City of Fresno officials hold a press conference about Bitwise on Thursday. Photo by Ben Hensley

Fresno City Councilmembers Nelson Esparza and Mike Karbassi, alongside City Manager Georgeanne White and City Attorney Andrew Janz, hosted a press conference Thursday afternoon to inform the public about the City’s plans to assist Bitwise employees displaced due to furloughs issued Monday.

Esparza revealed at the press conference that he, Karbassi and councilmember Miguel Arias will request their colleagues to reconsider a business contract in light of the recent development.

“There will be an internal review for all business with the company and its affiliated entities in conjunction with the city manager that will be reported to the Economic Development Council subcommittee,” Karbassi said.

The City of Fresno currently has an existing contract with Bitwise for $1 million in American Rescue Plan Act (ARPA) funding for a digital marketing program for business owners. Half of that money has already been disbursed to Bitwise, according to White.

The funding requires quarterly reporting. According to White, Bitwise submitted one quarterly report, detailing its use of $120,000.

The second report is due July 14.

“Right now, they’re not delinquent on that report,” she said. “The resolution that the councilmembers are contemplating will talk about trying to recapture any of the funds that have not yet been spent of the remaining [funds].”

White suspects that a portion of the remaining $380,000 has been spent, but the city will not know the details of that spending until after the report has been submitted.

Karbassi also commented on a letter sent by Fresno Mayor Jerry Dyer to Bitwise co-CEOs Jake Soberal and Irma Olguin Jr. informing them of their potential violation of the Worker Adjustment and Retraining Notification (WARN) act, which requires businesses with 75 or more employees within a 12-month period to provide 60-days advance notice to employees, the city and state Employment Development Department (EDD), in order to create time for these entities to implement strategies to assist employees in the transition.

“I firmly believe that Jake Soberal and Bitwise have robbed this city of that time,” Karbassi said.

In the letter, the Mayor also stated that Bitwise-related entities have not paid city business taxes since September 2021.

Business taxes are required to be self-reported and submitted annually by businesses within the City of Fresno.

Bitwise was last sent a delinquency notice in December 2022. White added that Bitwise had been in contact with the city regarding a discrepancy between several tax submissions, but no progress had been made since this past January.

Despite that contact earlier this year, White said that the city has had no contact with Soberal or Olguin Jr. since prior to the furloughs Monday.

White added that during the pandemic, the city made a conscious effort to ease their pursuit of tax delinquencies.

“I think that’s one of the things that we need to tighten up,” White said.

White said that currently, Bitwise has a maximum delinquency of $20,000 to the city, and that the city would continue to encourage the company to submit their paperwork.

Karbassi added that despite the financial challenges faced recently, Bitwise’s workforce development efforts were highly beneficial to the city.

White said that businesses that utilized space at Bitwise’s buildings can reach out to Lance Lippincott with the Fresno Economic Development team to assist in locating new office space. She also encouraged property owners with excess space to reach out to Lippincott if they are willing to help support businesses displaced by the furloughs.

“The work they created was good,” Karbassi said, adding that their positive achievements have gone on to help employment and revitalization in other cities they operate in, including Buffalo and Toledo. “It’s just a sad situation.”