Item 18 2024-01807 City Council COVID-19 Response - ARPA Framework and Funding Priorities Approve the Establishment of a Small Business Assistance Center Pilot — Sacramento City Council, October 29, 2024

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-01807 10/29/2024 Discussion Item 18.

City Council COVID-19 Response: ARPA Framework and Funding Priorities: Approve the Establishment of a Small Business Assistance Center Pilot File ID: 2024-01807
Location: Citywide
Recommendation: Adopt a Resolution: 1) establishing a Small Business Assistance Center Pilot to satisfy term 3.a.ix. of the Settlement Agreement between the City of Sacramento, Sacramento Investment Without Displacement, and the Regents of the University of California; 2) authorizing the City Manager or the City Manager’s designee to negotiate and execute an agreement with an evaluation and feasibility consultant(s) for an amount not-to-exceed $100,000; and 3) authorizing the City Manager or the City Manager’s designee to reallocate unspent funds within the ARPA Inclusive Business MYOP (I02612040) to the ARPA Small Business Priorities MYOP (I02612000) in support of the Small Business Assistance Center Pilot.

Contact: Denise Malvetti, Deputy Director, (916) 808-7064, [email protected]; Mikel Davila, Senior Development Project Manager, (916) 808-8506, [email protected]; Ginger Weagraff, Development Project Manager, (916) 808-1222, [email protected]; City Manager’s Office of Innovation and Economic Development Presenter: Denise Malvetti, Deputy Director, (916) 808-7064, [email protected]; Mikel Davila, Senior Development Project Manager, (916) 808-8506, [email protected]; Ginger Weagraff, Development Project Manager, (916) 808-1222, [email protected]; City Manager’s Office of Innovation and Economic Development Attachments:
1-Description/Analysis
2-ARPA Reinvestment Fund Programs
3-Small Business Assistance Summary
4-Proposed Small Business Assistance Center Pilot Program 5-Resolution
Description/Analysis
Issue Detail: On September 14, 2021, the City Council adopted the American Rescue Plan Act of 2021 Framework and Funding Priorities (ARPA framework). The adopted framework included funding

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File ID: 2024-01807 10/29/2024 Discussion Item 18.
allocations in the following areas:

1. Small Business and Commercial Corridor Revitalization;

2. Homeless and Housing;

3. Youth, Workforce Training, and Gang Prevention;

4. Arts and the Creative Economy; and

5. Valuing City Employees and Addressing Organizational Needs.

On October 19, 2021, the City Council adopted Resolution No. 2021-0313, which authorized the City Manager or the City Manager’s designee to accept $112.2 million of ARPA funding, establish the ARPA Reinvestment Fund (Fund 1003), allocate $112.2 million of ARPA funds to provide government services, and budget the resulting available resources in the ARPA Reinvestment Fund to assist with recovery and reopening efforts. Of the $112 million received, the City committed over $28 million to commercial corridor revitalization and small business support.

The Small Business Assistance Center is the evolution of the initial ARPA-funded small business programming and adjusts strategies to promote economic recovery and growth. The Center is designed to be a two-year pilot funded by ARPA Small Business and Commercial Corridor Revitalization funds with key components including:

Program Name Summary
Property and Business
Improvement District (PBID)
Support Program
Provides one-time support for PBIDs to conduct the
following activities: 1) business outreach, engagement and assistance; 2) marketing; and 3) cleanliness and safety activities
Technical Assistance Providers
Program
Offers small businesses complimentary technical
assistance from an experienced business support
organization and offers access to a roster of consultants specializing in access to capital, marketing, lease
education, accounting/bookkeeping, government
contracting, and other services as identified
Microgrants Offers qualifying small businesses who participate in the City’s technical assistance program access to microgrants between $2,500-$5,000
Fee Credits Offers qualifying small businesses up to $2,500 in credits for eligible City fees
Economic Data Software Provides an economic data software platform to better address small business needs via a publicly available tool that will offer insightful market, industry, and location data Salesforce Customer
Relationship Management
(CRM) System
A database linked to 311 that is used to track businesses and their technical assistance service requests. The CRM can generate robust reports on the Center’s activities and impact. This tool is critical to evaluating the success of the Center and the small businesses that take advantage of it.

Dedicated OIED Staff Assigned
as Members of the Small
Business Assistance Team
Assigned staff will be the primary points of contact for small businesses. The team will be responsible for
managing the Center’s programs and services as well as
evaluating outcomes and impacts of the pilot.

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File ID: 2024-01807 10/29/2024 Discussion Item 18.

For more information about the Small Business Assistance Center programs, please see Attachment

4. Simultaneous to designing the Center, staff began engaging with Sacramento Investment Without Displacement (SacIWD) to satisfy a settlement agreement provision that required the City to work with SacIWD to develop a small/local business protection and development program for Council consideration. During discussions, both groups agreed that it would be advantageous to utilize the Center as the foundation for a small/local business protection and development program.

Staff and SacIWD have worked collaboratively to examine plans for the Center and incorporate enhancements that would not only improve programming, but also advance diversity, equity, and inclusion goals consistent with the City’s Inclusive Economic Development Investment Strategy. The aspects include:

1. Designing for diversity, equity and inclusion through:
a. A standardized monitoring and evaluation program that tracks a standard set of metrics over two years and iterates along the way to ensure equitable results. b. Adopt a proven inclusive outreach and engagement practices that are intended to ensure businesses that are most in need are aware and utilizing the Center’s services and programs. A detailed list of outreach and engagement tools is listed in Attachment 4 and a few examples are:
i. Utilizing the City’s Community Engagement Team resources such as community ambassadors, translation and interpretation, social media outlets, ethnic media contracts, etc.

2. Prepare an annual impact report to share impact results, areas for improvement, business testimonials and more.

3. Hire an evaluation consultant to monitor year 1 progress, assess program impact, and structure a monitoring and evaluation program for year 2 that aligns with potential funding opportunities.

4. Hire a feasibility consultant to research the following ideas for future Center components:
a. Legacy Business Program-a program to support, recognize, and preserve small

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File ID: 2024-01807 10/29/2024 Discussion Item 18.
businesses that have been operating for many years and contribute to a neighborhood’s vitality;
b. Heritage Tourism Program-a program to attract visitors to places and activities that authentically represent a neighborhood’s history, identity, and culture; and c. Social Enterprise Incubator Program-a program to support the creation of or transformation into a cooperative, B-corporation, Employee Stock Ownership Plan (ESOP), employee-owned business, etc.

Policy Considerations: The proposed actions are consistent with both the adopted ARPA Framework and Resolution No. 2021-0313. The proposed actions are also consistent with Council’s previous actions toward supporting inclusive economic development. Such actions include Resolution No. 2018-0392 where Council adopted an inclusive economic development framework, Resolution No. 2019-0124 where Council adopted an inclusive economic development strategy and action plan, the 2019 adoption of the Inclusive Economic Development Investment Guidelines and the 2021 adoption of ScaleUp Sacramento: An Inclusive Economic Development Action Agenda.

