HomeMy WebLinkAboutStaff Report 4985
City of Palo Alto (ID # 4985)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 8/19/2014
Summary Title: MAP Update
Title: Microenterprise Assistance Program - Update and Discussion Regarding
the Proposed FY 2015 Budget and Program
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
Staff recommends that the Finance Committee review and comment on staff’s proposal for the
Fiscal Year 2015 Microenterprise Assistance Program.
Executive Summary
On May 5, 2014 the City Council voted to approve the Community Development Block Grant
(CDBG) program budget for Fiscal Year 2015. The budget included an allocation of $150,000
towards a second year of funding for the Microenterprise Assistance Program. At the time staff
provided a preliminary update on the success of the first year of the program and the City
Council voted to approve the additional allocation for a second year of funding, but referred the
Microenterprise Assistance Program to the Finance Committee for their review. At least one
Councilmember questioned whether the program was a wise investment of funds, given the
limited number of people it serves, and wanted to explore other eligible projects.
The following report contains a status of the program to date and provides the Finance
Committee with additional information on how the funds are proposed to be used during Fiscal
Year 2015. Staff has gathered feedback from the grant review committee, participants of the
program, and our community partners on ideas for shaping improvements to the program. The
Finance Committee is asked to review the report and provide comments about staff’s proposal.
Comments received can be incorporated into the implementation of the program and an
informational report or a recommendation can be provided to the City Council after the Finance
Committee meeting.
Background
On May 6, 2013 the City Council voted to approve the Community Development Block Grant
(CDBG) Program budget for Fiscal Year 2014. The budget included an allocation of $150,000
towards the development of a Pilot Microenterprise Assistance Program (MAP). Over the
City of Palo Alto Page 1
course of the fiscal year planning staff worked with the City’s Economic Development Manager,
the business community, and social service community partners. Staff’s approach in developing
the pilot M!P is rooted in Palo !lto’s spirit of innovation and the power of an idea. A humble
goal of helping one microenterprise was set as the benchmark for success of the program. With
a total of six grants awarded as part of the Pilot Program, staff exceeded that goal. On May 5,
2014 staff provided the City Council with an informational report on the success of the first year
of the program (Attachment A – Informational Report). Table 1, FY 2014 MAP Grantees,
provides a list of the grantees, the type of business, and the grant amount approved by the
Grant Review Committee.
TABLE 1: FY 2014 MAP GRANTEES
Grantee Name Business Type Grant Amount
Sherice Lane Hand crafted items $ 1,500
Kathy Wu Independent health insurance provider $ 7,000
P. Christopher
Murphy
Publishing company including website creation $ 9,200
Heekyoung Kim Hair stylist $15,000
Robin Angstadt Fine art and jewelry online $ 4,500
Walter Barnes Baseball and Softball Umpires $ 1,000
TOTAL $38,200
Based on the submittal deadlines for the CDBG program budget set by HUD and the late
issuance date of the MAP grant awards, staff did not have all of the relevant details for
Council’s review related to the proposed budget and program changes for Fiscal Year 2015 at
the time of the May 5th hearing. As a result, Council approved the additional allocation and
voted to refer the program back to the finance committee for review (Attachment B – City
Council Minutes).
Discussion
The Pilot MAP serves as an opportunity to increase awareness on the need for community
economic development strategies and on the fact that CDBG funds can be used to support a
variety of projects not previously explored or funded. Staff has found that there is a desire to
create new and direct economic opportunities in our community and an interest in the creation
of an environment that empowers individuals instead of enabling them to depend on the
system for assistance.
Over the past three months, staff has continued to administer the implementation of the Pilot
MAP for Fiscal Year 2014. After the May update to the City Council, staff spent a significant
amount of time working with the six grantees in creating implementation schedules tied to
actionable items. Table 2, FY2014 MAP budget and expenditures, provides an update on the
amount expended or committed through June 30, 2014.
City of Palo Alto Page 2
TABLE 2: FY 2014 MAP BUDGET AND EXPENDITURES
Item
Budget
Personnel
Supplies and Technical Assistance
Direct Grants
TOTAL
$ 36,000
$ 14,000
$100,000
$150,000
Amount Expended
or Committed
$25,192
$ 3,598
$38,200
Balance
_ $10,808
$10,402
$61,800
$66,990 I $83,010
There were a few minor setbacks along the way, including the City requiring each MAP grantee
to carry general commercial liability insurance prior to execution of the grant agreement, that
have informed our approach in program improvements. As staff embarked upon launching the
pilot MAP, four general program evaluation themes and questions were developed.
Specifically, staff wanted to make a determination on the target groups, program scale,
training, and overall program efficiency upon completion of the pilot phase. Since funding for
the six grantees has just started, staff has decided to wait a few months to formalize the
findings from the Pilot phase.
