A plan for indoor restaurants and out-of-state visitors could come by Friday
Governor Scott answers a question during his press briefing Wednesday, as Public Safety Commissioner Michael Schirling and Human Services Secretary Mike Smith, with masks, listen, as an American Sign Language interpreter offers support. ORCA Media video screen grab.
by Timothy McQuiston, Vermont Business Magazine
Vermont businesses and nonprofits on the brink of bankruptcy got a bit of good news today as Governor Scott, the Speaker’s office and the Senate President Pro Tem saying they expected the $400 million financial aid package to be passed by the end of June, if not sooner. Lawmakers could release some emergency funds ahead of the rest.
The massive, by Vermont standards, plan would provide emergency funds to the hardest hit industries and then help shore up other businesses and organizations moving forward.
The health care mitigations efforts, like closing restaurants, and the resultant economic fallout, as seen by the decimation of the dairy industry, would be two industries to receive the first of the emergency funds.
The money comes from the federal CARES Act federal stimulus.
Vermont received $1.25 billion. While this was the lowest amount provided to any state because of Vermont’s size, it is relatively high when judged per capita.
Restaurants were among the first businesses required to close in mid-March as the COVID-19 pandemic closed in on Vermont.
Scott noted at his press briefing today that closing the bars and restaurants before St Patrick’s Day was particularly hard on that industry.
And they aren’t back yet.
Indoor bar service remains closed for the foreseeable future. However, the governor said he expects to announce a reopening plan for indoor restaurant service Friday. He said this will come with the type of guidance we’ve become used to: Spaced out tables, limited capacity seating, and other measures to ensure safety.
Scott reiterated that while the economy has suffered, his first order of business is keeping Vermonters safe.
He acknowledged that some businesses will never come back, either because of the mitigation efforts or from the “new normal” of how some businesses that need close contact service will no longer be viable.
He added that while the metaphorical “spigot” he’s been turning in order to restart the economy is likely to be turned on for every type of industry, the “waterflow” will probably be reduced. As in, maintaining capacity limits will naturally lead to reduced commerce.
“I don’t think we can open the spigot all the way,” he said.
The search for a vaccine, which is widely considered possible, still has a long way to go, he acknowledged, but perhaps by 2021 we will be back to some sort of normalcy, or “new” normalcy.
Some events certainly will not return this year. For instance, Scott has canceled the summer’s county fairs. Even the annual flower show scheduled for February 2021 has decided to wait nearly two years until 2022.
Scott and Health Commissioner Mark Levine, MD, said they anticipate that even if there is a second wave of the novel coronavirus, the state will not have to close down as it did under the “Stay Home, Stay Safe” order from March because the state is much better prepared.
For instance, Dr Levine said, at the beginning of the COVID crisis, the state had no tests and little in the way of personal protective equipment.
Since then the state has been able to acquire equipment for testing and tracing and PPE. The pop-up emergency hospitals set up at places like the Champlain Fairgrounds have been stored away and available if needed again.
The state has been stockpiling medical supplies and has a sophisticated plan in place and learned much from this process, Dr Levine said.
He said the state is much better able to “box-in” a future wave of COVID-19 with the containment, isolation, testing and tracing protocols now in place.
Also encouraging for businesses is a plan by the governor to allow out-of-state visitors into the state without quarantining. He said he hopes to have further guidance on this also on Friday.
Scott added that this new plan could be regionalized, in that visitors from COVID-quieter places like the North Country of New York, New Hampshire and Maine could be allowed in first.
Without offering detail, he said this plan could include a “reciprocity agreement” with other states in order for the states to allow for visitors back and forth.
In a new development, the governor also said that he might regionalize the restart of the Vermont economy within the state itself.
For instance, it’s been several weeks since there was a new case in Franklin County.
Previously the governor has stated that he would prefer a blanket order across the state. First, it would be hard to keep people from an area with a cluster of new cases (which Winooski is now experiencing) from going to a restaurant in St Albans. Second, he does not want to create an us-versus-them division.
Scott said his economic team is looking at plans on how to do that and if it is even possible.
As for the $400 million Economic Recovery and Relief Package, Scott said his legislative team has been working with the Legislature on moving it through the process as soon as possible.
He said he hopes to have the completed bill back in a couple of weeks.
