AUGUST 13 – WEEKLY UPDATE
Even during a pandemic, veepstakes and election enthusiasm have brought back some feeling of election season normalcy. This week, Joe Biden announced California’s own Kamala Harris as his running mate. This is historic–making Harris the first Black and South Asian woman on a major party ticket. The pick is particularly interesting for Californians, as her highly coveted Senate seat now draws plenty of interest from possible successors. For those wondering, here’s how that would work: first, Biden/Harris would have to win in November, then Governor Newsom has to appoint her successor to fill her seat until this term ends in 2022. Not only is the appointment notable as it leaves out election drama, but it would allow that appointee to run as an incumbent in 2022, a significant advantage. Needless to say, the next few months will be eventful.
Over the weekend, President Trump issued an executive order and three memoranda following the unraveling of congressional talks around the next round of stimulus. The President sought to address evictions, unemployment benefits, student loans, and payroll tax relief. More specifically, the President directed $400/wk in additional unemployment benefits, with $300 coming from the federal government and the remaining $100 to come from states. Eviction relief is to be determined by leadership at the Health and Human Services Department, and the Centers for Disease Control. Whether financial support is to be given to renters will be following a determination from the Treasury and Housing and Urban Development. Student loan interest is to be waived until December 2020, but it is unclear whether this includes student loans that are privately held. Finally, the memo outlines a payroll tax deferral from September 1, 2020 through December 31, 2020 for those earning $100,000 or more per year. However, Governor Newsom has questioned the state’s ability to fund the additional $100/wk in unemployment benefits, and congressional leaders have indicated that there could be lawsuits challenging whether the President has the authority to issue such direction. Mid-week, it was announced that the unemployment benefit would be $300/wk in addition to the state benefits provided.
The Senate adjourned through Labor Day today. A Phase Four federal relief package deal may not be reached until possibly September. Senator McConnell relayed that senators would receive a 24 hour notice should they need to return to Capitol Hill for votes.
August’s monthly labor review for the U.S. has been made available and includes data and geographic outlooks regarding the impact of COVID-19. Not surprisingly, the report highlights the economic realities of the spread, and the very real need to contain it to provide better stability for the private sector in the future. On a more positive note, the U.S. unemployment rate recently dropped down to just over 10%, following its peak of 15% in April.
A new COVID-19 testing site has opened outside of the San Ysidro East Pedestrian Port of Entry (PedEast) processing area, next to the trolley station. The site operates from 6:30am-10:30am Monday through Friday and offers about 200 free tests daily for interested individuals. Although the initiative is primarily to serve essential workers and American citizens living in Tijuana, local residents are also welcome, and no appointments are necessary.
Health and safety checkpoints enforcing stay at home orders remain in place at the Ensenada and Mexicali city access points and those across the city in Ensenada. This includes the Calexico West, Calexico East, and Andrade/Algodones land ports of entry, where checkpoints will be operating from Friday, August 14 from 2:00pm to Sunday, August 16 at 8:00pm. Authorities will verify the use of face coverings, confirm that the trip’s purpose is essential, and conduct temperature checks for each passenger. Please note that there is also a limit of two passengers per vehicle crossing southbound through Mexicali’s land ports of entry.
Monday, Governor Newsom announced that the President’s executive order, requiring the state to pay 25% of the additional unemployment benefits, will cost California approximately $700 million per week. The Trump Administration instructed states to pay for the new expense using CARES Act funding, however, all of California’s allocation has already been appropriated through the state budget process.
The California Judicial Council will vote today on whether or not to extend its protections against evictions and foreclosures.
Calmatters has published a story and corresponding data around how COVID is exacerbating inequality in the state. This is an important story as policies are considered to rebuild the economy, and reminds us that the economy prior to the pandemic still did not work for everyone. Of note, food insecurity is thought to have doubled and a growing number of people are unsure how they will pay their rent in the coming months.
California’s jobless claims fell for the third straight month, indicating growing business sector activity amid a tentative recovery.
The Legislative Analyst’s Office (LAO) has just published a preliminary review of the 2020-2021 spending plan. You may recall that the budget relies heavily on anticipated federal relief funds, but in the absence of that support there will be significant cuts.
Last week, the state ran into testing processing and reporting issues, which reverberated a backlog of reporting accurate positive case counts through local jurisdictions statewide. At Tuesday’s county media briefing, Supervisor Fletcher relayed that the county received the majority of the reported numbers from the state through the weekend, resulting in an uptick in reported cases. The California Department of Public Health notes that the issues the reporting system faced have been addressed.
Dr. Sonia Angell, California’s top public health official, resigned as a result of the testing/reporting glitch described above. Dr. Angell will be replaced by Sandra Shewry as acting public health director and Dr. Erica Pan as acting public health officer.
Monday and Wednesday the county held budget public hearings. If you recall, in late July, the county released its revised $6.4 billion budget proposal for fiscal year 2020-21. Not surprisingly, the Health and Human Services Department’s proposed budget, if adopted, will receive a little over a 9% increase in response to continued efforts to address the COVID-19 pandemic. The proposed budget also dips $200 million into county reserves. Budget deliberations and adoption are scheduled for Tuesday, August 25. The budget proposal and public comment portal can be found here. The budget highlights are here and the staff presentation from Monday can be viewed here.