In the interim Staff held conversation with Grant Review Committee members, our community
partners, and grantees on ways of improving the different aspects of the program. Through
these conversations along with staff's direct experience in administering the program, the
following program improvements have been identified:
• Broaden the scope of MAP to include the whole community and its resources;
• Expand outreach efforts by publishing more information about the program during the
application window;
• Create various grant submittal windows (i.e. quarterly deadlines);
• Provide additional time to submit an application for funding;
• Provide extended technical assistance to MAP grantees prior to the submittal of a
formal grant application for funds;
• Provide individual funding for technical assistance workshops instead of hosting
workshops in Palo Alto as a Cohort;
• Host a meet and greet with eligible applicants and business mentors to increase
compatibility;
• Create a minimum grant threshold of $2,000;
• Create a streamlined application for those requesting small grants for less than $1,000;
• Provide additional guidance on how to obtain a D -U -N -S Number (required for all
businesses required to register with the US Federal government for contracts or grants);
• Solicit assistance from local banks to waive fees for the opening of a business bank
account.
Based on the information gathered, staff is proposing to solicit applications of interest to join
the Fiscal Year 2015 MAP Cohort. Applications will be reviewed by the Grant Review
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committee to establish an eligibility list similar to the one created during the Pilot program.
This year, however, Staff is aiming to identify a minimum of twenty-five (25) individuals that will
be eligible to submit applications throughout the fiscal year. Those placed on the eligibility list
will be issued a commitment letter with personalized training objectives prior to the submittal
of a formal application for MAP funds. By introducing a more structured program
implementation, the grantees will be provided with additional time to prepare themselves to
receive the funds.
Considering staff’s review of the program operation and on the feedback received from our
partners we developed the following budget outlining the use of funds for Fiscal Year 2015.
The budget assumes that we will have a minimum of twenty-five (25) individuals placed on the
eligibility list with an average grant amount of $6,800.
TABLE 3: FY 2015 PROPOSED MAP BUDGET
Item Budget
Personnel $ 30,000
Supplies and printing $ 5,510
Technical Assistance $ 15,000
Insurance $ 12,500
Direct Grants $170,000
TOTAL $233,010
Staff’s long term goal for this program revolves primarily around the community and the
integration of very-low income individuals. Ultimately, City Staff would like to use this program
as a way of engaging the community in this collaborative conversation with the hopes that the
community would absorb the program and no longer require the City to administer the
program. Instead, a non-profit organization with experience in these types of programs would
apply for funding to administer the program.
If the City chooses not to continue with the MAP program, the program would have to formally
be cancelled and funding would have to be carried forward into the next funding cycle and be
used for other eligible projects, such as multi-family housing rehabilitation.
Resource Impact
The total investment of CDBG funds for MAP that staff is proposing to utilize in 2015 is
$233,010. Staff is proposing to use the balance of $83,010 from Fiscal Year 2014 along with the
additional allocation of $150,000, authorized by Council on May 5, 2014, for a total budget of
$233,010 as outlined in Table 3 above.
Environmental Review
For purposes of the National Environmental Policy Act (NEPA) and the California Environmental
Quality Act (CEQA), this action itself is not a project; therefore, no environmental impact
assessment is necessary.
City of Palo Alto Page 4
Attachments:
Attachment A: City Council Staff Report (ID#4625) (PDF)
Attachment B: City Council May 5, 2014 Meeting Minutes (Item 11 only) (PDF)
City of Palo Alto Page 5
ATTACHMENT A
City of Palo Alto (ID # 4625)
City Council Staff Report
Report Type: Informational Report Meeting Date: 5/5/2014
Summary Title: Microenterprise Assistance Program
Title: Microenterprise Assistance Program - Update Regarding the Success of
the FY14 Pilot Program
From: City Manager
Lead Department: Planning and Community Environment
Recommendation
This is an informational report and no Council action is required.
Background
On May 6, 2013 the City Council voted to approve the Community Development Block Grant
(CDBG) Program budget for Fiscal Year 2014. The budget included an allocation of $150,000
towards the development of a Pilot Microenterprise Assistance Program (MAP). The princip al
goal of the Community Development Block Grant Program (CDBG) is to provide funding for the
development of decent housing, a suitable living environment, and expanding economic
opportunities for low-and moderate income persons. Palo !lto’s DG Program has primarily
focused on social services and affordable housing. While these efforts have been successfully
executed, one area that has lacked attention is investment of CDBG funds in Economic
Development strategies. The adopted 2010-2015 onsolidated Plan for Palo !lto’s DG
Program identified the following as high priority needs in the community:
Employment opportunities for low income persons, especially youth; and
Small business loan/grant programs for low income residents
In response, Palo Alto established a partnership with Downtown Streets, Inc. in July of 2011 for
the development of a Pilot Workforce Development Program with a primary focus on homeless
or previously homeless individuals. The program focuses on developing employment skills and
establishing partnerships with local businesses. Over a two year period this program has
successfully placed 40 previously unemployed individuals into employment and has created
partnerships with local businesses.
To date the Workforce Development Program (WDP) has flourished and we are seeing more
people reenter the workforce and feel a sense of pride. However, there are instances where
City of Palo Alto Page 1
individuals are not thriving in traditional work place environments and are not managing to
sustain the positions in which they are placed. Moreover, the types of jobs are low-skilled and
low-paying and do not provide a living wage. A second constraint is that some local businesses
do not respond positively to hiring WDP participants, although a strategy is underway to
strengthen the relationship between the WDP and local businesses. With a focus on the
homeless population, we have also found that there is a gap in services amongst low-income
individuals who could benefit from a similar program but have not been specifically targeted
and/or may require different services and support system than currently offered through the
WDP.