Economic Impacts: The proposed actions will further promote economic recovery and growth for the Sacramento small business community.

Environmental Considerations: The actions are not a project that is subject to CEQA because they constitute an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines §15378(b)(5)).

Sustainability: Not applicable.

Commission/Committee Action: Not applicable.

Rationale for Recommendation: Post pandemic business recovery needs, especially for businesses in disadvantaged and under-resourced areas, remain. The experience and lessons staff learned from small business assistance programs funded through CARES and ARPA led to the recommendation to establish the Small Business Assistance Center Pilot. The Center provides dedicated staff, programs and services tailored to Sacramento’s small and micro businesses.

Additionally, SacIWD and City staff designed the Center with an eye toward diversity, equity and inclusion. The evaluation metrics and outreach practices woven into implementation of Center programs and services put Sacramento’s disadvantaged and under-resourced communities at the forefront.

Financial Considerations: There is sufficient funding available (ARPA Reinvestment Fund, Fund 1003) in the ARPA Small Business Priorities MYOP (I02612000) to complete the recommended actions.

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File ID: 2024-01807 10/29/2024 Discussion Item 18.

Local Business Enterprise (LBE): Staff will comply with the 5% LBE preference requirements when issuing competitive solicitations for the feasibility and evaluation consultant(s).

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Attachment 2
ARPA Reinvestment Fund (Fund 1003) $113,782,879
Program Description Approved
Expenditure Category
Aggie Square Job Center 1,000,000 3
Al Fresco Dining Program Development 189,139 1
Animal Services for the Homeless (ASHR) Response Team 529,520 2 ARPA Grant Liaison Consulting Services 1,049,943 5
Arts and Cultural Nonprofits Grant Matching Funds 2,000,000 4 Arts Journalism Grant Program 250,000 4
Business Compliance Unit (BCU) Night Team 1,473,669 5
Center for Workers' Rights 550,000 3
Childcare Services 1,500,000 3
Children and Youth Services Program 720,000 3
Citywide Equity Study 250,000 1
Code Enforcement 205,683 2
Community Response Staffing Expansion 201,340 2
Comprehensive Siting Plan - Location Buildout 1,568,236 2 Comprehensive Siting Plan - Meadowview Acres Tree Removal 224,999 5 Comprehensive Siting Plan - Property Acquisition 12,312,624 2 Continuation of Existing Homelessness Programming 6,735,807 2 COPS Hiring Program Grant Matching Funds 4,044,804 5
COVID-19 Homeless Response Program 2,900,000 2
Creative Businesses 1,750,000 4
Creative Economy Focused Youth Workforce Development 1,250,000 4 Cultural Arts Awards 250,000 4
Digital Equity Response Program 250,000 3
Direct Investment Program 750,000 3
Downtown Core and Old Sacramento Revitalization 3,225,403 1 Downtown Ice Rink Piping Replacement 286,395 1
Food Justice Task Force 1,000,000 3
Forensiclean Extended Services 1,000,000 2
Forgivable Loan Program 125,000 1
FY2022/23 Affordable Housing Project 11,210,003 2
Gang Prevention and Intervention 1,500,000 3
Grants Management Technology System 180,000 5
Grove Emergency Bridge Housing 92,500 2
Illegal Dumping Support 131,997 2
Individual Artists and Creatives 2,625,000 4
K Street Lighting 332,755 1
Labor Negotiations 9,893,510 5
Lighting and Safety Enhancement 870,144 1
Local Food Bank Provider Support 500,000 3
American Rescue Plan Act (ARPA) Reinvestment Fund Programs (reflects Council actions through 10/15/2024)
Attachment 2
Program Description Approved
Expenditure Category
Old Sacramento Boardwalk Repairs 600,000 1
Northgate Boulevard Economic Recovery Plan 3,000,000 1
Northgate Boulevard Fence Repair Project 2,000,000 1
North Market Public Lighting 74,453 1
North Sacramento Code Enforcement and Outreach 450,000 1 North Sacramento Economic Recovery Plan 4,875,000 1
Public Records Staffing 3,319,727 5
Public Works Support of Homelessness Programming 572,000 2 Respite Centers Program 2,240,290 2
Rio City Café Sewer Replacement 230,000 1
Sacramento Inclusive Economic Development Collaborative 2,365,000 1 Sacramento Native American Health Center 100,000 1
Small Business Priorities 8,526,711 1
Substance Use Respite and Engagement Program 1,300,000 2 Tourism Recovery 1,875,000 4
Towing Administration Fee Reform 200,000 1
Vaccine Outreach and Education 1,000,000 1
Workforce Training Programs 2,750,000 3
Youth Pop-Up Program 1,300,000 3
Youth-Serving Organizational Resiliency Fund Grant Program 480,000 3 $112,186,652
ARPA Balance $1,596,227
Allocation of ARPA by Mayor/Council Priorities Category Funding Small Business and Commercial Corridor Revitalization 1 28,700,000 Homeless and Housing Commitment 2 41,000,000
Youth, Workforce Training, and Gang Prevention 3 12,300,000 Arts, Creative Economy, and Tourism 4 10,000,000
Citywide Organizational Needs 5 20,186,652
Total 112,186,652$

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Small Business Assistance Summary
Introduction
The City of Sacramento (“City”) is committed to fostering a strong, inclusive, and vibrant economy by encouraging job creation, business growth, and development activities. Home to approximately 21,876 businesses, the City relies on the business community to serve as the heart of our local economy. Not only are our businesses critical to Sacramento’s quality of life and opportunities for upward mobility, but the health of our businesses is also directly tied to the City’s fiscal sustainability.

The City’s 2024/25 budget projected sales tax revenue to be approximately $246 million, which constitutes 30% of General Fund Revenues. Additionally, Property Tax was estimated to be $229 million and Transient Occupancy Tax was estimated to be $34.5 million. All these revenue streams are directly tied to the economic health of our community and our City.

As an advocate and resource, the Office of Innovation and Economic Development (“OIED”) assists in creating the conditions that make it easy to do business in Sacramento. Recognizing that many businesses are still feeling the repercussions of the COVID-19 pandemic, the City is proposing the establishment of a Small Business Assistance Center Pilot (the “Center”). The Center consists of several services meant to address the diverse and varied needs of Sacramento’s businesses. While the City has always offered business support in many ways, the historic rise in need warrants the launch of a structured program.

The remainder of this report will delve into the background of how past actions informed the Center. The report will then provide an overview of past and current small business programming. The report will conclude by describing how lessons learned informed the components of the proposed Center.

