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proposal is not narrowly tailored to specific businesses that have demonstrated a need for the <br /> assistance like other subsidy programs that the EDA has created in the past. For instance, under <br /> the EDA's microloan programs, businesses must individually apply for funds, explain why the <br /> assistance is necessary, and demonstrate how the specific amount of funds requested will help <br /> the business. In contrast, the Gift Card Program provides a blanket subsidy to all local <br /> businesses. The Gift Card Program could be modified to require each business to apply for <br /> funding and explain how its profits have suffered due to the COVID-19 pandemic (potentially by <br /> submitting profit/loss statements for the year) which could help justify the necessity of the <br /> program to help businesses survive during the COVID-19 pandemic, but we still have concerns <br /> that the program is not structured as a loan. Structuring the program as a loan or a forgivable <br /> loan would be impractical because the likely cost to administer the loans would be more than the <br /> actual subsidy. Moreover, unlike other business subsidies, the Gift Card Program would not be <br /> reimbursing the business for an actual expense, such as building construction or site <br /> improvements. <br /> Additionally, we are concerned that the Gift Card Program is providing a subsidy to consumers <br /> rather than businesses. The Gift Card Program benefits consumers directly in the form of 20% <br /> increased gift card amount while the benefit provided to businesses is indirect in the form of a <br /> potential increase in overall sales. No authority exists under the EDA Act to provide assistance <br /> to consumers to spur demand for local businesses. <br /> While the EDA could potentially argue that funding the Gift Card Program is an authorized <br /> expenditure for public relations under Section 469.101 of the EDA Act, relying on this argument <br /> to finance the program creates a risk for the EDA. The expenditure of EDA and City funds is <br /> subject to review by the Office of the State Auditor (the "OSA"). While review of local <br /> expenditures by the OSA is rare, in our experience, the OSA strictly construes the need for <br /> statutory authority for the use of public money for an expenditure. Due to the lack of clear <br /> statutory authority for the use of public funds for the Gift Card Program, we are concerned that <br /> the OSA would view the expenditure as unauthorized. <br /> If you have further questions on this matter, please give me a call. <br /> EL185-13-680890.vl <br />