At Tuesday’s county media briefing, Supervisor Fletcher discussed the four tools the county can utilize to enforce compliance with the public health order: a visit to the entity to bring it voluntarily into compliance, the county can draft and serve a cease and desist order, the county can draft and serve a public health closure notice (often in conjunction with law enforcement), or law enforcement can issue a citation (which is a $1000 fine). The county has been working in partnership with the 18 cities and their respective law enforcement departments within the county to enforce compliance. As stated last week, the county is ramping up enforcement of the public health order through the 24/7 Healthy Compliance Call Center and an increase in additional compliance staff. Supervisor Fletcher relayed that he and Supervisor Cox met with Mayor Faulconer and Chief of Police Nisleit to discuss the approach of enforcing the public health order in the City of San Diego. Supervisor Fletcher said that the Mayor and Chief of Police communicated that entities who defy the public health order will receive citations.
As mentioned in last week’s legislative update, the county’s Great Plates Delivered program has been extended through September 9. The program has also expanded to serve people with disabilities. The county is recruiting additional restaurants, caterers, and food providers for enrollment in the program. Applications are due Monday, August 17, and can be found here.
The county case rate numbers are looking better. There have been murmurs that if we continue in this positive direction San Diego may soon fall off the state’s watchlist. Here’s a good thread on case numbers as of yesterday.
The San Diego Tourism Authority reported that its occupancy numbers are among the best in national markets as more hotels reopen.
Capital Opportunities & Resources:
- City of San Diego Temporary Outdoor Business Operations Permit – Businesses (restaurants, retail stores, gyms, hair salons, nail salons) can now expand into the public right-of-way, parking lots, and public spaces. Information on how to apply for a Temporary Outdoor Business Operations Permit can be found here.
- San Diego County Small Business Stimulus Grant – Businesses must have fewer than 100 employees, be headquartered in San Diego County, have 1-year operating history, and have experienced financial hardship as a result of the COVID-19 pandemic to be eligible. Apply here.
- Applications are due on the following dates:
- District 1 – August 14
- District 2- August 15
- District 5 – August 7 (deadline passed)
- Districts 3 & 4 – October 16
- Calling All Californians: #ShopSafeShopLocal – A new state-wide website with resources for small business owners and entrepreneurs, including a digital medial toolkit, quick links to industry guidance, direct access to PPE, and free business consulting through the Small Business Development Center network.
- The San Diego and Imperial SBDC has developed a webinar on PPP Loan Forgiveness. Watch it on-demand here.
- Businesses can also reach out to their nearest Small Business Development Center (SBDC), which has developed the Small Business Survival Resources Guide to help business owners navigate through the chaos COVID-19 is having on our communities. SBDC can help with applying for relief, guiding you through available resources and assisting with cash flow concerns, supply-chain interruptions, workforce capacity, insurance coverage, and more–all at no cost.
- The City of Escondido has partnered with the San Diego North Economic Development Council to administer the Small Business Grant Program to Escondido small businesses. Learn more here.
- The State Treasurer’s Office has published this list of Federal, State, Local, Private, and Non-profit resources available to small businesses.
- Central San Diego Black Chamber of Commerce Relief Fund – Black-owned businesses can apply for funding and technical assistance here. Email questions and concerns to firstname.lastname@example.org
- Applications are due on the following dates:
International Business Affairs:
Transboundary pollution impacting Tijuana River Valley
The Mexican section of the International Boundary and Water Commission (IBWC, or CILA in Spanish) announced a bid for the administration and quality control of the rehabilitation of Pump Station CILA in the city of Tijuana. The project, to be completed within 136 days, includes supervision and quality control of the acquisition and installation of pumps, pipes, and electric equipment; the construction of pre-treatment grids and new water intake from the river channel, both adjacent to the pump station; and the construction of a conduction system to connect the pre-treatment and water intake areas to the pump station. CILA will host a series of meetings this month including a tour of the construction site, presentations from interested companies, and a public meeting on August 28 at their local office in Tijuana where a contract will be awarded. For more information please visit CILA’s website. Applications must be submitted in Spanish and quoted in Mexican pesos and may be submitted online to email@example.com.
In Baja, the Secretariat for Water Management, Sanitation, and Protection in Baja California (SEPROA) provided an update on the 60-day plan to remove sediment and solid waste along the Tijuana River channel. Since July 6, more than 214,000 cubic meters of sediment and solid waste have been removed, comprising two-thirds of their goal and over 80% of the channel’s total length. The estimated cost of the project is $4.5 million USD and is funded in equal parts by Tijuana’s Public Utilities Commission (CESPT) and the National Water Commission (CONAGUA).
SEPROA also announced the appointment of Rigobeto Laborin Valdez as SEPROA’s Technical Undersecretary. In his previous position as Director of CESPT, Laborin led the agency’s work on the rehabilitation of Pump Station CILA and wastewater infrastructure across the city, helping reduce transboundary flows. At CESPT, Sergio Rosette Weben has been appointed Deputy Director, having previously served as Subdirector of Finance working closely with Laborin.
The Chamber’s upcoming International Business Affairs Forum will feature a discussion on the economic impact of the immigrant population in San Diego and efforts to advance their civic, social, and economic integration. The meeting will take place virtually on Thursday, August 20 at 10:00am. For more information, or to register, please click here.