Small businesses, human services or both? Council debates best ways to use federal CARES money

Councilmembers, the mayor and staff during Tuesday night’s Zoom meeting.

How to use federal money allocated to help cities rebound from the COVID-19 pandemic was a topic of lengthy discussion at Tuesday’s Edmonds City Council meeting — and the matter will be discussed again at next week’s June 16 business meeting.

Edmonds is set to receive $1.2 million in CARES (Coronavirus Aid Relief and Economic Security) Act funds, and Mayor Mike Nelson last week proposed that the city use two-thirds of the money ($800,000) to provide grants of up to $10,000 for small Edmonds businesses.

Nelson also proposed that the remaining $465,100 in CARES funds help defray unbudgeted city costs related to the COVID-19 outbreak, including extra custodial staff, requirements to frequently sanitize facilities, security measures at parks and extra signage.

City Economic Development Director Patrick Doherty explained Tuesday night that the vision for the business grants program is to allocate them to storefront business — including retail, restaurants, and hair and nail salons — that were forced to close during Gov. Jay Inslee’s stay-at-home orders aimed at slowing the COVID-19 outbreak. Under the mayor’s proposal, qualified businesses would have a minimum of two employees and a maximum of 30 workers. The business would also have to show an at least 30% loss in business/revenue year-over-year in April and/or May 2020.

“While certainly most businesses have suffered during this crisis, storefront businesses have largely not been able to be open,” Doherty said, adding that in some cases businesses’ revenue has dropped up to 90 percent. Those storefront businesses provide hundreds — if not thousands — of jobs in the community for entry level or lower-skilled workers, Doherty added, and ensuring those people have jobs will help the lower-income households in Edmonds who have suffered financially during the crisis, he said.

To select grant recipients, the city has been working on selection criteria using a ranked numeric system, with extra points given to businesses owned by women, veterans and minorities, and — to ensure geographical distribution across city — for those outside of the Edmonds Bowl. Businesses in the creative sector would also receive more consideration, in a nod to Edmonds’ Creative District designation. Another factor would be what other grant money businesses have received.

The city loans would be forgivable if the business stayed afloat for at least four months after the money was provided, Doherty said, noting that the grant money would fill the gap between the summer months and holidays — often a busy time for businesses.

Doherty also addressed a question raised both by some councilmembers and local business owners: Why aren’t businesses with one employee eligible? Doherty said the program as proposed focuses on two to 30 employees because businesses that employ more people are helping lower-income households even more and “you get more bang for your buck.” Edmonds has about 210 business with two to 30 employees and changing the number to one to 30 would expand the grant-eligible pool by another 500-600 businesses.

“You don’t have enough money to give meaningful grants to every applicant,” Doherty said. A $10,000 grant is “a meaningful amount that will help businesses weather the storm,” Doherty said. “If we spread the peanut butter too thin we worry that it won’t be a meaningful impact if we were going to give a couple thousand or $3,000 to every single business.”

Councilmember Laura Johnson said she didn’t have enough concrete information to determine how great the need is for local businesses, noting that some firms have received relief while others have not, and relief is still coming in. As a result, the picture of how many businesses need help may look different next month, she added.

“I do want to use these funds to help our small businesses,” Johnson said. “I think that is priority, they are struggling to pay rent, to pay employees, and to safely reopen and stay open. However, we also want to help our families that are struggling to pay the bills and stay in their homes. The question is, who has the most need here and what’s the best use and will have the widest and most lasting impact?”

As a result, Johnson said she believes the safest approach would be a 50-50 split of the $800,000 between businesses and residents in need.

Doherty replied that distributing the money to residents wouldn’t have much impact. For example, he noted that Edmonds has 1,663 low-income households earning 30% of the countywide median income, and if the city distributed the $800,000 just to those households it would result in a one-time check of $480, which “is not a lasting sustainable change.” On the other hand, investing in businesses where those residents may have jobs, or could get a job, “is potentially a more lasting and sustainable approach to helping them out of their situation,” Doherty said.