Background
Past Council Actions and Regional Initiatives
The City of Sacramento’s small business assistance programming is informed by myriad past Council actions and regional initiatives. The following section highlights several key efforts that have and continue to guide how the City supports small businesses.

Project Prosper and Brookings Institution Regional Prosperity Plan In 2017, the City hired a team of national economic experts to launch Project Prosper. The goals of Project Prosper included:

1. Researching best practices for how modern metropolitan economies function,

2. Diagnosing structural strengths and weaknesses of Sacramento’s current economy and its prognosis for the future, and

3. Identifying ways to improve the City’s economy and quality of life.

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Also in 2017, the City’s partners commissioned the Brookings Institution to study Sacramento’s regional economy and devise a regional prosperity plan.

Both initiatives yielded several troubling economic findings:

1. The Sacramento region ranked in the bottom third of the 100 largest metropolitan areas when measuring growth, prosperity, and inclusion;

2. More than a third of the Sacramento region’s residents struggle to make ends meet and these struggling adults are disproportionately people of color and people with lower levels of education;

3. Employment in the Sacramento region’s tradeable industries is growing slower than the nation; and

4. Employers are demanding workers with higher education and digital skills although Black and Latino workers are underrepresented in medium and high digital skill occupations.

Inclusive Economic Development Framework, Funding Strategy, and Action Plan
In direct response to the troubling findings identified through Project Prosper and the Brookings Institution report, in 2018 and 2019, the City Council created an Investment Committee to serve as an advisory board and adopted various inclusive economic development policies including:

1. A set of inclusive guiding principles;

2. A quality-of-life index;

3. A criteria and performance metrics system; and

4. An inclusive economic development funding strategy and action plan.

Putting the inclusive economic development policies into operation, the City mapped out implementable steps towards fostering citywide development and job growth, while prioritizing strategic investments for people of color, low-income individuals, and underinvested communities.

Also at this time, the City Council created the Neighborhood Development Action Team (NDAT).

Led by OIED and the Community Development Department’s Planning Division, NDAT is committed to ensuring Sacramento’s neighborhoods and commercial districts reflect a sustainable, resilient, and inclusive economy. The mission is to increase the quality of life and economic growth of the people, businesses, and places in Sacramento’s historically disenfranchised and disinvested neighborhoods. Areas of focus and guiding principles include building capacity, creating ownership opportunities, promoting anti-displacement strategies, as well as fostering collaboration, inclusion, and equity.

To bolster NDAT efforts, the City also created a Community Engagement (CE) Team in the Office of Innovation and Economic Development. Consisting of seven full-time equivalents, the CE Team aims to educate, engage, and empower people, businesses, and places, especially historically disinvested areas and residents by:

1. Acknowledging the barriers that people of color and marginalized communities experience in accessing City government programs and services or participating in public processes;

2. Recognizing diversity as both a strength and opportunity; and

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3. Recognizing every project and initiative is different and therefore the approach to engagement must be different.

The CE Team uses best practices to conduct meaningful outreach by eliminating cultural and language barriers with a focus on reaching the underserved. Some projects spearheaded by the CE Team include the creation of a community ambassador program that utilizes trusted messengers to disseminate City information and resources, the development of a citywide racial equity initiative, and participation in a national fines and fees study. The purpose of these projects is to identify reforms with the aim of addressing disproportionate impacts and reducing inequities.

ScaleUp Sacramento
In 2021, the City commissioned a report focused on tradeable sectors called ScaleUp Sacramento. Addressing the Brookings Institution finding that Sacramento’s tradeable industries, which are industries that export goods or services and bring new money into our region, are growing slower than the nation, the report examined the opportunity sectors of:

1. Future mobility

2. Life sciences

3. Clean economy

4. Agriculture, food, and beverage manufacturing

5. Headquarter and business services
The report focused on identifying strategies for how Sacramento can inclusively grow these industries through the deployment of five market levers which included:

1. Enhancing regional industry clusters

2. Ensuring a prepared workforce

3. Developing the innovation and entrepreneurship ecosystem

4. Integrating neighborhood and regional development

5. Creating a connected, cross-sector economy
Since ScaleUp Sacramento’s adoption, the City and region have made advances in these areas, especially in the life sciences sector with the construction of Aggie Square.

It is also important to note that according to the Brookings Institution’s Metro Monitor 2024, the Sacramento region ranks considerably higher in many of the categories identified as troubling back in 2017. The Sacramento region now ranks 15th in growth; 17th in prosperity; 4th in inclusion; 9th in racial inclusion; and 3rd in geographic inclusion when compared to 54 other very large metropolitan areas across the nation. While these improved economic indicators demonstrate progress, there is always potential for greater advancement.

Overview of Past Small Business Assistance
As evidenced by the Council actions shared above, the City has a long history of steadfast commitment to inclusive economic development. It is within this context that this section will provide an overview of the City’s past small business assistance programming. Given the

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unprecedented impact of the COVID-19 pandemic on small businesses, the section is further divided into:

1. Pre-COVID assistance; and

2. COVID response.

The section concludes by summarizing the lessons learned that helped shape the proposed Center.

Pre-COVID Assistance
Prior to the pandemic, the City’s small business programming consisted of several smaller-scale core functions including business walks, technical assistance funding and referrals, and help navigating city processes. Through the Innovation and Growth Fund, the City also started two programs pre-COVID but continues to operate them at present. The following subsections describe each program in greater detail and provide outcome data.

Small Business Technical Assistance
Through the years, OIED has contracted with various business support organizations and chambers of commerce to provide technical assistance. Each year, the City typically invested around $100,000 to fund small business training, instruction, and consulting services. While performance data varied based on each contractor’s scope, metrics tracked included the number of new businesses launched, the number of businesses scaled or expanded, the number of beneficiaries who developed a business plan, the number of loans funded, the amount of loans funded, the number of new jobs created, and the number of jobs retained.

Innovation Grant Program
Established in 2016, the Innovation Grant Program, formerly known as the Rapid Acceleration, Innovation, and Leadership in Sacramento (RAILS) Grant Program, can award up to $1 million each year to support Sacramento’s innovation ecosystem.

Funding of past cohorts helped dozens of organizations to expand and improve their offerings to startups, entrepreneurs, and individuals. Grant awards also acted as validation for organizations, which enabled them to attract external funding.

Even though the program went on hiatus during the pandemic as staff focused on the deployment of federal relief funding, the grant program resumed in 2023 with redesigned guidelines meant to support the innovation ecosystem’s areas of greatest need. Informed by the Mayor’s Technology Council, the new focus areas included:

1. Innovation event grants of up to $15,000 to fund one-time or a series of events focused on fostering knowledge and ideas that inspire entrepreneurship and the growth of innovative businesses and programs

2. Ecosystem building grants of between $20,000 and $250,000 designed to catalyze innovation in the startup community and build pipelines for entrepreneurs into key industry verticals through programming such as incubator and accelerator, technology commercialization, coworking, and training programs

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In total, the City received over 150 applications requesting $15.5 million in funding. Given the hiatus during the pandemic, the City ultimately awarded 28 grants totaling approximately $2 million and programming is underway.

