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Calexico’s New COVID Business Loan Initiative to Begin Sept. 21

Calexico begins taking applications on Sept. 21 for its new COVID-19 Business Loan Stabilization Program approved last week and intended to be “forgivable” for the city’s micro businesses and smaller merchants, the city manager said recently.

Miguel Figueroa, Calexico City Manager | FILE PHOTO

Built on many smaller-market businesses in the downtown and elsewhere in the city that depend on foot traffic and patrons from south of the border, COVID-19 has had a dramatic effect on the border community, City Manager Miguel Figueroa indicated during the Sept. 16 Calexico City Council meeting in which the loan program was approved by the council.

“I want us to understand that the city of Calexico and its business community is different even from the other communities in the county,” he said.


Funded with $150,000 of federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) funding the city received in early July, even before the program came up for a vote on Sept. 16 to the council, city staff had built up its application process and guidelines and had the city’s website updated to include the program, issuing a press release to the community within a day of the council’s unanimous approval.

“We know the business community has been waiting and is in dire need of this money,” Figueroa said the night of the council meeting. “We wanted to move fast.”

In fact, two COVID-related emergency programs were approved that night, with the council approving 5-0 in both cases expending a total of $320,000 in funding. The second program was aimed at low-income residents to provide up to three months’ worth of utility payment relief.

Following a night where longtime Santo Tomas Swap Meet vendor representative and frequent city critic Alberto Arvizu accused the members of the council and city staff during public comment of causing hundreds of vendors to suffer (pre-pandemic) due to the city forcing Santo Tomas owners to close the swap meet in June 2019 after dozens of code violations made keeping the outdoor marketplace open impossible, council member Bill Hodge called such statements that the city “doesn’t care” erroneous.

Hodge said the loan stabilization program and related utility assistance programs “prove City Council and city staff care for this community.”


“Here is the city stepping in at an unfortunate time in the COVID-19 pandemic,” Hodge said, the only council member to say anything. “I hope the citizens watching this meeting will acknowledge City Council does care about the community … It really does.

“These two items exemplify that tonight,” he added.

Figueroa explained the city intended to create and get this program going as soon as the city received its initial CARES Act payment of more then $504,500 on July 9.

He said the city made certain that the general fund was made whole through utilizing the majority of the funding, but that $150,000 be used for what he said he and staff envisioned as being a 100 percent “forgivable” program that small businesses would not have to pay back as long as they did two things — maintained staffing levels to pre-pandemic levels (late March) or used some of the funding to rehire.

The $150,000 in funding is capped at up to $7,500 per loan for up to 20 loans, possibly more depending on the amount of money utilized per loan, he said.

Calexico Council to Consider a Pair of New COVID Loan Initiatives
Downtown Calexico is shown several days into the complete shutdown that occurred in late March due to the outbreak of COVID-19 in Imperial County. Downtown streets and sidewalks were nearly empty as businesses were closed and cross-border traffic all but halted when the first federal travel advisories were instated. | CORISSA IBARRA PHOTO

District 1 (Calexico-area) Imperial County Supervisor Jesus Escobar was on hand to inform city staff that the county recently dedicated a second round of CARES Act funding to its own countywide Business Loan Stabilization Program, seeding it initially with $500,000 and then, some weeks past, approving a second infusion of $500,000. Escobar said, so far, the county has dedicated about $900,000 of the funds to dozens of Imperial Valley businesses.

Escobar advised that the city should avoid any sniff of “nepotism” or perceived impropriety by making certain no one related to any city staff member receive any loan funding.

Calexico council member Camilo Garcia agreed in theory.

“There has to be some firewall, but we can’t leave someone out,” Garcia said, due to perceptions of nepotism.

For-profit businesses and non-profits alike will be eligible to apply for a single loan as long as the merchant, business owner or nonprofit operator possesses a valid city business license. Figueroa said funds can be pretty much used to cover anything they desire.

Short-term working capital needs, such as payroll costs, rent, routine real estate and equipment financing payments, utilities, or losses due to “destabilizing events” related to COVID are some of the named uses in a report to council prepared by city contract planner Christopher Velasco.

The funds will be available until they are exhausted, according to the report, and applicants must have had a physical establishment in Calexico in operation as of Dec. 31, 2019. The funds must be used by Dec. 31, 2020.

Applicants must also have a demonstrated hardship due to COVID-19, such as loss in revenue, and the businesses must be in “good standing” with the city, including being current on utility bills, have no liens or judgments, according to Velasco’s report.

“The applicant would be eligible for a forgiveness clause should the entity prove that it has maintained or hired back the previous workforce. The forgiveness clause would be triggered by the decrease before and after employment numbers, with a 20 percent decrease in the forgiveness amount per one full-time employee lost,” according to the report to council.

An example is, according to Velasco, “if a business laid off five employees or more and after the six-month anniversary, and these full-time employees had not been hired back or replaced, the entire loan amount would need to be paid back (20 percent decrease in forgiveness per job lost). If a full-time employee has not been hired back/replaced, the entire loan amount would need to be paid back (20 percent decrease in forgiveness per job lost).”

The city determines the total number of employees of a business on a full-time employee basis, according to the report. A full-time employee is one who works 40 hours per week. For example, one employee who works 40 hours per week equals one full-time employee; if a business has four part-time employees who work a total of 10 hours per week, those employees equal one full-time equivalent employee.

Separately, the council approved subsistence payment options and subsistence payment guidelines for assistance with utility payments, according to a second report by Velasco. This program is geared toward residents.

On Aug. 26, the council held a public hearing tied to the funding of the utility assistance program, which also utilizes COVID-19 emergency funding that comes from the $2.2 trillion federal CARES Act economic stimulus package, but the funding mechanism is through the state Community and Housing Development Department’s state Community Development Block Grant Program. The state had made available $19,331,740 for this program.

Calexico was awarded $170,998 in state CDBG COVID funding.

Utility assistance for up to three months is for water, electricity and gas, Figueroa said. He added there would be a limit of up to $700 for electricity assistance and $300 each for water and gas payment assistance. Figueroa added that qualifying Calexico residents would be eligible for all three levels.

The utility program does have a more complicated structure than the business stabilization program. The utility payments will be based on income verification and break down along numbers of those living in a household and income category from “extremely low income” to “moderate income,” according to Velasco’s report.

“Utility bills must be dated after the national emergency declaration date of March 13, 2020, by the United States government,” the report explained.

Figueroa added that “we’re following CDBG’s income limits.”

Both programs are just part of how the city is attempting to help its business community as it emerges from the darkness of the pandemic.

“On top of these items, we, as an administration, after checking with the mayor and council, are looking at assisting the business community with an additional campaign,” Figueroa said, that involves hosting videos on the city’s website showcasing what the city’s merchants and businesses have to offer as they begin to reopen.

“We want to make sire we give them that extra push as they begin to reopen,” Figueroa added.


Calexico Business Loan Stabilization Program guidelines and applications

On the Web: https://www.calexico.ca.gov/index.asp?SEC=3B66A8C2-199F-4EBF-B6A5-B5AB1412AEC8

Calexico Council to Consider a Pair of New COVID Loan Initiatives