Katherine Levasseur, chief of staff for Speaker Mitzi Johnson, told VBM that she expects the House Appropriations will have the recommendations from the policy committees next Wednesday, June 10. She said the bill will get through the Legislature before they recess at the end of June.
On the Senate side, Tim Ashe, Senate President Pro Tem, said he could see a two-step process to hasten the distribution of emergency funds: "I think we’d like to get some of the grant money for businesses out quickly while working on the rest (of the package by the end of June)."
The governor was asked at the press briefing why he didn’t sidestep the Legislature – thereby saving time -- and begin issuing the financial aid once he had the plan in place.
He acknowledged that some other governors had done so with their CARES money, but he said two things.
One, he wanted the Legislature on board as a show of unity. And, two, the Legislature, with a veto proof majority could have acted to block his plans.
See details of the governor’s emergency relief package below.
The Legislature will return in August to complete its business and complete the full-year fiscal year 21 budget. In the meantime, the elected officials will put together a spending package (called a “skinny budget”) for the first three months of the FY, which begins July 1.
Speaking of the Legislature, an ongoing bit of politicking has involved mail-in ballots.
Because of the health emergency the Legislature had directed the Secretary of State Condos and Governor Scott to come up with a plan in case in-person elections were not possible because of the health crisis.
Condos and Scott ultimately could not see eye-to-eye on when a decision had to be made. Scott said a final decision did not have to be made until after the primary in August. At that time, the health crisis possibly could be diminished and in-person voting in November could be possible.
Condos said the town clerks and everyone else involved needed clarity now and wanted a plan advanced right away.
Under either plan the ballots (which are already planned for the primary) would be mailed to every registered voter statewide after the primary to allow for voting for the general election in November.
Scott and Condos could not agree and the governor has washed his hands of the process.
The Legislature is in the process of removing the governor from the process.
“I’m OK with being taken out of the equation and it looks like they’ve done so,” Scott said of lawmakers.
VERMONT ECONOMIC RECOVERY AND RELIEF PACKAGE
On May 20, Governor Phil Scott announced his proposal for a $400 million economic relief and recovery package, using funds from the $1.25 billion the state received from the Federal CARES Act.
The two-phase proposal will start with $310 million for immediate relief to the most impacted sectors and businesses to be followed by $90 million for long-term recovery efforts.
The Agency of Commerce and Community Development and the governor will work with the Legislature towards passage of this historic relief package.
The Phase 1 relief package will involve four areas of distinct action to support businesses and Vermonters as they resume their operations.
- Financial assistance: Emergency Action Grants for food and accommodation services, retail, and agriculture, Vermont Economic Injury Disaster Loan and Grant program, and small business focused Vermont Restart loans and grants. ($250MM)
- Housing assistance: Rental Housing Stabilization Fund for property owners and a Re-Housing Recovery Fund to address homeless need. ($50MM)
- Technical assistance: Restart Vermont Recovery Guides created through a network of business and community assistance providers, and Employee Assistance Program to support the mental health and wellbeing of business owners and their families. ($5MM)
- Marketing support: Promotional marketing campaign to promote Vermont to Vermonters and deliver a toolkit of creative assets to be used by local communities, and regional marketing and consumer stimulus grants to encourage local spending, with implementation strategies to be proposed by local entities. ($5MM)
PHASE 1 PROGRAM $310 MILLION
Restart Vermont Emergency Action Grants $150 million
Who is in need: Food and accommodation services, retail and agriculture businesses that were severely impacted by closure or business disruption.
What will be done: Provide cash disbursement to individual businesses in the most vulnerable sectors. Funding will be directed to lodging, restaurant, retail and agriculture businesses that have been closed or lost significant revenue and are struggling to meet fixed costs. Funding will help prevent wide-scale foreclosures, bankruptcies and deterioration of the sectors and the communities in which they operate. These vulnerable sectors were among the first to close and may be the last to reopen. They require help to pay fixed costs that existing federal programs and state programs have not addressed. Grant proceeds may be used for rent, mortgage interest payments, utilities, inventory, and other essential operating expenses. Designed as a payment to operators based on a formula utilizing their last three years of revenue.