Since the 2023 grants are still operating, the City does not have current outcome data yet.

However, here is a list of metrics that the City anticipates collecting:

1. Innovation Event Grants
a. Number of attendees
b. Quantification of earned media (e.g. number of articles written, social media hits, and website analytics)
c. Attendee survey data
d. Amount of funds raised (e.g. sponsorship, tickets sold, etc.)

2. Innovation Ecosystem Building Grants
a. Number of businesses supported
b. Number of new businesses formed
c. Amount of revenue generated
d. Amount of venture capital raised
e. Number of new jobs created
In 2024, the Innovation Grant Program will award $500,000 in grants to business incubator and accelerator programs with recommendations for awards anticipated to be made to City Council by the end of 2024.

Awarded grantees will nurture and support early-stage businesses located in the City of Sacramento with the goal of the cohort participants starting or growing their own businesses, spurring innovation, and stimulating economic development.

Overall, the Innovation Grant Program plays a key role in fostering the startup pipeline and ensuring there are resources to support the City’s innovation ecosystem.

Economic Gardening
Established in January 2020, Economic Gardening uses innovative ways to support the scaling of second-stage companies, which are small businesses poised to experience exponential growth. Specifically, each year, the City sponsors 10 businesses to participate in a cohort-style program that involves two phases.

In the first phase, cohort members work with experts from the National Center for Economic Gardening who perform extensive market research to develop individualized growth strategies tailored to each participant’s unique circumstances.

In the second phase, cohort members receive a $50,000 matching grant to implement the growth strategies. In addition to the grant, cohort members receive ongoing technical assistance.

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Based on data captured upon program entry and program completion, the first two cohorts collectively resulted in the following outcomes:

1. 50% increase in revenue growth from $44,838,775 to $67,128,000

2. 30 new, full-time equivalent positions

3. 12 new internships

4. 15 of the 16 businesses remain open, with one closing due to retirement As demonstrated by the revenue and job growth outcomes, Economic Gardening is an effective program with a significant return on investment. Since both cohorts completed thus far occurred during the COVID-19 pandemic, there is potential for even greater growth in future cohorts.

Another important factor to underscore is that Economic Gardening plays a critical role in ensuring the City’s continuum of business services is comprehensive. Offering acceleration assistance, Economic Gardening is addressing the needs of mid-sized businesses who are well-positioned to expand.

COVID Response
In direct response to the COVID-19 pandemic, the City invested over $58.6 million in federal aid to support the recovery of small businesses and commercial corridors. Specifically, the City invested:

1. $19.1 million via the Coronavirus Aid, Relief, and Economic Security (CARES) Act;

2. $19.5 million via the Federal Emergency Management Agency’s (FEMA) disaster public assistance program; and

3. $28.5 million via the American Rescue Plan Act (ARPA).

The following sections provide more information about each federal relief tranche, the types of small business assistance offered, and performance metric data.

Coronavirus Aid, Relief, and Economic Security (CARES) Act The first tranche of federal aid came from the CARES Act. Of the $89 million received, the City appropriated $19.1 million directly to small business support.

Small Business Forgivable Loan Program
The City invested $9.8 million to establish a forgivable loan program providing small businesses with up to $25,000. In total, the program provided 1,409 businesses with loans. The average loan amount was $6,940.

Small Business Technical Assistance Grant Program
To complement the forgivable loan program, the City invested another $8.1 million in small business technical assistance. The City contracted with several providers to offer a variety of small business technical assistance including industry specific support. In total, the program helped over 6,488 business owners access capital, increase business resiliency, identify repositioning strategies, and develop new business plans.

Temporary Al Fresco Dining Grant Program
In response to COVID-related indoor dining restrictions, the City designed and implemented a temporary outdoor dining program allowing local restaurants to obtain time-limited permits for

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expanded sidewalk and street closure dining. To offset the costs of creating outdoor dining facilities, the City invested $1 million via 229 grants. The City also purchased and distributed nearly 400 outdoor heaters to support outdoor dining and other business activities.

Federal Emergency Management Agency (FEMA) Disaster Assistance Program In addition to CARES, the City participated in a state-led emergency feeding program called Great Plates Delivered. Funded by the Federal Emergency Management Agency (FEMA), Great Plates Delivered featured the dual purpose of:

1. Providing nutritious meals to food insecure seniors

2. Providing income to locally owned restaurants whose operations were affected by the public health orders
Through Great Plates Delivered, the City leveraged $19.5 million in federal disaster assistance to serve 845,000 meals to 1,100 seniors. The program also supported 52 restaurants and catering businesses, 39 of which were in a federally designated Promise Zone or Community Development Block Grant eligible census tract. Given the high volume of daily meal kits needed, the program also provided technical assistance to participating restaurants. Assistance ranged from menu planning help to ensure meals met nutritional requirements to logistical help to ensure adherence to catering food safety procedures.

American Rescue Plan Act (ARPA)
The second tranche of federal aid came from the American Rescue Plan Act (ARPA). Of the $112 million received, the City appropriated $28.5 million to commercial corridor revitalization and small business support. Building upon the CARES investments and with the urgent circumstances of the COVID-emergency beginning to wane, the City became more intentional about targeting ARPA small business investments within disadvantaged communities.

Minority Business Assistance Kickstart and Recovery Program The City invested $3.5 million into a 16-partner network called the Sacramento Inclusive Economic Development Collaborative. Focused on conducting outreach through the deployment of business navigators and providing technical assistance to small businesses located within historically disinvested commercial corridors, the Minority Business Assistance Kickstart and Recovery Program achieved the following outcomes:

1. 602 businesses connected to technical assistance

2. 1,580 technical assistance hours logged

3. 12 educational webinars hosted

4. 20 websites created

5. 3 lease agreements executed

6. 97 businesses participated in training opportunities

7. 17 jobs created
Marginalized Communities and Small Business Coalition
The City awarded $500,000 to the California Black Chamber of Commerce to provide specialized technical assistance targeting marginalized subsects of the small business

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community. The types of technical assistance offered were aimed at overcoming long-standing inequities that made it harder for minority-owned businesses to endure the pandemic and access recovery resources.

