Fiscal Note
The proposed resolution authorizes CDD and EDD to release the RFP for small business assistance. $450,000 of federal CDBG entitlement funds are included in CDD's 2026 Operating Budget request within the Community Development Grants fund, Small Business Assistance service to support the contracts awarded through the RFP. Funding is contingent upon adoption of the 2026 Operating Budget by the Common Council. No City appropriation required in 2025.
Title
Accepting the Economic Development Division’s “2025 Small Business Assistance Policy Paper” as the basis for structuring and conducting a Request for Proposals (RFP) process and authorizing the Community and Economic Development Divisions to undertake this process and recommend, for approval by the Common Council, a funding allocation plan regarding awards and contracts that will take effect on or after January 1, 2026 (Citywide).
Body
The proposed resolution accepts a staff-prepared “2025 Small Business Assistance Policy Paper” and authorizes the Economic Development Division (EDD) and Community Development Division (CDD) to use its content to guide a funding process to allocate $450,000 of federal Community Development Block Grant (CDBG) funds to support small business assistance. EDD and CDD staff will present recommendations for Common Council approval regarding the allocation of these funds to community partners for use in contracts that will take effect on or after January 1, 2026.
The City of Madison has long-supported organizations that provide assistance to small businesses as part of its strategy to have a growing, diversified economy that offers opportunities for both businesses and residents to prosper. CDBG funds, which are administered in CDD, have been used for many years to help achieve the City’s Small Business Assistance goals. More specifically, the funds have supported the provision of technical assistance to micro enterprises and provided loans to small business owners to help them grow their businesses and create jobs.
CDD has worked closely with EDD in the use of CDBG funds for small business assistance and, in 2021, turned over to EDD staff primary responsibility for administering contracts funded with CDBG dollars. In the 2025-2029 Consolidated Plan, approved by the Common Council on March 11, 2025 (RES-25-00181, Legistar File #87293), the annual commitment of CDBG funding for small business assistance was increased from $249,000 to $450,000, the first increase in many years. That does not include funds available within current Revolving Loan accounts established through existing lending programs.
The RFP process that this resolution authorizes will be the first time that these funds have been put out to bid since 2014. The policy paper contemplates little change from the current focus on improving access to financial and technical assistance for entrepreneurs and small business owners, however the RFP will provide an opportunity for new organizations and new strategies to achieve those objectives.
Action Items
WHEREAS, small businesses are a critical component of our local economy as they provide essential goods and services, create opportunities for local employment and contribute to the overall quality of life in Madison; and,
WHEREAS, small business owners continue to face challenges such as obtaining access to both financial and social capital, education, training, and technology; and,
WHEREAS, organizations that assist small businesses provide crucial services to help them navigate these challenges by providing financial and technical assistance, mentoring and training, and other services that are necessary for small business owners to start and grow their enterprises; and,
WHEREAS, one element of the City’s support for small businesses has been the use of federal Community Development Block Grant (CDBG) funds, administered within the Community Development Division (CDD), funds which have been used to provide both financial and technical assistance to entrepreneurs and small business owners in Madison; and,
WHEREAS, the City’s 2025-2029 Consolidated Plan, approved by Common Council on March 11, 2025 via RES-25-00181 (Legistar #87293) and subsequently approved by U.S. Department of Housing and Urban Development, which outlines the City’s intended use of CDBG funds, calls for $450,000 to be dedicated to small business assistance, a $200,000 increase from current funding; and,
WHEREAS, a staff-prepared policy paper, if approved by the Common Council, will direct the continued use of CDBG funds to support financial and technical assistance for entrepreneurs and small business owners, with an emphasis on creating new jobs; and,
WHEREAS, those objectives will be pursued through an RFP process in which EDD and CDD will solicit proposals from local organizations seeking funding to support programs and activities focused on assisting small businesses.
NOW, THEREFORE BE IT RESOLVED that the Common Council accepts the 2025 Small Business Assistance Policy Paper as the basis for developing a Request for Proposals process; and,
BE IT FURTHER RESOLVED, that the Council authorizes Economic Development and Community Development Division staff to conduct an RFP process and develop funding allocation recommendations for consideration and approval by the Common Council, that will support contracts with selected agencies beginning on or after January 1, 2026.