described herein. SECTION 3. This Resolution shall become effective immediately upon final passage. INTRODUCED July 12, 2021 BY: Ed Brown MEMBER OF CITY COUNCIL APPROVED: PRESIDENT OF CITY COUNCIL ATTESTED BY: CITY CLERK City Clerk’s Office Item # Q-2 Background Paper for Proposed Resolution COUNCIL MEETING DATE: July 12, 2021 TO: President Lawrence W. Atencio and Members of City Council CC: Mayor Nicholas A. Gradisar VIA: Marisa Stoller, City Clerk FROM: Daniel C. Kogovsek, City Attorney SUBJECT: A RESOLUTION GRANTING LOCAL BUSINESSES A DEFERMENT UNTIL MAY 1, 2022 TO MAKE THEIR FIRST MONTHLY PAYMENTS ON LOANS FROM THE COVID- 19 EMERGENCY PROJECT AND WAIVING INTEREST ON SAID LOANS DURING THE DEFERMENT PERIOD SUMMARY: Attached is a proposed Resolution granting local businesses which received loans in 2020 from the COVID-19 Emergency Project a deferment until May 1, 2022 to make their first payments on said loans. The Resolution also waives interest on said loans during the deferment interval. PREVIOUS COUNCIL ACTION: On April 13, 2020, by Ord. No. 9698, the City Council established the COVID-19 Emergency Project within the Sales and Use Tax Capital Improvement Project Fund, commonly referred to as the “half-cent sales tax fund.” On April 13, 2020, by Resolution No.14394, City Council also transferred $5,000,000 from the 1992-2021 Sales and Use Tax Capital Improvement Projects Fund to the COVID-19 Emergency Project. BACKGROUND: In 2020, thirty-four (34) local businesses received loans from the COVID-19 Emergency Project totaling $1,242,500. The COVID-19 pandemic and the State of Colorado’s subsequent public health orders have been catastrophic for many of the City’s local businesses. The potential failure of these at-risk local businesses (and the resulting loss of jobs) would cause economic harm to the City and its residents. Nearly a year and a half after the public health crisis began, many of the businesses which received loans, have not recovered from the pandemic and are not in a financial position to repay the loans. City Council has directed that local businesses should be given another year to financially recover from the pandemic before being required to make their first monthly payments on the loans. FINANCIAL IMPLICATIONS: Waiving interest on the loans during the deferment interval would result in the COVID-19 Emergency Project suffering a loss of approximately $12,425.00 of interest income, but the half- cent sales tax fund currently contains sufficient unobligated monies to absorb this loss. BOARD/COMMISSION RECOMMENDATION: Not applicable to this Resolution. STAKEHOLDER PROCESS: Not applicable to this Resolution. ALTERNATIVES: City Council has the option of not giving local businesses a deferment in making their first loan payments. RECOMMENDATION: The Mayor and City staff support the adoption of the proposed Resolution. Attachments: Proposed Resolution Exhibit A 0 r• x No N- w 0 Ln r c Nu m o C C o 0 C 0 O `^ n `^ n wn n ^ , `n n ^ `n n ^ n `^ nOOOOOOOw w w w w w w w w w w w w w w w w I I I I I I I Y >- >- >- Y > Y >- Y > T >- >- T > >- T ? O O O O O O O O O O O O O O O O O O 00000000 O O O O O O O LnLn O O rnLn .n1 V1 in al m inO O rito .nLn ✓1 Ln O O O O Ln Ln O O O Ln V1 O Ln O O N N 9 In N 1 r N rl M N In Ln 1 O 1 .-1 N N O Ln .-I N N N N Ln V N . r1 N Ln in Ol NO O C in V1 in in in in Ln Ln O O 01 in ti In in Ill O O O in In O O O in n O in O O N� .1,- .... 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