He also added that the city is already helping households through its just-launched $100,000 housing relief program, as well through funds allocated to the help the Edmonds Food Bank and Senior Center.

Councilmember Diane Buckshnis said she wanted to ensure that grants are distributed outside of the Edmonds Bowl — a desire echoed by some other councilmembers — and added she also believes that sole proprietors should be eligible.

Councilmember Vivian Olson said she thinks that the city has done a better job than it ever has in trying to reach businesses outside of the Bowl noting that she personally passed out 120 multilingual flyers containing COVID-19 financial relief information to non-Bowl neighborhoods, including Perrinville, Highway 99 and Five Corners.

Regarding suggestions that money be allocated for human services, Olson pointed to Doherty’s previous assessment that allocating the city’s federal funds to residents most in need would only result in a one-time payment of $480 — and that “is going to make very little impact” compared to helping local businesses.

But other councilmembers were of the opinion that some of the $800,000 should be dedicated to assisting residents in addition to businesses.

Council President Adrienne Fraley-Monillas said she agreed with Laura Johnson that a 50-50 split between small businesses and citizens may be a better option than the mayor’s current proposal. She added she has been talking with citizens living on very low incomes who have been laid off and need help with utilities, day care, food and medical costs.

Councilmember Luke Distelhorst said that he spent the weekend researching what other cities and counties are doing with their CARES money, and discovered that most of them are allocating some of it to human or social services “to take care of their residents most in need.”

While Distelhorst said he appreciates the struggles of small businesses, “we need to have a significant portion (of the CARES fund) going to our low- or low, low-income residents.”

Councilmember Susan Paine also agreed with the idea of a 50-50 split, adding it was important to support “our neighbors who are so close to the economic edge.

“We need to make sure we reach our residents who don’t have much cushion,” she added.

Councilmember Kristiana Johnson said any plan for using CARES funds should ensure that the city is reimbursed for all expenses incurred during the pandemic. Doherty replied that the estimate of $435,000 does include all unexpected expenses, with the exception of the $200,000 that Nelson reallocated from other budget savings to three nonprofits for COVID relief: the Edmonds Food Bank, the Edmonds Senior Center, and the Edmonds Chamber of Commerce Foundation.

Some councilmembers also suggested looking into the possibility of shifting unused city money that has been allocated to the Edmonds Chamber of Commerce Foundation’s WISH Fund, which finances business-to-business grants for services — and instead use it for general business grants.

Doherty said that based on the council’s feedback Tuesday night, he would revise the CARES proposal and the council would discuss it further next Tuesday.

And the good news is, according to an announcement by Council President Fraley-Monillas, citizens next week will be able to offer public comments via Zoom. (Since remote meetings have been in effect, commenters have been limited to emailing their comments to the council.) The city will be supplying more details shortly about how to offer Zoom comments, she said.

Among other business Tuesday night, the council:

  • Further discussed but didn’t take action on a recommended option for replacing the city’s aging sludge incinerator with a pyrolysis and gasification system. The matter will be discussed again at next week’s council meeting.
  • Approved a utility easement for Snohomish Count PUD to provide power for the Edmonds Waterfront Center, now under construction.

— By Teresa Wippel

 

 

 

7 Replies to “Small businesses, human services or both? Council debates best ways to use federal CARES money”

  1. Equally to all business owners, regardless of size, or the number of employees.

    Patrick Doherty showed he is incapable of impartiality in December when he proposed to cancel the business liscences of owners who would not pay their Ed! billing.

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  2. Whoever will give kickbacks to the re-election campaigns of Nelson and the City Council body politic, or, to SEIU, will probably get the CARES funding???

    Ignored

  3. One positive that has come from the public providing public comments via email is that citizens aren’t limited to only 3 minutes. I think that practice is in the public interest and I look forward to public comments via email continuing. I recommend two things be done differently related to public comments submitted via email: 1. Disclose who has made public comment each week and provide a brief summary of the comments made and; 2. Read the public comments out loud if the comments are 500 words or less.

    In addition to the above, allowing citizens to join the Zoom meeting to make public comments is a good idea.