To that end, there is a desire to create new and direct economic opportunities in our
community and an environment that empowers individuals instead of enabling them to depend
on the system for assistance. According to the 2013 Silicon Valley Index, while Silicon Valley
has been adding jobs, income growth is uneven and there is a narrowing of middle-income
wage earners. Examining median income by educational attainment and ethnicity reveals the
complexity of our income gap. The report calls for Silicon Valley, and the greater bay area, to
take a fresh look at regional planning.
As funding for services continues to decrease, and with the manner in which federal dollars are
allocated, the availability of dollars that can be dedicated to public service activities will
continue to decrease. Therefore, the City must begin to think about the long term objectives of
the CDBG program and explore a different approach in the use of funds. The pilot MAP serves
as an opportunity to increase awareness of the potential innovative use of CDBG funds.
Discussion
Staff’s approach in developing the pilot M!P is rooted in Palo !lto’s spirit of innovation and the
power of an idea. A humble goal of helping one microenterprise was set as the benchmark for
success of the program. While staff took the time to conduct extensive research for the
development of this program, a simple framework and program design was prepared to guide
the general direction of the program (Attachment A). The framework allowed sufficient
flexibility to adjust as staff prepared the program to the public. Essentially it was the flexibility
in the program that afforded staff the opportunity to successfully launch MAP and exceed the
goal set for the pilot phase. Our strategy included leveraging existing community and business
networks to create the necessary infrastructure to support income eligible microenterprise
businesses. Specifically, staff worked with the business community to assist in the review of
applications for funding and with two existing CDBG subrecipients to create a pipeline of
applicants. In fact, one of the unique aspects of MAP is that is offers access to professionals at
no cost to participants.
MAP Grant Review Committee
Planning staff partnered with the ity’s Economic Development Manager on the formation of
the MAP Grant Review Committee. On November 7, 2013 staff pitched MAP, via a business
forum held at Boston Private Bank in Downtown Palo Alto, to a group of business leaders
City of Palo Alto Page 2
(!ttachment ). In a sense, this was staff’s presentation of its own microenterprise to gain
interest and buy in on a “prototype” for a formal program. Staff asked for individuals to serve
on the Map Grant Review Committee and for a subset of that group to help in providing us with
feedback on program implementation. Ultimately the grant review committee helped guide
the development of the program, served as an advisory committee to staff and mentors to MAP
applicants.
MAP Cohort
Research shows that people learn better in groups. Cohort programs provide an interactive
environment that brings members together to build community, foster creativity, build
leadership skills, and encourage greater progress. As such, our strategy included partnering
with two of the ity’s DG subrecipients to create a pipeline of applicants and the formation
of a MAP cohort. On December 20, 2013 staff hosted an orientation meeting with individuals
identified by Palo Alto Housing Corporation and Downtown Streets as potential applicants of
MAP funds. While we were expecting only a handful of individuals a total of seventeen people
attended. The program included a presentation by a local business owner on the challenges of
being a business owner and a “hopes and fears” exercise led by Palo !lto Housing orporation
staff.
After the initial orientation, staff held two follow up meetings: a business plan 101 workshop
and a budget and credit workshop. The meetings and workshops were well-attended and
members were interacting and encouraging each other. Staff is currently working on three
additional workshops including legal structures for businesses, business taxes, and marketing.
Application Process and Results
A call for pre-applications, along with a program at a glance flyer (Attachment C), was released
in December with application due by January 15, 2014. The flyer and pre-application was
routed to our community partners, business partners, and a news detail posted to the ity’s
main website for four weeks. Given the program is in its pilot phase, staff decided to limit the
marketing of the Program and not implement an extensive marketing campaign. Nevertheless,
Planning staff received twenty-six (26) pre-applications for MAP funds; 14 from the MAP cohort
and 12 from the general public. The grant review committee, along with Staff, reviewed the
applications and established a list of individuals that would then be eligible for MAP funds. Of
the twenty-six pre-applications, eleven individuals were placed on the eligibility list. Only those
placed on the eligibility list were invited to submit a formal application for MAP funds. Each
was assigned a business mentor to help with business related questions and assistance with the
development of a business plan. Of the eleven individuals placed on the eligibility list, seven
applicants for MAP funds were received. On March 18, 2014 the Grant Review Committee met
to review the applications and voted to approve six of the seven applications for funding.
An award ceremony was held on April 17, 2014 at Lucie Stern Fireside Room to honor both
grantees and our partners. Table 1, FY 2014 MAP Grantees, provides a list of the grantees, the
type of business, and the grant amount approved by the Grant Review Committee.
City of Palo Alto Page 3
TABLE 1: FY 2014 MAP GRANTEES
n
Grantee Name
Sherice Lane
Kathy Wu
[—P. Christopher
Murphy
Heekyoung Kim
Robin Angstadt
Walter Barnes
Business Type
Hand crafted items
Independent health insurance provider
Publishing company including website creation
Hair stylist
Fine art and jewelry online
Baseball and Softball Umpires
TOTAL
Grant
Amount
$ 1,500
$ 7,000
$ 9,200
$15,000
$ 4,500
$ 1,000
$38,200
Funds have been committed to these six microenterprises with the funding phased and linked
to actionable items related to the implementation of their business idea. A grant agreement
detailing the terms of the grant and the expectation from the City have been prepared for each
grantee. In summary, cash grants will not be awarded to recipients, but will be used to
"reimburse" eligible expenses. Each grant recipient will be required to provide quarterly
updates on their progress of launching their business. As an added perk, each recipient of MAP
funds will also be provided with a one-year membership to the Palo Alto Chamber of
Commerce.
