The City of Aberdeen will provide $200,000 in grants to small businesses affected by COVID-19-related restrictions.
“Recently, the city was awarded $506,400 from the federal CARES Act for revenue the city lost due to the COVID-19 pandemic crisis,” Community Development Director Lisa Scott told the City Council Wednesday. “One of the eligible activities with this money is to establish grants or loans to help small businesses recover from the pandemic.”
The city determined it would not need that entire amount to cover its expenses related to the pandemic, freeing up the $200,000 in small business grants. Depending on city expenses around the pandemic in the future, a second round of funding could be done with remaining CARES Act money.
“When the city learned of this money coming into the city the first thing we started to discuss was how to help our small businesses, which we knew were suffering,” said Mayor Pete Schave. “So this is not a big thing, but a positive thing, and if it will help in any way then it will be a success.”
While the final model is still in the works, the council voted to approve a draft plan that would have small businesses applying for grants of up to $10,000 from June 1 to June 5. As of Friday, Scott said the city’s legal department was going over the final details, and as soon as the application is approved it will be posted on the city’s website under the “COVID-19 INFORMATION” tab at the top of the home page, https://aberdeenwa.gov/AlertCenter.aspx. The application period will run for five days once the application is posted.
Scott said by by providing an application period, rather than the first-come, first-served model used for state and federal relief, the city would be able to identify businesses in need and provide funding to those who may have missed out on the millions provided federally through programs like the Payroll Protection Program.
“I think it’s really great we’re reinvesting in those who have already invested in our city, and I think the way it’s written truly benefits what we consider to be small businesses,” said Ward 3 Councilwoman Kati Kachman. She said she liked the idea of giving “preference to small businesses that may not have received funding from other sources, those that were overlooked that really need that money to keep businesses open in Aberdeen.”
A provision of the draft plan, which said “Grants cannot be made to businesses owned, or partially owned, by managers, officers, directors of public officials associated with the City of Aberdeen” drew some debate. Three council members – Ward 2 Councilman Nathan Kennedy, Ward 6 Councilman Frank Gordon, and newly-appointed Ward 5 Councilman Alan Richrod – recused themselves from the discussion and vote because they themselves are small business owners.
Ward 1 Councilwoman Tawni Andrews offered an amendment to the report that would allow public officials to apply for the grants, stating those who had recused themselves from the vote were an example of small business owners with ties to city government that should have access to relief funds. Council President Dee Anne Shaw backed Andrews’ position, and the subsequent vote was unanimous to allow city employees and officials who own small businesses to apply for the relief funds. That section as of Friday was still under review by the city’s legal department and could change when the applications are made available within the next week.
Scott said the applications will be reviewed and decided upon by the Good Neighbors Revolving Loan Fund Committee, which currently has four members, none of whom are currently on the City Council. While the council will be called upon to approve the funds after the committee makes its decision, the council itself will not have a hand in determining who gets the funds.
To qualify for funding, businesses must meet this criteria:
– Have a current City of Aberdeen business license
– Be in good financial standing with all city tax report prior to March 1, 2020
– Have been in business for at least one year prior to March 1, 2020
– Have a physical location in the city limits of Aberdeen on or before March 1, 2019
– Have no more than 20 full-time-equivalent employees (priority given to businesses with 10 or fewer full-time-equivalent employees)
– Engage in a type of business eligible to receive funding by the US Small Business Administration
– Ability to demonstrate loss of income due to COVID-19
– Ability to prove you have been previously profitable with financial statements or tax returns.
Eligible business activities for the funding include monthly rent and business loan payments, wages, and normal operating costs. Grant money cannot be used for bonuses to owners or employees, wages to an owner’s family who is not a bona fide employee, charitable and political contributions, gifts or parties, or paying down a debt more than required by the debt agreement.