    All the above should facilitate the provision of public comments to City Council. I encourage people to submit public comments using whichever technique you are comfortable with. The more our City Council hears from citizens the better.

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    1. I agree wholeheartedly with Ken. I know several folks (pre-COVID) who couldn’t attend meetings due to schedule conflicts, accessibility issues, conflicting responsibilities, etc. I also know lots of folks who aren’t comfortable standing in front of a group of people and talking for 3 minutes (shyness, stutters, etc). Both those groups are well served by emailing comments. I’m sure there are logistic issues and we can all imagine nightmare scenarios but including them in council packets and reading them aloud prior to meetings would add more good than not (provided they aren’t too long – 500 words seems about right). I’m curious what input our City attorney would have to this approach? Bottom line, the more we can include different points of view – the stronger our solutions will be.

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      1. I submitted Public Comments via email for the June 16, 2020 Council Meeting on June 10th. I wanted to get the comments in early in the hope Council would add an item to the June 16, 2020 agenda.
        Yesterday, Legislative Aide Maureen Judge emailed me and told me to please resubmit my public comment on Tuesday at 7pm using Zoom.
        I responded to her and my response concluded as follows:
        “I hope the City Council appreciates the value of allowing public comments to be submitted via email and that such will remain a permanent option for citizens that want to use email to submit public comments. I am happy public comment can now also be made via Zoom but hopefully that is just one option available to citizens.”
        “Public comments are in the public interest and I hope the City Council chooses to facilitate public comments from as many citizens as possible.”

        Hopefully, City Council will not restrict Public Comments to only those who have the ability to use Zoom and who are available to use Zoom at 7pm the night of City Council Meetings.

        Ignored

  4. I have prepared many 3-minute-long public comments for City Council over the years. I have found that 500 words gets me close to the 3-minute mark. I know that different people speak at a different pace, but 500 words is one quantity that Council can consider reasonable to read out loud during meetings.

    I support anything that increases the ability of citizens to be heard – as Nathan points out there are many reasons public comments do not get made (schedule conflicts, accessibility issues, conflicting responsibilities, shyness, etc). I know how anxious I get on days that I have decided to attend a Council Meeting that night and make public comments.

    Another thing I think the City Council should figure out in the future is how to make sure citizens who have made public comments get to make the last comments prior to a City Council Vote. I have seen the City Attorney and/or City Staff comment about a citizen’s comment after the fact without the citizen who made the comment being able to respond to what the City Attorney and/or City Staff said about their public comment. I have seen people try to do so from the audience only to have a Mayor stop them from doing so by telling them that their 3 minutes are up.

    If the City Attorney and/or City Staff respond to a public comment, Council should consider reopening public comments so that citizens get the last word before a City Council vote. City Council represents the citizens, not the City Attorney and/or City Staff.

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  5. Two issues:
    1. Giving away money. Govt is seldom effective on giving away scares resources. The have difficulty decided what problem they are trying to solve. In this case there is not enough money to save all our small businesses. So how will we decide the winners and losers? Should we save the business or should we save the landlord? We had for example money for homelessness and did you even talk about how to use it, we just raided it to give to people who are not homeless. We are doing the same thing with these dollars, business or to people. Elsewhere folks have complained about the public restrooms being closed. Schools out, hire some kids to wipe things down after each use and not only do we open the restroom we give income to someone. We need to find ways to leverage the funds for we will not have enough to do what some would wish.

    2. Public comments: both Ken and Nathan have some good points but reading comments into the record will lead to council and the public spending a great deal of time listening to letters being read. When we have a public hearing on a topic that folks are interested in we get great participation, generally a few points stated over and over., but great participation. If council were to gather input from the public on “what topics would you like us to discuss?” The schedule “public input session” to gather input we would have a much more focused discussion on individual topics. We do this a little bit via town hall sessions, open houses sessions on things like waterfront access or a housing strategy. No matter how we do it we could create a better environment for public input that serves the community better. Focused input and discussion would be more effective than just reading letters and allowing zoom comments. This forum tries to do that but it so frequently gets “hijacked” with with the same opinions.

    Ignored

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