The project also added a youth entrepreneurship component aimed at further addressing the inequities that arose from generational poverty caused by lack of investment in underserved areas. Outcomes included the following:

1. 96 small businesses served by receiving technical assistance a. 51 trainings hosted
b. 6 small businesses assisted with adding positions and/or hiring new staff

2. 12 small businesses registered for a government contracting or procurement opportunity a. Of the 12 small businesses who registered, one small business applied for a government contracting or procurement opportunity—at the time of closeout unknown if successful
b. Additionally, hosted a contractor resource conference focused on government contracting featuring 14 government agencies and 127 attendees

3. 14 small business received a state or federal certification

4. 5 small businesses received a connection to a financial institution a. $1.3 million secured in financing/loans

5. 6 small businesses received micro grants ranging from $2,500 to $10,000

6. 10 small business received $706,374.30 in employee retention tax credits

7. 23 small businesses received business plan assistance a. Of the 23 small businesses who received business plan assistance, 17% or 4 small businesses applied for a business license, employer ID number, incorporation status and/or a fictious business name statement

8. 56 small businesses received marketing plan assistance a. Of the 56 small businesses who received marketing plan assistance, 38% or 21 small businesses received website assistance including creation, design, and/or enhancement services
b. Of the 56 businesses who received marking plan assistance, 20% of 11 small businesses revised their marketing strategy and/or produced at least one 60- second radio commercial

9. 32 small business owners received financial literacy or wealth building training a. Of the 32 small businesses who received financial literacy or wealth building training, 13% or 4 small business owners opened savings accounts b. Of the 32 small businesses who received financial literacy or wealth building training; 3% or 1 small business owner increased their credit score c. Of the 32 small businesses who received financial literacy or wealth building training; 3% or 1 small business owner decreased debt

10. 14 youth received entrepreneurship training

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a. 30 hours of industry job training provided to youth in energy, construction, landscaping, and farming
b. Of the 14 youth who received entrepreneurship training, 50% or 7 youth developed a shared business plan
c. Of the 14 youth who receive entrepreneurship training, 14% or 2 youth obtained jobs while enrolled
Shop 916 Gift Card Incentive Program
To incentivize shopping local, the City established a gift card program with the dual purpose of:

1. Encouraging residents to shop within Sacramento with the goal of minimizing sales tax leakage into other jurisdictions

2. Offering participating businesses increased visibility To date, the program has 121 small business participants. The program also boasts a 210% return on investment, generating $796,000 in gift card purchases with only a $257,000 investment from the City to offer bonus “buy one, get one” incentives. Given the program’s success, staff is seeking Council approval this fall to extend the City’s contract with the gift card service provider for another two years.

Permanent Al Fresco Dining Grant Program
Building upon the popularity of the Temporary Al Fresco Dining Grant Program deployed with CARES funding, the Permanent Al Fresco Dining Grant Program funds the establishment of permanent outdoor dining spaces. Thus far, the program has received over 100 grant applications from local restaurants.

Northgate Boulevard Economic Recovery Plan
To further offset the disproportionate impacts caused by the pandemic within underserved areas, the City appropriated two $5 million allocations to the historically disinvested commercial corridors of Northgate Boulevard and Del Paso-Marysville Boulevard with the goal of encouraging economic recovery and growth.

For Northgate Boulevard, the City launched a commercial storefront improvement grant program. The $200,000 grant program will pay for exterior storefront improvements. Example improvements include exterior painting, the installation of new signage, and the removal of exterior clutter. The City recently closed a solicitation and will issue awards this fiscal year.

The City also contracted with the Sacramento Hispanic Chamber of Commerce to implement the following business assistance services:

1. Business assistance grant program—awarded $50,000 in $2,500 micro-grants to 20 Northgate Boulevard small businesses who suffered negative economic impacts due to the pandemic.

2. Business outreach, referral, and case management program—funding a business navigator to conduct business outreach, provide first-line business assistance triage, and facilitate referrals to local business support partners. During the 2023/24 fiscal year, the City funded 1,711 hours of business navigation assistance.

3. Business incubator/accelerator program—funding four cohorts of an incubator/accelerator program. Comprised of educational seminars, the purpose of the

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program is to teach small business owners about core business concepts and practices including market research, budgeting, digital marketing, and financial planning. During the 2023/24 fiscal year, the City funded two cohorts benefitting 41 businesses.

4. Commercial lease assistance program—funding a commercial lease education program and individualized legal consultation from a licensed attorney. This program is currently underway.

5. Commercial electrification grant program—funding commercial electrification upgrades with the goal of improving energy efficiency and reducing greenhouse gas emissions.

The City hopes to launch the grant program this fiscal year.

6. Placemaking and Open Space Activation—funding to assist with the design and permitting of a “Taco Plaza” at 561 Peralta Ave., transforming an existing parking lot into a multifunctional outdoor public food and gathering space.

North Sacramento Economic Recovery Plan
For the Marysville-Del Paso Boulevard commercial corridor, key business assistance components include:

1. Commercial façade improvement grant program—like the Northgate Boulevard storefront improvement grant program, the City administered three rounds of a façade improvement grant program for North Sacramento. During fiscal year 2023-24, the City awarded $351,400 via 18 grants. The City anticipates awarding an additional $653,550 via 36 grants this fiscal year.

2. Direct business support—the City awarded one $125,000 low-interest loan to a Del Paso Boulevard small business last year with another $75,000 forgivable loan to another Del Paso Boulevard small business to be executed this fiscal year. Additionally, in partnership with The Pop-Up Shop, the City funded one cohort of a business incubator program for 10 startups from historically marginalized communities. Outcomes included:
a. 100% of participants graduated by attending a 12-week education course followed by a12-week period of technical assistance
b. 100% of participants created or updated a business plan c. 90% of participants had product placement in an Arden Fair Mall pop-up shop Lessons Learned
In the wake of the COVID-19 pandemic, the City has learned many lessons from the one-time infusion of federal aid. While federal and state funding was sorely needed to help small businesses recover from the negative economic impacts caused by the pandemic, the money also afforded the City the opportunity to pilot numerous small business initiatives that otherwise would not have been possible. In piloting these initiatives, four important lessons emerged.

The first lesson is the value of the business navigator model used as part of the Sacramento Inclusive Economic Development Collaborative. Staff found the navigator’s role as a trusted messenger to be extremely valuable in not only disseminating information about available business resources, but also generating referrals for technical assistance providers. One area for improvement, however, was that the City lacked real-time data on the status of technical assistance referrals. The City needed a seamless referral system where staff could play an

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active role in facilitating referrals to appropriate providers and to monitor referrals to ensure timely resolutions.

A second lesson is the need for specialized technical assistance. After analyzing technical assistance data, staff identified five areas of greatest need:

1. Access to capital

2. Accounting and bookkeeping

3. Online and web presence

4. Legal assistance

5. Government contracting
Staff learned these specific areas of need warranted more time with technical assistance providers and often necessitated the purchase of new software or equipment. For example, the City learned that many businesses need assistance with their online presence. From hosting a website to having e-commerce capability, to engaging in search engine optimization strategies, there are several low-cost tools that could significantly assist a business in boosting revenue.

