STAFF REPORT
City of Lancaster
CC 10
11/12/2024
TN
Date:November 12, 2024
To: Mayor Parris and City Council Members
From:George N. Harris II, Senior Director/Treasurer – Admin Services Chenin Dow, Assistant Director
Subject:Stand Strong Business Recovery Loan Forgiveness.
Recommendation:
1. Approve the forgiveness of all Stand Strong Business Recovery loans awarded to businesses deemed “essential” by the State of California and/or the Los Angeles County Department of Public Health during the COVID-19 state of emergency.
2. Authorize the City Manager or his designee to execute all related documents.
G.C. Section 84308: Yes
Fiscal Impact:
The City will forgive $32,272.83 in outstanding loan balances on the remaining Stand Strong Business Recovery loans.
Background:
Immediately following the State of California and Los Angeles County Department of Public Health “Safer at Home” orders in March 2020, the City Council enacted the Stand Strong Business Recovery Loan Program to provide struggling small businesses with a lifeline to help keep them afloat. These loans provided $5,000.00 - $20,000.00 at interest equal to the City’s Average Portfolio Yield for up to five years, with interest waived if loans were repaid in full within one year from the date of receipt.
Thirty-seven loans were awarded to small businesses throughout Lancaster, totaling $678,267.00 in funding.
Many businesses were hit hard by the “safer at home” orders issued by the State and County. As a 1 8
2 2
result of these policies, Los Angeles County was ranked first in the nation for the loss of small businesses and associated jobs due to COVID-19. According to the Los Angeles County Economic Development Corporation’s “Pathways for Resiliency” study, 7,500 small businesses were permanently shuttered, and over 400,000 jobs were lost in 2020 alone.
The proposed loan forgiveness would provide a significant financial boon for small local businesses affected by the pandemic-related closures. Thus, it would help ensure their ongoing operation and protect our community against further job losses.
Pursuant to IRS guidelines, any debt forgiveness of more than $600.00 may be reportable as income. The City will issue a 1099 to loan forgiveness recipients.