CLEVELAND HEIGHTS, Ohio -- As the ongoing global pandemic continues to threaten livelihoods and mar the bottom lines of businesses, the city has some welcome news on the economic front -- including an upgrade to its bond rating.
For starters, the Cleveland Heights Small Business Relief Grant Program, made possible by the federal Coronavirus Aid, Relief and Economic Security (CARES) Act and allocated by the city, was set to go live at 10 a.m. Tuesday (Nov. 10).
“For those impacted by the COVID-19 pandemic, the city is making funding available -- in the form of grants good for up to $3,000 -- for eligible small businesses with a brick-and-mortar location in Cleveland Heights with 25 or fewer employees,” local officials announced on Friday (Nov. 6).
City Economic Development Director Tim Boland said that Cleveland Heights business owners are encouraged to complete the application as soon as possible, since funds are limited.
“Cleveland Heights City Council understands the pressures on our small businesses,” Mayor Jason Stein said. “We completely support the allocation of CARES Act funds to this program to help support our small businesses to get through these difficult times.”
A total of $300,000 is available, which means up to 100 businesses could qualify for the maximum allotment; more if the individual amounts are less, city Business Development Manager Brian Anderson noted.
“I wish it were more,” Acting City Manager Susanna Niermann O’Neil said of the amount, with Anderson pointing out that, at least prior to the pandemic, there were about 500 total businesses in Cleveland Heights.
Eligible costs incurred between March 22, 2020, and the date on the application will include:
-- Mortgage or rent payments for business premises
-- Utility payments for business premises
-- Personal protective equipment acquired to protect employees and customers
-- Expenses incurred to provide physical barriers or promote social distancing
Applications will be processed and approved on a first-come, first-served basis, provided the business meets the eligibility criteria and submits all the required documentation.
That includes qualifying COVID-19 expenses incurred, loss of revenue or increased costs as a result of the pandemic, as well as the business' most recently filed state or federal tax return.
As part of the application process, businesses will be required to submit a W9 form in order to receive a payment, with an available link to a blank W9 form that can be completed ahead of time and uploaded once the application opens.
For more information regarding the program and the online application form (when it becomes available at 10 a.m. Nov. 10), visit www.clevelandheights.com/covidgrants.
Questions regarding the program should be referred to Anderson at 216-906-0875 or banderson@clvhts.com.
Bond rating upgrade
Meanwhile, Moody’s Investors Service announced Nov. 4 that it was upgrading the city’s credit rating from “A1” to an “Aa3.” The same goes for the new issue of 2020 General Obligation (Limited Tax) Various Purpose Improvement Refunding Bonds, also assigned an “Aa3” rating.
As Moody’s rationale, the major investment brokerage house explained in a press release that both ratings were upgraded because “the city’s (cash) reserve position has significantly improved and will likely remain strong given the city’s track record of good budget management.”
O’Neil told City Council last month that, having accumulated over $9 million in cash reserve since 2013 -- when former City Manager Tanisha Briley arrived to find a little over $1 million, less than one two-week payroll -- Moody’s representatives advised against borrowing from that and possibly damaging the city’s bond rating.
From there, “the coronavirus pandemic has not materially impacted the city’s credit,” Moody officials stated. “(City) management expects to end fiscal 2020 with balanced operations even after a material decline in income tax revenue.”
Taking advantage of low interest rates, City Council voted on Oct. 19 to restructure about $13 million in existing municipal bond debt.
The Moody press release goes on to say that the city’s tax base is “moderately sized with average resident wealth and income. While the city’s debt burden is modest, its pension burden is high because of its participation in three statewide cost-sharing plans.”
Listed in the press release as “factors that could lead to an upgrade of the ratings,” Moody’s cites “substantial tax base growth and improved resident income levels,” as well as “reduced debt and pension burdens.”
As for a potential downgrade in the bond rating, Moody’s went on to mention “material declines in cash and fund balance,” along with “substantial declines in tax base and resident income levels.”
Councilwoman Melody Joy Hart, who chairs the Finance Committee, said she was proud of the city’s upgrade, adding that the strong rating reflects several things: a healthy fund balance, economic development activities, and "confidence in our financial management and stability.
“This is good news for the city and positions us to better weather economic uncertainties like those associated with the pandemic, and to continue to strengthen our community into the future,” Hart added, also commending the efforts of the city’s new finance director, Amy Himmelein, who started in April.
Small Business Saturday
City Council has also officially declared Nov. 28 as Small Business Saturday, urging residents to support local merchants and buy local.
“To celebrate the city’s small businesses and the vital contributions they make to our community in creating jobs, boosting our local economy and preserving our neighborhoods, public and private organizations across the country have endorsed the Saturday after Thanksgiving as ‘Small Business Saturday,’” the Nov. 2 council resolution states in part.
The legislation goes on to note that small businesses make up more than 47 percent of private-sector employees in the U.S. and that their continued health depends upon the ongoing support of the community.
With that in mind, “Cleveland Heights City Council invites residents and visitors to shop locally on Nov. 28 to support small businesses and merchants as part of Small Business Saturday and through the year.”
Source: https://www.cleveland.com/community/2020/11/cleveland-heights-announces-covid-19-small-business-grant-program-plus-a-bond-upgrade.html