The third lesson is the importance of inclusive outreach and engagement. Given the pressing circumstances posed by COVID-19, at times the City had to prioritize the expeditious deployment of resources over inclusive best practices. While the City tries to make all programming as accessible as possible, the City acknowledges adhering to an even higher standard of inclusivity, such as ensuring language accessibility and conducting targeted outreach in historically disinvested commercial corridors, should be the goal for all future small business assistance programming.

The final lesson is the importance of standard metrics across programming and consistently collecting, monitoring, and evaluating these metrics. As evidenced by the summary of COVID response investments, the City prioritized the recovery of small businesses. However, much of the metrics collected are output related instead of outcome related. This is problematic because the City is unable to truly evaluate program impact. Therefore, another goal for future small business assistance initiatives is establishing a standard set of metrics that will enable the City to take a results-based, accountable approach when assessing programs.

However, it is important to acknowledge that there are limitations to the small business assistance outcomes and impacts that the City can feasibly track. For example, business revenue growth and job creation may take years to cultivate with no reliable reporting method besides surveying. Surveying is difficult to obtain high enough response rates to ensure the findings are statistically significant. Similarly, many business owners are reluctant to share information about their business or their demographics.

Combining OIED’s small business experience with the lessons learned implementing programs and working with partners informed the creation of the proposed Small Business Assistance Center Pilot.

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Overview of Proposed Small Business
Assistance Center Pilot

Introduction
Using the lessons learned, staff is proposing the establishment of a Small Business Assistance Center (the “Center”). A two-year pilot funded primarily from ARPA Small Business and Commercial Corridor Revitalization funding and a Small Business Administration (SBA) grant, the Center will consist of six components representing a continuum of services meant to address the diverse and varied needs of Sacramento’s businesses. In addition, it connects to the other existing programs mentioned above, such as Economic Gardening, in that it aids in identifying and preparing businesses to participate in such a program. The following sections explain each component in greater detail.

Property and Business Improvement District (PBID) Assistance Leveraging the existing trust Property and Business Improvement Districts (PBIDs) have with businesses, the City is investing $1,185,000 of ARPA funding into 10 PBIDs. The investment is funding annual business walks and business engagement events as well as customized marketing, safety and cleanliness programming for each district. The largest portion of the funding is strategically dedicated hiring business navigators.

The navigators’ responsibilities include conducting door-to-door outreach, establishing rapport and cultivating relationships, disseminating relevant business information and resources, and providing first-line business assistance triage such as answering basic business questions or resolving basic business needs. The City will strive to ensure its navigators are multi-lingual, trained in cultural competency best practices, and knowledgeable about the City’s language access resources.

One of the navigators’ most important roles will be to educate businesses on the benefits of using the City’s new 311 business platform and working with them to create accounts. The 311 system will serve as the City’s small business data collection tool and allow the Center staff to triage business requests and refer them to technical assistance services, when appropriate.

Technical Assistance Program
As the City receives the 311 business requests for service, the City will facilitate referrals to an appropriate technical assistance provider and grant-funded consulting time. The technical assistance program will feature two types of providers:

1. A core technical assistance provider who possesses extensive experience as a general business support organization

2. A roster of specialized technical assistance providers who possess specific subject matter expertise

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Informed by data collected from CARES and ARPA technical assistance programs, the City identified the following categories as specific areas of specialized need:

1. Access to capital

2. Accounting and bookkeeping

3. Online and web presence

4. Lease Education

5. Government contracting
In mid-August, the City published two solicitations seeking proposals from technical assistance providers. Staff will return to Council later this fall seeking approval of the core technical assistance provider contract. The City is investing $600,000 into this component—$300,000 in ARPA Small Business funds and $300,000 in federal U.S. Small Business Administration grant funding.

Micro-Capital Programs
Microgrants
To complement the technical assistance program, the City is investing $250,000 of ARPA funds to create a small business micro-capital grant program. The microgrant program is modeled after City’s Economic Gardening program, which has seen business success by pairing technical assistance and access to capital. The microgrant program will promote small business growth and expansion by offering participants of the Center’s technical assistance program the opportunity to apply for a $2,500 to $5,000 grant to fund the implementation of strategies recommended during their consultations.

The grant program is meant to address a wide range of unique business needs. The requirements for use are as follows:

1. The use must align with recommendations identified during technical assistance consultation.

2. The use must address a legitimate business need that will improve and/or expand current business operations.

Examples of eligible uses include, but are not limited to:

1. Replacing existing business equipment that has exceeded its useful life and is essential to daily operation

2. Purchasing new business equipment and/or supplies to maximize productivity and profitability

3. Obtaining new business software/technology to improve digital optimization

4. Obtaining specialized consulting and/or services to further research and/or address a business issue
The program is structured to operate on a rolling basis with a monthly review process by City staff to occur until funds are exhausted.

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Fee Credits
A $50,000 investment of Small Business ARPA funds will be made to establish a City fee credit program. The program will provide qualifying businesses with up to $2,500 in credits towards eligible City fees including, but not limited to:

1. Al fresco outdoor dining encroachment building permit fee

2. Al fresco outdoor dining lease fee (for parking spaces and public right of way)

3. Business operations tax certificate

4. Conditional use permit

5. Entertainment permit (initial application or renewal)

6. Sign permit
Similar to the microgrant program, the fee credit program is structured to operate on a rolling basis with a frequent staff review process to occur until funds are exhausted.

Economic Data Software
A $50,000 investment of Small Business ARPA funds will pay for economic data software platforms. The online data tools will help Sacramento businesses and organizations make smarter decisions using data on market research, demographics, location information, and other business topics of interest. Small business data provider SizeUp will provide services for up to three years. Providers specializing in foot traffic data are also under consideration.

Salesforce Customer Relationship Manager (CRM)
A critical tool when implementing the Center is the Salesforce CRM. The CRM is a database that is used for the City’s 311 system. The functionality of the City’s 311 system has been expanded to include business accounts and submitting business requests for service. This means that an individual can link their 311 account to a business that they own or operate and submit requests for service for business technical assistance. City staff will have access to those requests and respond accordingly. The CRM can also generate reports and present dashboards that convey activities, and graphically convey impact. This tool is essential to evaluating the success of the Center.

Small Business Staff Services
OIED has created a team to staff the Center’s programs and services, be the primary point of contact for small businesses, and monitor and evaluate outcomes with a commitment to equitable impacts. Primarily staff will assist small businesses by:

1. Navigating City government utilizing our 311-business platform;

2. Serving as a small business advocate, providing education and resources related to business policy;

3. Providing industry expertise in the areas of childcare, nightlife, workforce, and housing;

4. Offering robust business and economic data;

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5. Facilitating referrals to technical assistance providers; and

6. Promoting resources and opportunities.

Designing for Diversity, Equity, and Inclusion
As OIED pilots the launch of the Center, reaching the target audience and evaluating the impact and success of this work is paramount. This section has been informed by past successes and lessons learned, and through recent collaboration with Sacramento Investment Without Displacement (SacIWD) to design a small and local business development and protection program that is inclusive and equitable.