Program Evaluation
As staff embarked upon launching the pilot MAP, four general program evaluation themes and
questions were developed. Specifically, staff wanted to make a determination on the target
groups, program scale, training, and overall program efficiency upon completion of the pilot
phase. Below is a summary of the themes and the associated questions:
• Target Groups: Did we serve those who we set out to serve?
• Program Scale: How many clients received funding and/or training -related services?
What is the magnitude of program services delivered in a fiscal year? What is the
volume of funding activity?
• Training Program Effectiveness: To what extent does the program succeed in assisting
clients to achieve key training objectives?
• Program Efficiency and sustainability measures: How efficiently does the program use
internal resources? How self-sufficient is the program? How diversified is the funding?
Some of the lessons learned include a higher focus and emphasis on technical assistance up
front and the introduction of a "meet and greet" for the MAP mentors and applicants.
Debriefing meetings will be scheduled with our partners and participants to review the program
from their perspectives beginning in June 2014. A full program evaluation will be conducted by
staff in June 2014 to inform the future of the program.
City of Polo Alto Page 4
Resource Impact
The total investment of CDBG funds for MAP approved for Fiscal Year 2014 was $150,000. Of
this amount, $36,000 was directed to cover staff time, $14,000 for Technical Assistance and
Supplies, and $100,000 for direct seed grants. Grants in the amount of $38,200 have been
awarded, as outlined in Table 2, FY 2014 MAP Budget. The amounts provided in Table 2 are
presented as commitment amounts since reimbursements have not been processed for the
direct grants. Staff is also scheduling three additional workshops prior to the end of the fiscal
year and they are included in the "commitments" to date column. Final expenditure totals will
be included in the City's 2014 Consolidated Annual Performance and Evaluation Report due to
HUD by September 30, 2014.
Item
TABLE 2: FY 2014 MAP BUDGET
Budget
Personnel
Commitments To Date
$ 36,000
$27,000
Supplies and Technical Assistance 1 $ 14,000
Direct Grants
TOTAL
$100,000
$ 5,400
$38,200
$150,000 $69,000
Any balance in funds will be carried forward into Fiscal Year 2015 to provide additional
technical assistance to the six grantees mentioned above and/or for future MAP applicants.
Funding will not be used for personnel costs. Projects that are encumbered will be continued
into the next fiscal year. Unused funds will fall to the fund balance for future use. As part of
future budget cycles, staff will recommend uses of these funds for City Council consideration.
Environmental Review
For purposes of the National Environmental Policy Act (NEPA) and the California Environmental
Quality Act (CEQA), this action itself is not a project; therefore, no environmental impact
assessment is necessary.
Attachments:
• Attachment A: MAP Program Design(PDF)
• Attachment B: Business Forum Presentation (PDF)
• Attachment C: MAP Program At a Glance (PDF)
City of Polo Alto Page 5
ATTACHMENT A - MAP PROGRAM DESIGN
PILOT MIRONTRPRIS !SSIST!N PRO R!M
R!MWORK/PRO R!M SI N
I. MISSION
Increase economic opportunities for low- to moderate-income residents through
self-employment, job creation, and business development.
II. VISION STATEMENT
Empower and improve the economic well-being of low income families and individuals
by providing local aspiring entrepreneurs with systems of support to start and grown
their own business that will increase their self-sufficiency and psychological outcomes.
This includes but is not limited to improved self-esteem and sense of control,
empowerment, and flexibility of care for family.
III. GOALS
Provide access to new opportunities to improve the economic self-sufficiency of low-
income families and individuals.
IV. TARGET GROUP
Very-low and low-income individuals
Participants of DST Workforce Development Program
Tenants of SRO developments
V. PROGRAM STRATEGY
Poverty Alleviation and Business Development:
The goal is to help the poor gain access to new opportunities that will enable
them to move out of poverty. This approach builds on the foundation of
entrepreneurship and seeks to empower clients by increasing their economic
literacy, business skills, self-esteem, and personal behavior appropriate to the
workplace. Ideally the Pilot MAP will help to accomplish the following:
Provide an innovative path out of poverty
Create self-sufficiency
Improve the survival rate of microenterprise businesses
Improve employment skills
Promote economic development
1
VI. MARKET ASSESSMENT
Market Demand
Currently the market demand for this service and program is primarily anecdotal.
Palo Alto's 2010-2015 Consolidated Plan identified a need to provide
employment opportunities for low-income persons including small business loan
programs for low income residents. As such, there is a desire to introduce a new
funding source and program. Staff will partner with PAHC and DST to complete
an entrepreneurial assessment of their participants in which they learn how to
identify their current skills and how to transform those skills into a viable
business. Through this partnership we have also identified an opportunity to
partner with the Palo Alto Adult School.
