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Friday, April 17, 2020
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9:00 AM - Emergency Joint Meeting of the Waxahachie City Council and the Economic Development Commission
Teleconference
Agenda Packet: https://commondatastorage.googleapis.com/document-uploads-001/uploads/video/agenda_file/51910/4-17-20_CC_and_Economic_Development_Emergency_Meeting_Agenda_Packet.pdf
The purpose of this meeting is to consider a resolution to adopt Chapter 380 COVID-19 Emergency Loan for Small Businesses Program.
I would love for this program to roll out and help our local small businesses which have been adversely affected by the COVID-19 crisis, but I do have some reservations.
All of the information regarding the loan is in the agenda packet link above, but some highlights are:
- 0% interest loan for 30 months, with the first payment being deferred for 6 months
- Up to $50,000 per qualified applicant.
The resolution up for consideration creates the Loan Review Committee, which will be comprised of the Mayor, City Manager and Chamber of Commerce CEO. This resolution also gives this 3 person group the "sole-discretion" in granting the loans. Normally Chapter 380 agreements are those voted on by the entire City Council; but, this resolution would grant the Mayor, after an affirmative vote of the Review Committee, to sign the 380 Agreement on behalf of the City.
The resolution also allocates up to $1 Million from unrestricted fund balance to fund the Local Stimulus Program for Small Businesses. This is why I have the budget page with the sourcing of the General Fund at the top. 80% of the General Fund is funded by taxes. Of those, 55% are property taxes. While this is a great program for the City to offer, my main concern is that it is funded in large part, due to taxes. I'm not 100% sure that this is an appropriate way to use taxpayer funds. There's no question about the legality of it. I just have reservations about the City becoming a bank. What happens if someone defaults on the loan? One of the remedies the City has in case of a default is to: "(iii) take such other action as the City deems necessary and appropriate, consistent with the terms of the Agreement and applicable law." Does this include loan forgiveness? There are still questions to be answered at the meeting tomorrow, but these are my thoughts. I'd love to hear yours.
Stay safe and be well!
Melissa Olson
(text) 817-507-5162
molson@waxahachie.com
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