The City of Fresno has officially severed its working relationship with Bitwise after the company’s financial collapse in recent weeks.
Thursday, the Fresno City Council voted to terminate a contract the city had with the failed tech and real estate company.
The backstory: In 2021, Fresno received over $170 million COVID-19 federal relief funding from the American Rescue Plan Act.
- The city used $10 million of it to provide grant funding to local community-based organizations for projects that helped the community in its recovery from the pandemic.
- Last year the council allocated $1 million to Bitwise to initiate a small business digital empowerment program.
- That program was intended to boost the profitability and creative capacity of local businesses by connecting them to internet resources, build custom technology for them and grow their digital literacy.
Driving the news: Last week Council members Mike Karbassi and Nelson Esparza announced their intent to try to claw back whatever money the city can from its contract with Bitwise.
- So far Bitwise had received a $500,000 disbursement from the city.
- The resolution that the city council passed Thursday to terminate the contract states that Bitwise is required to return all unused grant funds to the city.
- Bitwise submitted its first report earlier this year on how it spent the first $120,000, and the company is supposed to submit a second report to the city on July 14, which will give the city a clearer picture on what remains of the $380,000 that was not previously spent.
What we’re watching: Even if the city is not able to claw back any of the money that Bitwise had received, the remaining $500,000 from the $1 million grant will be available for the city to use at its discretion.
- Thursday’s resolution states that the council desires to use the funding for the Fresno Water Tower Project or to support small businesses downtown that were impacted by the pandemic.