VII. SERVICES
Microenterprise development is defined by three basic services: training,
technical assistance to entrepreneurs, and access to capital. The selection of
services involves decisions about which ones have the most priority, how
distinct services will be sequenced and linked, and defining the eligibility criteria
for accessing them. Ideally the program aims to leverage existing services in
the community and utilize CDBG funds for seed capital grants.
Training
• Economic Literacy:
Prior to starting a
business, many
people need a better
understanding of basic
money matters such
as banking, saving,
taxes, and budgeting.
• Business Training:
Starts by exploring a
business idea and
culminates in a
business plan, closely
reviewing the many
steps in between,
including market
analysis, financing,
legal issues, and
management.
Technical Assistance
• Business Plan Review:
Clients often need
individual help to
work out specific
aspects of their
business plans.
• Loan Applications:
Program staff often
help clients prepare
loan applications.
• Mentoring: Programs
match new
entrepreneurs with
experienced ones for
advise and support.
Capital
• Seed capital grants:
For income eligible
clients, capital may be
provided in the form
of grants to encourage
specific business
activity that might
otherwise represent
too much risk for the
client.
• Individual
Development
accounts: Matched
savings instrucments
that encourage capital
accumulation for
approved purposes,
including business
investment.
VIII. PARTNERSHIPS
The program proposes to explore a variety of partnerships categorized as
follows:
Local Community Partners
Downtown Streets Inc.,
Palo Alto Housing Corporation
Palo Alto Adult School
Business Community
Banks
Chamber of Commerce
Local entrepreneurs
Workforce Development Services
NOVA
Work2Future
Renaissance Entrepreneurship Center
Lenders for Community Development
East Palo Alto Micro Business Initiative
SCORE
Small business administration
IX. MEASURABLE OUTCOMES
Our short-term goal is to issue one seed grant to an income-eligible individual in
Palo Alto by the end of the second quarter of Fiscal Year 2014. Program funds
will be used to leverage existing resources in the community and it is our
intention to track the following outcomes:
The number of jobs created as a result of the funding
The number of grants issued
The number of people assisted
X. INFORMAL BOARD
Planning staff will work with the City’s Economic Development Manager to reach
out to the business community about their role in the Pilot MAP. The short term
goal is to establish a grant review committee to assist in the review of
applications for funding and to serve as business mentors.
XI. EVALUATION
The intent of the program is to identify a new funding source to income eligible
microenterprises. Several evaluation questions have been developed to help
3
inform the future of the program. There are four basis evaluation themes and
corresponding questions:
Target Groups: Did we serve those who we set out to serve?
Program Scale: How many clients received funding and/or training-related
services? What is the magnitude of program services delivered in a fiscal year?
What is the volume of funding activity?
Training Program Effectiveness: To what extent does the program succeed in
assisting clients to achieve key training objectives?
Program Efficiency and sustainability measures: How efficiently does the
program use internal resources? How self-sufficient is the program? How
diversified is the funding?
4
ATTACHMENT B - BUSINESS FORUM PRESENTATION
THE VISION
"Empower and improve the economic well-being of low income
families and individuals by providing local aspiring entrepreneurs
with systems of support to start and grow their own business that will
increase their self-sufficiency."
- Pilot MAP Implementation Plan, City of Pot, Alt.
The Need
Program Overview
WFI COMF
BUSINESS FORUM
OVERVEW
Business Community
THE NEED
• 2010-2015 Consolidated Plan
• Identified a need for a small business loon/grant program
• Pilot Workforce Development Program
• In 2011 the City partnered with Downtown Streets, Inc.
• To dote 40 previously unemployed "individuals have been placed into
employment
• Obstacles with the program include low paying jobs
Income growth is uneven in Santa Clara County
• 2013 Index of Silicon Valley notes the gap between high- and low-income
earners is increasing
1
4/14/2014
MAP is perfectly in line with Downtown Streets Team's mission of
empowering people with the tools to become self-sufficient. This is
the opportunity for our team members to create their (Thin
opportunities for economic independence. We can't wait to see
our team members thriving on their own terms_
-Chris Richardson, Downtown Streets Inc.
Gaining support from HUD
• "I'm very excited to hear about how the Microenterprise Assistance
Program is working out. It's such a great idea. I really hope that
it's successful and can maybe even be used as a model for other
communities."
- Julia Van Roo, HUD CPD Representative
THE OPPORTUNITY
Microenterprises are the smallest, least portion of the business world,
but are one of the major job generators in our economy
• U.S. SBA in 2010 reported that small businesses are responsible for between
65 and 90 percent of all job creation
1 in 3 Campaign
• The Association for Enterprise Opportunity launched this campaign arguing
that If 1 in 3 microbusinesses hired one worker the nation would be at full
employment
• It is a strategy that can foster personal, community and economic
development
• Income gained can lift families out of poverty
• Theory of change
• Skills development and financing can unleash entrepreneurial capacity
r
THE STRATEGY
ilot Program
Target
Population
Networks
• City Council approved
• Staff's 6 -month goal
• Grant vs. Loan -Pro. ram
• Community Partners
• Building a MAP Cohort
• Leveraging existing resources
• Engage the business community
2
4/14/2014
Best Practices Local Program
NOVAS Microenterprise Program
• Funded through Sunnyvole
• Staff intensive
• Most successful business — Tailored Leather Motorcycle Clothing Company
Recommendations
• Education and Tedmical Assistance is Key
• Leverage existing resources
Engage the business community
MAP COHORT
• Creating a Pipeline for our Target Group
• Partnering with PAHC and Downtown Streets
• Application of Interest to gauge need and business types
• Orientation (proposed for late November)
• Two hour orientation to learn more about the program and application
• Sample Business Plan
• Information on available Technical Assistance
• 2 -Part Workshop
• Foundation Planning — Business Readiness, boot banking and savings
• Idea development and Benchmarlcing Developing the Business Plan
L
r
PROGRAM FEATURES
WHO CAN APPLY?