Outreach and Evaluation
While outreach and evaluation are standard in OIED’s programs and services, the Center is proposing a framework that consists of proven inclusive outreach and engagement practices and a specific set of outputs, outcomes and impacts to better serve under-resourced small businesses and those in disadvantaged areas.

In the first year of the Center, monitoring and evaluating data from businesses to understand who is being served will inform future parameters. For example, eligibility requirements, funding prioritization, and the development of new programs that address emerging business needs.

Monitoring and Evaluation
The Center is proposing to collect and frequently monitor a set of outputs, outcomes and impacts to evaluate successes.

1. Outputs
Outputs Source
Number of business service requests
received

CRM
Number of cases opened/resolved/referred to
TA Partner/closed

CRM
Number of loan applications submitted

CRM, Technical Assistance Provider (TAP)
Activity Report
Amount of micro-capital grants provided ($
amount and number of businesses)

CRM/City Grants Management System
Data utilization (requests for reports, website
analytics (unique views, visitors, time spent
on page, etc.)
CRM, webpage (google) analytics
Number and attendees of webinars,
workshops, events, etc.

TAP , PBID Activity Reports
Hours of 1-1 consulting CRM, TAP Activity Reports
Number of business plans created TAP Activity Reports
Number of jobs created TAP Activity Reports
Number of new businesses CRM, TAP Activity Reports

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Number of businesses retained CRM, TAP Activity Reports Number of businesses scaled or expanded CRM, TAP Activity Reports Business owner demographic data (optional) CRM

2. Outcomes
Outcomes Source
Increase in capital secured (loans/equity)
compared to previous year
TAP Activity Reports, Survey
Increase in business revenues compared to
previous year
CRM, Survey
Increase in jobs created compared to
previous year
TAP Activity Report, Survey

3. Impacts
Impacts Source
Small businesses are aware of City
resources and services available
Survey
The available capital to small businesses is
becoming more accessible
Survey
Business owners have a better
understanding navigating the City’s
regulatory environment
Survey, CRM
Decrease in commercial corridors vacancy
rates
CoStar
Decrease in small business closures ESRI, CRM

4. Benchmarks
Benchmarks Source
Annual citywide metrics compared year over
year, such as:
 Number of businesses
 Amount of sales tax generated per
corridor/PBID
 Number of jobs from small businesses

ESRI, City Sales Tax Data, SizeUp, CRM,
TAP Activity Report, Survey

5. Annual Impact Report
 Inclusive of outputs, outcomes and impacts above
 Reports on individual grant programs
 Testimonials
As mentioned above, a critical tool in monitoring businesses is the City’s Salesforce CRM. The Salesforce CRM is designed to collect a variety of business account information e.g. demographic information, certifications, industry, longevity, etc., their requests, interactions with

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staff and service providers, and track outcomes. The CRM can generate robust reports and present unique dashboards. Utilizing this tool to assess impacts and, if necessary, modify programs to ensure equitable results.

Priority Criteria
In addition to monitoring business account information and service requests, City staff, in partnership with SacIWD, identified additional priority criteria to assess if resources are deployed to under-resourced small businesses and those in disadvantaged areas.

The Center’s current or upcoming funding programs, such as the Microgrants or Fee Credits, will use the priority criteria to evaluate decisions based on the 10-point rubric below.

Priority Criteria Preference Points
Qualifies as a small business as defined by the California Department of General Services
1 Qualifies as a micro business as defined by the California Department of General Services
1 Operates out of a brick-and-mortar location 1
Operates at an address that is zoned commercial as defined by the Sacramento County Parcel Viewer
1 Operates at an address that qualifies as a 2023/2024 U.S.

Department of Housing and Urban Development Qualified Census Tract
1 Operates at an address that qualifies as a Sacramento Promise Zone
1 Operates at an address that qualifies as an SB 535 Disadvantaged Community
1 Operates at an address with a CalEnviroScreen 4.0 pollution burden score of 60 or more
1 Operates at an address with a CalEnviroScreen 4.0 linguistic isolation score of 50 or more
1 Operates at an address with a CalEnviroScreen 4.0 housing burden score of 60 or more
1

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Since some census tracts are too small to have scores in all priority criteria categories, the City will total the points and divide by the number of available priority criteria categories to obtain a percent.

Unless facing a hardship or extenuating circumstance, applicants earning less than 60% will not be recommended for funding. The City reserves the right to determine what constitutes a hardship or extenuating circumstance at its sole discretion.

Inclusive Outreach and Engagement
The Center will utilize the following proven practices to engage small businesses.

1. Utilizing Community Engagement Team Resources
a. Communications Toolkit
b. Community Ambassadors
c. Community Calendar
d. Ethnic Media Outlets
e. Social Media
f. Events (City connect and tabling opportunities)

2. Utilize City Communications Channels
a. City Express
b. City Minute
c. Press Release
d. Media Advisory

3. Create Inclusive Outreach Collateral
a. Culturally appropriate
b. Language accessibility - As practicable, provide interpreters in these languages at any City-organized event
c. Mailer of postcard/flyer to target audience

4. Host regular office hours, virtually or in-person (location depending on need)

5. Activate Partnership Network
a. Attend meetings to share resources and collect feedback b. Ask to amplify City resources through their communications channels c. Conduct Corridor Business Walks
d. Provide regular briefings on Services and Resources
Sustainability and Expert Evaluator
Hire an evaluation consultant to monitor year 1 progress, assess program impact, and structure a monitoring and evaluation program for year 2 that aligns with potential funding opportunities.

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The Center programs are funded for two-years, with one-time funding, and therefore OIED is forward thinking about utilizing resources that will provide a return on investment and potential success when securing future funding. Opportunities for future fundings include, but not limited to:

1. Potential Federal, State, Local and Philanthropic Funding Sources a) HUD (CDBG funding)
b) US Economic Development Administration
c) Small Business Administration
d) CA Department of General Services
e) Governor’s Office of Business and Economic Development (IBank, OSBA) f) Cities for Financial Empowerment
g) Robert Wood Johnson Foundation
h) Kauffman Foundation
i) Kresge Foundation
Feasibility Study of Potential Programs
SacIWD has called out three specific programs that support an inclusive and equitable small business economy. At this stage, OIED is proposing funding a feasibility study to understand how they could be executed in Sacramento, the resources it would take, and its potential impact. The programs are:

1. A legacy business preservation program— a program to support, recognize, and preserve small businesses that have been operating for many years and contribute to a neighborhood’s vitality;

2. A heritage tourism program— a program to attract visitors to places and activities that authentically represent a neighborhood’s history, identity, and culture; and

3. A social enterprise incubator program—a program to support the creation of or transformation into a cooperative, B-corporation, Employee Stock Ownership Plans (ESOP), employee-owned business, etc.

