VALLÉJO – The Vallejo City Council scrapped a spending proposal that was part of its recently adopted strategic economic plan and voted unanimously Monday to use the funds for a low-interest loan program for Vallejo businesses .
The council reluctantly adopted the economic strategic plan on Dec. 17 after council members and residents criticized it as inadequate and lacking specific concrete steps the city had not yet tried.
The economic plan was created by the consulting group Forensics and economic analyzes led by Robert Eyler, professor of economics at Sonoma State University. After nearly three years of developing the plan at a cost of $245,000 to the city, council members were unwilling to approve an additional $355,000 in funding under the American Rescue Plan Act to extend the contract with Eyler’s group to implement the recommendations of their plan.
“I was very disappointed with the presentation made by municipal staff as well as the contractor,” said Councilor Peter Bregenzer, referring to the December 17 presentation of the economic plan. “I thought it was a very simple report that he could have given to any number of cities in California.
The proposed contract extension with Eyler would have allowed his company to administer $355,000 in ARPA funding to develop a citywide capital facilities master plan, develop a marketing plan, coordinate and organize at least three pop-up events, implement a local store. campaign and provide semi-annual reports to council.
City staff had organized the Dec. 30 council meeting to meet the year-end deadline for allocating ARPA funds.
“I just think it’s absurd that we would even consider giving another penny to his organization,” Bregenzer said. “And if the city came at the very last second like that to tie our hands and make sure that this was a gift to him for something that he doesn’t deserve, then I think that’s a shame for the entire city. I would rather that money go to the federal (government) than give Dr. Eyler another penny.
City Councilwoman Mina Loera-Diaz also strongly expressed her lack of trust in Eyler. “I am not in favor of extending Mr. Eyler’s contract, I am very disappointed with the plan that has been presented to us,” she said. “It didn’t give any new ideas. What was presented was material that everyone in town can say we need.
Loera-Diaz said the chamber of commerce had already implemented a local commerce campaign that the city could have supported if it hadn’t waited for the economic development plan.
“I can give you 20 free pop-ups this year,” she said. “People are dying to create pop-ups. Give them property in town and you’ll be full of transient people eager to sell their stuff. She added that she would like to see the marketing plan done in-house or under contract with another consultant and, perhaps, incorporating input from Vallejo youth.
Loera-Diaz proposed an alternative plan to use the funds to create a small business revolving loan program, improve facades in the city’s downtown and commercial corridors, and finance the purchase of software to help businesses find suitable locations with appropriate zoning. .
Loera-Diaz’s proposal raised concerns about a potential violation of the Brown Act, California’s open meetings law, because new proposals require a two-step process and agenda items must be noted before any public meeting.
City Attorney Veronica Nebb said if the council were to reject Eyler’s contract extension, it would benefit from a Brown Act exception, which allows a new item to be added to the council’s agenda. meeting if an immediate need arises after publication of the agenda. But Nebb said a new contract should be agreed by the end of the year.
Loera-Diaz said Solano County Economic Development Corporation President Chris Rico already runs a similar program for the county that offers revolving loans with 6 percent interest and he said he would be willing to create a program tailored to the needs of the city using the county program as a model.
Mayor Robert McConnell said he would like to exclude nonprofits and individual businesses because the goal of the program is to stimulate economic activity by supporting businesses that can provide employment opportunities. He added that businesses should have had a business license in Vallejo during the pandemic to meet the economic recovery requirements of ARPA funding and that businesses should be able to demonstrate their ability to repay the loan beyond ‘a simple check of a credit score of 630.
The council unanimously approved allocating the entire amount of $355,000 to the loan program.
According to Rico, the Solano Economic Development Corporation agreed to enter into a contract with Vallejo by disbursing the funds to the existing county program which he said a number of Vallejo businesses have already taken advantage of.
Because of the last-minute contract request, Rico said the economic development corporation was only able to put together the program that fit the requirements of the existing county program. The funds will all be dedicated to Vallejo operations with a 10% administration fee.
The existing program requires a credit score of 630 and businesses can receive a refund of the program’s $250 application fee if they work with the Small Business Development Center for a 60-day period to receive financial advice and guidance. information on marketing strategy.
Rico said working with the Small Business Development Center provides tools and expertise that help business owners successfully repay their loans.
“If you have a credit score of 630, you’re looking at a standard 18% loan, so it’s not surprising that businesses are having trouble paying back because that money is expensive,” Rico said. “We are giving people with a 630 credit score loans at 6%, which is unheard of.”
Since the funds will be rolled into the existing program, Rico hopes the additional funding could be available to Vallejo businesses by the end of January. A flyer for the existing program is available here.
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