Applicant must meet the
income eligibility
requirements
• New and existing business
• Microenterprise
• Five or fewer employees
• At least one must be the owner
Recipient must create one
new job to an LMI person
FLIGIBLE USE OF FUNDS
• Seed grants
• Up to $15,000
• Working capital
• Equipment
• Inventory & supplies
• Marketing
• Payment of utilities, licenses,
and insurance
3
4/14/2014
Income Limits
Household Sire 1 Penn 2 Porv,s 3 Persons 4 Rsrmre 5 Porno. 6 Ponms 7 Persons 0 P.,,
30% of Ana
Media, m,o,,. $21,300
(Easromoly low(
50% of A,. ,
Modim Inmate 535,500 540,550 545,600 550,650 554,750 550,900 562,850 566900
N y1 )
$21,350 $27,100 $30,500 532,850 135,300 $37700 540,150
80% of dn.
Malian kwon. S52,550 160,050 167,550 575,050 S81,100 587,100 593,100 599,100
(sow)
MAP is a rare opportunity for low-income entrepreneurs fo not only
connect with community resources, but also fo network with like
minded individuals facing similar challenges in starting a business.
In short, MAP embodies the idea of 'Community," allowing for
what starts as an individual idea fo collective ownership by Palo
Alfons_
-Zia MacWilliams, Downtown Streets Inc_
i
Application Process
Grant Application
Draft application for review
and comment
• Formal Release Date,
December 2, 2013
• Application Due Date,
January 8, 2014
Staff will be available to
answer questions
Review and Award
• CDBG Staff will screen
applications for completeness
and eligibility
• MAP Grant Review
Committee will be provided
with a packet
• Committee will review
applications and make
recommendation
• Formal Award ceremony with
City Council
THE ASK
• MAP Grant Review Committee
• Provide feedbock on program implementation (November)
• Review committee meeting(s) /application review (January)
• Participate at the Award Ceremony (February)
• Sub -Committee
• Provide feedback on program implementation and application form
• Finalize Review Criteria (possible November meeting)
L
4
4/14/2014
Other Opportunities
Mentorship/Coack Consider
• Serving as a mentor for one of the applicants
• Serving as a guest speaker at one of the proposed MAP Cohort
Workshops
Other Opportunities
• Donating time to the Workforce Development Program
• Providing information on supplemental resources or assistance
• Potentially consider an in -kind donations of space
Thank you
Special Meeks to
Boston Private
• Contact
• Tommy Fehrenbach
,cktl :cnyof poloalto.org
• Steven Turner
-:loalto.ora
• Consuelo Hernandez
art hornnndr>IjjlcitvotonInaltn om
COMMENTS AND FEEDBACK
5
ATTACHMENT C - MAP AT A GLANCE
PILOT MICROENTERPRISE ASSISTANCE PROGRAM
MAP VISION STATEMENT
“Empower and improve the
econom ic well being of low
moderate income families
and ind ividuals by providing
loca l aspiring entrepreneurs
with systems of support to
start and grow their own
business that will increase
their se lf sufficiency”
Pilot MAP Implementation
Plan
For more information please visit our
website:
https://www.cityofpaloalto.org/news/di
splaynews.asp?NewsID=2480&Targe
tID=265
CDBG PURPOSE
The Community Development
Block Grant Program (CDBG)
provides financial resources to
assist in the development of
viable community by providing
decent housing and a suitable
living environment by
expanding economic
opportunities principally for
persons of low and moderate
income (LMI). Palo Alto s
CDBG Program is administered
by the Advanced Planning
Division of the Planning and
Community Environment
Department.
CONTACT INFORMATION
CITY OF PALO ALTO
Department of Planning and
Community Environment
250 Hamilton Avenue
Palo Alto, CA 94301
Consuelo Hernandez
(650) 329-2428
Consuelo.hernandez@cityofpaloalto.org
Steven Turner
Steven.turner@cityofpaloalto.org
Program Features and Benefits
The City of Palo Alto has allocated $150,000 in CDBG
funds towards a Pilot Microenterprise Assistance
Program (MAP).
MAP is a new Palo Alto based community program that
offers seed grants to assist individuals in starting their
own business and/or grant funds to grow an existing
business as a means of increasing participant’s
economic self-sufficiency.
The goal of MAP is to provide access to new
opportunities to improve the economic self-sufficiency of
low-moderate income Palo Alto families and individuals.
Who is Eligible to Apply?
Eligible businesses are limited to new and existing commercial enterprises with five (5) or fewer
employees, one (1) or more of which is the principal and owns the enterprise at the time of
application. Businesses receiving funds must be owned by a person defined as low-moderate
income (LMI) and either live or operate their business in Palo Alto.