Once studied, OIED would seek to secure funding and implement at least one pilot program based on the recommendations of the feasibility study. At that point, staff plans to inform Council of the study, preliminary results from the Center’s programs and services, and outline next steps.

RESOLUTION NO. 2024-

Adopted by the Sacramento City Council

October 29, 2024

ARPA Framework and Funding Priorities: Approve the Establishment of a Small Business Assistance Center Pilot

BACKGROUND

A. On March 4, 2020, Governor Newsom proclaimed a State of Emergency as a result of the threat of the coronavirus disease (COVID-19) in the State of California.

B. On March 5, 2020, the County of Sacramento proclaimed a public health emergency as a result of the threat of COVID-19 (pandemic) in the county.

C. On March 13, 2020, the Sacramento City Council adopted a resolution declaring a local emergency relating to the pandemic.

D. On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed into law making available $350 billion through the State and Local Fiscal Recovery Funds (SLFRF) to assist states, tribal governments, and local governments with the reopening and recovery from the adverse health and economic impacts caused by COVID-19. The City of Sacramento became eligible for $112.2 million.

E. On August 24, 2021, the City Council held a workshop to discuss the Mayor’s proposed ARPA Framework and Funding Priorities. During the workshop, the City Council and stakeholders expressed overall interest in funding programs and projects in the following areas: Small Business and Commercial Corridor Revitalization; Homeless and Housing; Youth, Workforce Training and Gang Prevention; Arts and the Creative Economy; and Valuing City Employees and Addressing Organizational Needs.

F. On September 14, 2021, the City Council adopted the Mayor’s proposed ARPA Framework and Funding Priorities and directed the City Manager, City Attorney, City Auditor, City Treasurer, and City Clerk to implement City Council direction consistent with the adopted ARPA Framework. (Motion No. 2021-0257)

G. On October 19, 2021, the City Council adopted Resolution No. 2021-0313, which authorized the City Manager or the City Manager’s designee to accept $112.2 million of ARPA funding, establish the ARPA Reinvestment Fund (Fund 1003), allocate $112.2 million of ARPA funds to provide government services, and budget the resulting available resources in the ARPA Reinvestment Fund to assist with recovery and reopening efforts.

H. Of the $112 million received, the City committed over $28 million to commercial corridor revitalization and small business support.

I. The Small Business Assistance Center is the evolution of the initial ARPA-funded small business programing and adjusts strategies to promote economic recovery and growth.

J. Simultaneous to designing the Center, staff began engaging with Sacramento Investment Without Displacement (SacIWD) to satisfy a settlement agreement provision that required the City to work with SacIWD to develop “a small and local business protection and development program for Council consideration.” During discussions, both groups agreed that it would be advantageous to utilize the Center as the foundation for a small/local business protection and development program.

K. Since then, staff and SacIWD have worked collaboratively to examine the Center and recommend enhancements that would not only improve programming, but also advance diversity, equity, and inclusion goals consistent with the City’s Inclusive Economic Development Investment Strategy.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The City’s Office of Innovation and Economic Development’s work with the Sacramento Investment Without Displacement (SacIWD) to develop a Small Business Assistance Center Pilot to be funded by ARPA funds for the City Council’s consideration satisfies term 3.a.ix. of the Settlement Agreement between the City of Sacramento, SacIWD, and the Regents of the University of California.

Section 2. The City Council hereby establishes the Small Business Assistance Center Pilot (the “Pilot”) described in Attachment 1.

Section 3. The City Manager or the City Manager’s designee is authorized to negotiate and execute an agreement with an evaluation and feasibility consultant(s) for the Pilot in an amount not-to-exceed $100,000. The consultant(s) will be responsible for monitoring the first year’s progress and structuring a long-term evaluation plan for small business assistance programming. The consultant(s) will also research the feasibility of creating and implementing a legacy business program, heritage tourism program, and social enterprise incubator as future components of the Small Business Assistance Center Pilot.

Section 4. The City Manager or the City Manager’s designee is authorized to reallocate unspent funds within the ARPA Inclusive Business MYOP (I02612040) to the ARPA Small Business Priorities MYOP (I02612000) in support of the Small Business Assistance Center Pilot.

Attachment 1: Small Business Assistance Center Pilot Description

The Small Business Assistance Center is the evolution of the initial ARPA-funded small business programing and adjusts strategies to promote economic recovery and growth. The Center is designed to be a two-year pilot funded by unspent ARPA funds with key components including:

Microgrants Offers qualifying small businesses who participate in the City’s technical assistance program access to micro-grants between $2,500-$5,000
Fee Credits Offers qualifying small businesses up to $2,500 in credits for eligible City fees
Economic Data Software Procures an economic data software platform to better address small business needs via a publicly available tool that will offer insightful market, industry, and location data Salesforce Customer
Relationship Management
(CRM) System
A database linked to 311 that is used to track businesses and their technical assistance service requests. The CRM can generate robust reports on the Center’s activities and impact. This tool is critical to evaluating the success of the Center and the small businesses that take advantage of it.

Dedicated OIED Staff Assigned
as Members of the Small
Business Assistance Team
Assigned staff will be the primary points of contact for small businesses. The team will be responsible for managing the Center’s programs and services as well as evaluating
outcomes and impacts of the pilot.

To ensure diversity, equity, and inclusion goals are embedded within the implementation of the Small Business Assistance Center Pilot, the City is further committing to the following:

1. Create a standardized monitoring and evaluation program that tracks a standard set of metrics over two years and iterates along the way to ensure equitable results.

2. Adopt a proven inclusive outreach and engagement practices that are intended to ensure businesses that are most in need are aware and utilizing the Center’s services and programs.

3. Prepare an annual impact report to share impact results, areas for improvement, business testimonials and more.

4. Hire an evaluation consultant to monitor year 1 progress, assess program impact, and structure a monitoring and evaluation program for year 2 that aligns with potential funding opportunities.

5. Hire a feasibility consultant to research the following ideas for future Center components:
a. Legacy Business Program—a program to support, recognize, and preserve small businesses that have been operating for many years and contribute to a neighborhood’s vitality;
b. Heritage Tourism Program—a program to attract visitors to places and activities that authentically represent a neighborhood’s history, identity, and culture; and c. Social Enterprise Incubator Program—a program to support the creation of or transformation into a cooperative, B-corporation, Employee Stock Ownership Plan (ESOP), employee-owned business, etc.).

Sacramento City CouncilOctober 29, 2024

Sacramento City Council
October 29, 2024