How will program be administered: Businesses will file an online form with the Tax Department demonstrating impact and need. The Tax Department will distribute payments to restaurant, lodging and retail operations based on meals, rooms and retail tax history to businesses with a gross annual revenue of $2.5 million or less. Businesses that can demonstrate need will be eligible for a grant based on their gross revenue and estimated fixed costs. The Agency of Agriculture will disburse agriculture and value-added food operation payments based on Agency of Agriculture funding distribution plan.
Vermont Economic Injury Disaster Loan and Grant Program $80 million
Who is in need: Businesses and non-profit organizations that closed or had significant revenue drops due to COVID-19, including, but not limited to, personal services businesses, manufacturers and creative economy businesses.
What will be done: The Vermont Economic Development Authority will utilize funding to provide existing borrowers impacted by COVID-19 with interest and principal relief and create a new loan and grant program designed to help businesses address fixed costs with which existing federal and state programs have been unable to help. VEDA will offer loans of up to $150,000 amortized up to 20 years with deferred interest for 12 months and a 2 percent interest rate in year two. Applicants will be eligible for a grant that may be used to cover three months of fixed costs incurred during closure or partial shutdown due to COVID-19.
How will program be administered: The State will grant VEDA $80 million. VEDA will use its loan application process to vet and approve applicants.
Vermont Restart Loan and Grant Program $20 million
Who is in need: Sole entrepreneurs, microbusinesses and other small businesses with annual gross revenue of less than $1 million and fewer than 5 full-time employees impacted by COVID-19 closures or partial shut-downs.
What will be done: Funding will be used to backstop loans, provide interest rate buy downs to loans made by non-profit lenders, and provide grants to businesses and non-profits impacted by COVID-19. Businesses and non-profits may apply for loans of up to $20,000 at zero percent for five years and grants of $15,000 (or three months of fixed costs, whichever is less) through the non-profit lenders. The grant and loan proceeds may be used for the restart of business operations. Organizations must take a loan to receive a grant.
How will program be administered: The state’s non-profit and municipal lenders will accept a common loan and grant application. They will utilize approximately $15 million in existing available capital to make loans. $5 million of the funding will be granted to the Vermont Community Loan Fund to provide loan loss reserves. $15 million will be granted to non-profit lenders to enable them to make up to $15,000 subgrants to businesses and non-profits approved for a loan.
Rental Housing Stabilization Fund $42 million
Who is in need: Landlords and Tenants
Due to COVID-19 response, many tenants have seen the loss or reduction of income and are unable or struggling to pay rent. Consequently, landlords across the state are not receiving full rental payments necessary to cover the costs of building ownership and upkeep.
What will be done: Provide direct financial assistance to stabilize the rental housing industry and prevent tenants from experiencing eviction and possible homelessness.
The program will provide up to 3 months of emergency rental assistance and rental arrearage payments to property owners suffering from non-payment of rent to eliminate rental arrearages and ensure tenants maintain their current housing. Payments will be limited to a maximum of 20 rental units per property owner. At proposed funding levels it is anticipated this program can assist approximately 15% of the rental housing stock.
How will program be administered: Payments will be disbursed through housing service provider(s) selected through the RFP process with oversight authority through the Department of Housing and Community Development.
Re-housing Recovery Fund $8 million
Who is in need: Families and individuals experiencing homelessness and owners of existing, substandard housing stock.
Service providers throughout Vermont have done an incredible job interrupting homelessness and providing non-congregate shelter during the COVID-19 outbreak. To continue this necessary step in maintaining public health, additional units will need to be quickly made available. Simultaneously, there exist numerous potential rental units throughout the state that remain in a substandard condition due to a lack of resources to bring units up to minimal rental housing health code.
What will be done: Provide emergency housing rehabilitation grants and forgivable loans to make up to 250 units of housing available to re-house families and individuals experiencing homelessness during the COVID-19 outbreak.
How the program will be administered: Grants and forgivable loans will be disbursed by housing service provider(s) selected through an RFP process with oversight authority through the Department of Housing and Community Development.
Restart Vermont Recovery Guides $4.75 million
Who is in need: Those businesses and organizations that have been most damaged by the closures and are at limited capacity upon reopening. In some cases, it will be businesses which have received government assistance and need to understand the best way to utilize the funds.