Eligible Use of Funds Pre-Application Process
Applicants may request a grant amount ranging 1. All Applicants must complete the City of
from $500 up to $15,000 as part of their Palo Alto’s MAP Pre-Application form by
application. Eligible use of funds includes: January 15, 2014.
Working capital to support operations 2. Application forms should be submitted to:
Purchase of machinery, equipment, and City of Palo Alto furniture Planning and Community Environment
250 Hamilton Avenue Technology Infrastructure and upgrades Palo Alto, CA 94301 Inventory and Supplies Attn: Consuelo Hernandez
Marketing
3. CDBG Staff and the MAP Grant Review Payment of utilities, licenses, and insurance.
Committee will review all applications to Sample Micro-Businesses establish an eligibility list.
Retail: vendors, jewelers, craft shops 4. Those placed on the eligibility list will be
Service: restaurants/caterers, contacted with instructions pertaining to the
hairdressers, plumbers, and dog groomers formal application process.
Manufacturers: carpenters, craft artisans, 5. Formal Applications are tentatively due on
bakers, and specialty gift makers. February 13, 2014. Only those placed on
the eligibility list will be considered for
MAP funds.
ATTACHMENT BMINUTES
ACTION ITEMS
11. PUBLIC HEARING: Resolution 9411 entitled “Resolution of the Council
of the City of Palo Alto Approving the Proposed Fiscal Year 2015
Community Development Block Grant (CDBG) Funding Allocation and
the 2015 Draft Action Plan.”
Consuelo Hernandez, Senior Planner reported the City received funding from
the U.S. Department of Housing and Urban Development (HUD) annually as
an entitled city under the Community Development Block Grant (CDBG)
program. To be eligible for funding, the City had to prepare a five-year
strategic plan, referred to as a consolidated plan, and a one-year action
plan. The City was experiencing a 7.1 percent reduction in funds; however,
the budget was comprised of entitlement funds, program income, and prior
year resources. Funds were allocated to five categories: Public Service,
Planning and Administration, Economic Development, Housing, and Public
Facilities. The Federal statute placed two spending caps on Public Service
activities and Planning and Administration. Public Service activities were
similar to those funded under the Human Services Resource Allocation
Process (HSRAP). For Fiscal Year (FY) 2015, the spending cap was
$95,320. The Human Relations Commission (HRC) and Finance Committee
agreed to fund the Opportunity Center and SRO Resident Support Services
program at a higher rate than other agencies, because they addressed
priority needs contained within the consolidated plan. Staff proposed to
fund Project Sentinel through Planning and Administration. For FY 2015,
$113,996 was proposed for Planning and Administration. Staff included a
request to fund a consultant contract to prepare the next five-year
consolidated plan and to analyze fair housing services. Economic
Development activities did not have spending caps. Staff proposed to fund
both programs in Economic Development at the requested amounts. Staff
requested an additional $150,000 to fund the Microenterprise Assistance
Program (MAP).
Public Hearing opened and closed without public comment at 8:55 P.M.
Council Member Scharff felt $150,000 was a great deal of money to fund six
MAP projects. Perhaps those funds would be better spent for other high-
impact projects.
Ms. Hernandez advised that the total budget was $150,000. Of that,
approximately $37,000 funded six projects. Approximately $35,000 would
be spent on personnel costs. The balance of funds would be carried forward
to the next fiscal year.
05/05/2014 114- 576
MINUTES
Council Member Scharff clarified that $69,000 was utilized to fund six
projects. He inquired about Staff's reasons for requesting additional
funding.
Ms. Hernandez explained that Staff would assess and evaluate the program
in June 2014. Through that process, Staff hoped to determine additional
uses of funding. Staff proposed a roundtable discussion in June 2014 to
develop MAP for the following year. If the full amount of funding was not
utilized, then Staff would apply remaining funds to another program.
Council Member Scharff asked why Staff did not request $75,000 for MAP
and $75,000 for another high-impact program.
Ms. Hernandez indicated funding amounts were within the Council's
discretion. If the Council chose to decrease MAP funding to $75,000, then
Staff would have to revise the CDBG application, which was due May 15,
2014.
Council Member Scharff asked why Staff did not present CDBG funding
earlier so that Council revisions would not negatively impact programs.
Ms. Hernandez advised that Staff held two public hearings, and the Finance
Committee approved the recommendation.
Council Member Scharff reviewed Minutes of the Finance Committee's
discussion regarding the lack of an informational report. The Council had
the informational report; however, any revisions would delay the application.
That was not good planning.
Hillary Gitelman, Planning and Community Environment Director, did not
wish to miss the deadline, because it would jeopardize funding.
Council Member Scharff asked if Staff could submit an application for other
programs while revising MAP funding.
Ms. Hernandez reported the only option was to place funding in the
Workforce Development program; however, Staff allocated funding for
Workforce Development at the maximum amount requested. The City also
had to meet HUD's spending timeliness test. Staff could return with a
Budget Amendment Ordinance (BAO) after exploring options for use of
funding.
Council Member Scharff inquired whether Staff could submit the application
without MAP.
