Meeting of the State Committee of Vendors
Wednesday, March 31, 2021
Chairman James Warth called the meeting to order at 2pm. Vice Chairman Terri Lindstrom called the role.
The following individuals were present:
James Warth, Chairman
Terri Lindstrom, Vice Chairman
District Representatives: Kurt Ponchak, District 1; Mike Renaud, District 2; Mitzi Bowen, District 3; Randall Crosby, District 4; David Stevens, District 5; Phil Hubbard, District 6; Jose Quintanilla, District 7; Sead Bekric, District 8; Joel Rose, District 9; Lilian Pemberton, District 10.
Bureau of Business Enterprise Staff: Bill Findley, Bureau Chief; Maureen Fink, Operations Manager; Alan Risk, Compliance Officer; John Ahler, Business Analyst; Rafaella Diershaw, Region 5 Business Consultant; Janet Chernoff, Administrative Services Consultant.
Licensed Vendors: Debbie Hietala, Appropriations Subcommittee member.
Per the Sunshine Law the meeting was open to all interested parties but only the persons listed above participated in the discussion.
The agenda was accepted without objection. Prior to the meeting Bill Findley had sent notes on the FRRP for the Committees review along with opinions on PPP and a draft of a survey that would be used for attestation on compensation. Information on a vendor requesting that loss due to a planned closure for renovations be considered eligible for FRRP funds was also sent to committee members.
Bill opened the meeting by telling the group that the Appropriation Subcommittee has had numerous meetings on the FRRP funds and their distribution. He also told the group that the award will not cover all the losses incurred in 2020. The subcommittee used the net profit as vendor income for the period of March – December 2020 as compared to the same period in 2019. The subcommittee is recommending that attestation be used to ensure that vendor losses were not previously compensated. The purpose of this is to ensure that the total of compensation and award does not exceed their loss. It was suggested that the words “under penalty of perjury” be used in the attestation.
The subcommittee is recommending that the money be distributed by a proportional method. The FRRP award will be divided into the total loss to get a percentage. That percentage will be multiplied by the individual’s loss to determine their award. Kurt made a motion to accept the formula recommended by the subcommittee. Seconded by David Stevens. There were questions about calculating individual loss but that is a separate discussion. The motion passed with all twelve committee members voting yes.
The next discussion was about calculating loss and whether to use income only from a vendor’s primary facility or from primary and secondary facilities. Kurt feels that the language in the rule and subsequence information requires that all income be considered. The subcommittee could not come to a consensus on the subject. Bill told the group that the BBE is only looking a net profit and is comparing 2020 to 2019 for the months of March - December. In answer to the question about vendors who were not in a facility in 2019, data from the previous vendor can be used for comparison purposes. Per the answers to the FAQ any vendor who retired, resigned or died in 2020 and is no longer in a facility is not eligible for the award. Vendors whose facility closed in 2020 are still eligible. If a vendor was in a facility in 2020 and retired in 2021 they are eligible. Kurt is recommending that all vendor income be used as he fears the plan will be rejected if they do not. It was further explained that BBE will be taking all a vendor’s income for March-December 2020 and comparing to the same period in 2019 to determine a vendor’s loss.
Kurt Ponchak made the motion to include all vendor income from period of March – December 2019 as compared to March-December 2020 to determine a loss. They would only consider gains and losses that are a result of the pandemic. Seconded by Randall. It was clarified that they would be using vendor income not facility income. The motion also indicates that they would not be considering losses brought about by other actions unrelated to the pandemic such as facility closures for renovations. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
Kurt recommended using a survey to collect the attestation for compensation. The BBE will use this information to make sure that the compensation along with the award would not result in a vendor receiving more money that their estimated loss. The answers to the FAQ directed that compensation should be considered but it is not definitive on what is considered compensation. Grants, unemployment, PPP loans and SSDI applied for and received in 2020 could all be considered compensation.
The first question addressed is whether PPP loans would be compensation. Bill has reached out for opinions and both the SBA and Terry Smith are of the opinion that PPP loans would not be considered compensation. Some of the issues are whether the loan will have to be repaid and that all the money may not have gone to the vendor. PPP money can be used for labor and other business expenses. Kurt Ponchak made a motion not to include PPP loans as compensation on the attestation. Seconded by Sead Bekric. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote. Bill Findley will include the Committee’s reasoning in the plan submitted to RSA.
The next discussion was whether unemployment payments would be considered compensation. Mike Renaud was of the opinion that unemployment taxes will go up and will offset any payments. For the purpose of the attestation the group cannot speculate what will happen in the future. Joel Rose clarified that unemployment is only payments to the vendor and not to family members or staff. Mike questioned whether the first $10,200 in unemployment should be counted as it is not taxable as income. Kurt Ponchak made the motion to include unemployment paid to the vendor as compensation for the attestation. Seconded by Jose Quintanilla. David Stevens stated that it’s important to remember that they are not talking about reducing FRRP payments to vendors. The purpose of the attestation is to make sure that the total of the payment and compensation is not more that the vendor loss. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
Kurt made the motion to include SSDI payments applied for and received in 2020 and any money for grants as compensation. Seconded by David Stevens. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
Kurt made motion that vendors have fourteen calendar days to return the attestation. Seconded by Mike Renaud. Jose suggested a month and Mike Renaud suggested 21 days. Mitzi asked if the plan could be submitted while the attestation information was being collected and Bill told the group that both could be done simultaneously. Mitzi felt that two weeks is reasonable. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable.
Kurt made a motion to allow the agency to include any necessary legal language in the attestation. Seconded by Sead. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
There is a concern that there may be a small amount of money left over when the award is distributed. The assurances document asks that the Division indicate how any money not distributed to the vendors will be spent. Kurt moved that any remaining balance from the FRRP funds be used per 34 CFR Section 395.9 for maintenance of equipment. Seconded by Joel Rose.
The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
Kurt made a motion that Committee concurred with the Department of Education that none of the award would be used for administrative costs. Seconded by Mitzi Bowen. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
Kurt made a motion that the Committee consented that he and Bill Findley would work together on the draft of the plan for the FRRP funds and all related documentation. Seconded by Mike Renaud. The motion passed with all eleven committee members voting yes. Phil Hubbard was unavailable to vote.
Kurt made a motion to include an option in the attestation survey that would allow a vendor to opt out of the payment. Seconded by Mitzi Bowen. Passed without objection.
Kurt made a motion to adjourn. Seconded by Joel Rose. Meeting was adjourned at 3:50pm.