What will be done: Deliver appropriate level of professional assistance to businesses to enable them to re-emerge from the crisis in a viable way.
How will it work: ACCD will issue an RFP to service providers who will submit information on their qualifications including but not limited to:
• Operational expertise: Their ability to help modernize some of the current operating practices of businesses.
• Digital Strategy: How could the retailers establish a more robust and competitive online presence?
• Architecture: Physical Space design for optimal flow: How could restaurants adjust their model and space to accommodate more takeout and less seating? Space for meal preparation, assist with food delivery logistics, assist manufacturers who are reconfiguring operations to produce PPE, accommodation of safety measures.
• Technology or software consultancy: How could agricultural producers utilize technology to help solve problems? Same for manufacturing and others.
• Legal and/or Turnaround Experience/Advice: How to restructure debt for a business. What is the prioritization of their payables? If they need to unwind the business what is the most orderly methodology?
This work is crucial for businesses to survive. Even with government support they will need to shift business models and professional assistance can help them do that. In addition, the Recovery Guides could offer business and financial planning as well as grant and loan writing support.
Wellbeing for Small Businesses Employee Assistance Program $250K
Who is in need: Vermont employers and their employees.
The State of Vermont’s “Invest EAP Centers for Wellbeing ” is an employee assistance program based in the Division of Vocational Rehabilitation, which provides important services to support the health and wellbeing of the Vermont workforce at over 250 businesses that elect to pay for this service. The EAP provides counseling, resources, and referrals to help employees at these companies with issues such as depression, anxiety, PTSD, workplace issues, family and relationship issues, legal problems, substance issues, elder care, and childcare. For $250,000, the Wellbeing for Small Businesses Employee Assistance Program (EAP) can extend services to businesses with 50 or fewer employees over three months.
What will be done: Wellbeing for Small Business, would be made available to support both small business owners and their employees. EAP services are provided by a team of highly skilled, licensed mental health counselors located throughout the state, all of whom currently provide services through videoconferencing.
The program would offer two access points: one for business owners and the other for their employees. This will enable the EAP’s management consultation staff to receive initial calls from business owners who may have resource questions in addition to seeking counseling support. Employees would be directly referred to counseling staff.
Who is in need: All Vermont Communities
The tourism and hospitality sector, including lodging, restaurants and cultural attractions, has been one of the hardest hit by COVID-19. With travel restrictions, mandatory closures, bans on large gatherings and uncertainty on when out-of-state visitors will be welcome again, the industry has been brought to a complete halt and will be negatively affected for perhaps the longest of any other sector. Tourism is critical to rebuilding local economies and the fabric of community life Vermont residents enjoy.
Restart. Respect. Rediscover. Promotional Marketing Campaign $1.25 million
What will be done: A promotional marketing campaign, first directed at Vermonters, will encourage in-state travel, recreation and local spending by inviting residents to rediscover Vermont. Consumer spending throughout the state will provide an immediate boost to restaurants, downtowns, and tourism properties, directly support communities and small businesses and generate tax revenue. The campaign would revolve around the themes of respecting each other, renewing our relationship with our community, and rediscovering what our local regions have to offer as the economy reopens.
How will program be administered: The Department of Tourism and Marketing will manage the statewide promotional campaign and provide access to a marketing toolkit of creative assets for communities, organizations and individuals to utilize so we can speak with a unified voice.
Regional Marketing and Consumer Stimulus Grants $3.75 million
What will be done: Stimulus grant funding for regional destination marketing organizations, including chambers of commerce and downtown organizations, to encourage consumer spending in local communities. Funding would be made available for marketing or incentive programs to be determined by each region to best fit that area’s needs. Each program will encourage Vermonters to direct spending to local businesses, such as through buy-local challenges, loyalty affinity or gift card programs, incentives to local businesses (lodging, restaurants, retail, etc.) to create discounted packages or opportunities for Vermonters, or direct outreach and marketing.
How will program be administered: Grant funds to be disbursed by the Department of Tourism and Marketing. Through an RFP process, we would encourage each region to apply for funding through one organization that works in collaboration with others (chambers, downtown organizations, business leaders, etc.).
For additional detail on this relief and recovery package, visit https://accd.vermont.gov/covid-19/vermont-economic-recovery-and-relief-package.