05/05/2014 114- 577
MINUTES
Ms. Hernandez advised that the Council could submit the application for MAP
funding of $150,000 and direct Staff to provide additional information on
how to spend the $150,000.
Council Member Scharff asked if the Council could refer a BAO to the Finance
Committee for review.
Ms. Hernandez indicated a BAO would not be necessary if funding remained
at $150,000. Staff would simply add a program under MAP.
Council Member Schmid recalled that CDBG funding was usually presented
with HSRAP funding. The Staff Report did not contain a comparison of FY
2014 allocations to FY 2015 allocations. He requested Staff comment on any
notable differences in allocations.
Ms. Hernandez noted the allocation for the Public Service category decreased
$8,200 in FY 2015.
Council Member Schmid inquired whether the proportionate share for each
agency would remain the same.
Ms. Hernandez stated the percentage of funding for each agency within
Public Service remained the same.
Council Member Schmid asked if any agencies also applied for HSRAP
funding.
Ms. Hernandez understood two agencies applied for both programs. The
Community Services Department (CSD) Budget contained allocations for
HSRAP.
Council Member Schmid inquired whether Staff would have a separate
presentation for HSRAP funding.
Ms. Hernandez replied no. HSRAP funding was based on a two-year cycle
and not contingent upon HUD funding.
Council Member Schmid felt the time could be appropriate for the Council to
consider an increase.
James Keene, City Manager, reported the Council had discretion to revise
funding during the Budget process.
05/05/2014 114- 578
MINUTES
MOTION: Mayor Shepherd moved, seconded by Vice Mayor Kniss to: 1)
adopt the Resolution allocating CDBG funding as recommended by staff in
the 2015 Action Plan; 2) authorize staff to submit the 2015 Action Plan to
the Department of Housing and Urban Development by the May 15, 2014
deadline; 3) authorize the City Manager, on behalf of the City, to execute
the 2015 application and Action Plan for CDBG funds and any other
necessary documents concerning the application and to otherwise bind the
City with respect to the application and commitment of funds; and 4)
beginning with CDBG 2016 cycle, Staff to provide pertinent information
describing the Microenterprise Assistance Program.
Mayor Shepherd recommended the Finance Committee review CDBG funding
during Budget hearings. She inquired whether impact investment was the
City's categorical name or a standard program name.
Ms. Hernandez indicated the Economic Development category was a general
language.
Mayor Shepherd felt impact investment was more logical than
microenterprise. Impact investment implied economic development at the
entry level of social entrepreneurship. Staff was working with the Downtown
Streets Team to identify those with viable abilities for MAP.
Council Member Holman noted the Motion did not contain the fourth item
recommended by the Finance Committee.
Ms. Gitelman stated Staff failed to include the fourth recommendation in the
Staff Report. It was a direction to Staff concerning the following year's
funding cycle.
Council Member Holman recalled that the Finance Committee included the
fourth point based on concerns similar to Council Member Scharff's concerns.
INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE
MAKER AND SECONDER to refer the Microenterprise Assistance Program to
Finance Committee for review.
Mayor Shepherd asked if the Finance Committee would review MAP during
the Budget process.
Council Member Scharff answered yes.
Ms. Hernandez reported Staff could return to the Finance Committee with
specific programs or projects within the $150,000 amount.
05/05/2014 114- 579
MINUTES
Council Member Scharff inquired whether any other Council Members
received the informational report. Because the informational report was
missing from his packet, he obtained a copy from the City Clerk.
Ms. Gitelman would investigate the matter.
MOTION AS AMENDED PASSED: 9-0
12. Comprehensive Plan Update -- Review of the Comprehensive Plan
Update Community Engagement Plan and Community Leadership
Group.
Mayor Shepherd explained the item allowed the Council to discuss and direct
Staff regarding the engagement plan and composition of the leadership
group. No Council action was required.
Hillary Gitelman, Director of Planning and Community Environment, recalled
that the Council specifically requested a review of the Community
Engagement Plan in March 2014. The engagement plan covered the entire
18 or 24-month update process. As Council Member Burt suggested earlier,
Staff could frame questions for the community in the visioning phase based
on Council comment. The Community Engagement Plan was intended as a
roadmap for engagement efforts. It contained three broad objectives: 1) to
solicit meaningful input regarding critical issues facing the City and a design
for the future; 2) to ensure participation by a wide cross-section of the
community including groups usually underrepresented; and 3) to ensure
public input informed the final work product. The Community Engagement
Plan grouped tools and technologies into four categories: 1) community
meetings and workshops; 2) virtual meetings and online interactions; 3) a
campaign to meet people in their spaces; and 4) formal public hearings.
Staff wanted to enlist of group of 12-15 members of the public who had
established networks in the community or who had expertise in community
engagement. The members would be appointed by the City Manager based
on applications. The group would focus primarily on community
engagement, meet monthly in public, and advocate for the Comprehensive
Plan process. Applicants would live or work in Palo Alto; have established
connections and networks in the community; belong to an existing
community or professional organization or have a special expertise in
community engagement; have energy and ideas about expanding
engagement; and be willing to meet on a monthly basis. Community
engagement would begin with a social event on May 8, 2014. Thereafter,
Staff would disseminate information regarding the first round of community
meetings and online interactions.
05/05/2014 114- 580