City council approves second round of funding program for small businesses

Small business relief program still has $2 million left after initial application period closed

Small Homer businesses who missed out on the first round of CARES Act relief funding given out by the City of Homer, or that still have outstanding financial hardships caused by the novel coronavirus pandemic, will have a second chance to secure some of that economic relief funding.

The Homer City Council passed a resolution at its Monday meeting that creates a second round of the city’s Small Business Economic Relief Grant program. Back in July, the city first created the program and appropriated $3 million in CARES Act funding to it, to be given out to small Homer businesses in grants of up to $3,000. That original program ended on Sept. 25.

According to the resolution text, the funds allocated to the program have “a substantial balance remaining.” The resolution text notes, as did council members at the meeting, that the Kenai Peninsula Borough used its CARES Act funds to give financial relief to businesses in the area outside of limits at a “much higher level” than the city’s program did.

The second round of the small business program is to get more of the allocated $3 million into local businesses and to correct the “disparity” between how much the city’s program funded businesses compared to how much the borough funded struggling businesses.

Jody Mastey is the Small Business Economic Relief Grant program coordinator. She told the council during its meeting that the city received 412 applications from small businesses. There are two that are still pending. The city has awarded just over $1 million in grants to small businesses during the first round of the program, leaving two thirds of the original allocation untouched.

According to the policy for the second round of the program, there are $2 million in funds available, which will be given out in grants of up to $50,000 to small businesses located within Homer city limits or that operate primarily within city limits. However, the council noted that it has received additional CARES Act funding passed down from the borough, and could appropriate more money to the small business grant program down the line if needed.

There are a few options for which grant amounts businesses can get. They could opt to get a grant of up t0 $50,000 based on eligible expenses and percentage of loss when comparing their gross income reported on the 2019 borough sales tax reports and the first three quarters of 2020. These grant awards will be capped to not exceed total 2019 earnings, or to not exceed $50,000, whichever is less.

The second option is for a business to not submit its annual income reports and simply request a grant of up to $4,500 based on eligible expenses incurred during the pandemic. If a business already received a grant during the first round of the program, it is eligible to apply during the second round for a grant of up to $1,500, also based on eligible expenses.

Council member Donna Aderhold wanted to make sure what checks and balances were in place to keep businesses from “double dipping” in both rounds of the grant program.

“The grants are set up now that it’s based on need,” said Jenny Carroll, Special Projects and Communications Coordinator for the city. “So anyone who’s come in for a round one grant that has, you know, gotten a $3,000 (grant) … the policy is that you would not apply unless you had needs greater than that.”

Carroll said most, but not all, businesses probably do have financial needs right now that exceed what could be covered by a $3,000 grant.

“The idea is that we are asking for a budget just like in the other (economic relief) programs,” Carroll said. “And that those funds will be budgeted out into different categories and a certification that there’s no double dipping, not only from the first $3,000 grant, but from any other CARES Act relief funds they’ve … gotten in other places.”

There were concerns among some council members about giving a second round of CARES Act relief funds to businesses before it’s known how well the funds are being spread out in the community. The city’s grant program that puts relief funds directly into residents’ households was launched on Monday, and the $1.5 million allocated to that program has not gotten out to the community yet.

“I have a concern about … offering CARES (Act funding) to as many people as possible in our community,” said council member Joey Evensen. “And that’s why I keep coming back to the household program, trying to disperse it as widely as we can. … I guess I have kind of a background concern about giving more to the same crowd versus just trying hard to spread it. You know, the entire community needs it.”

Council member Heath Smith echoed those sentiments.

“Council member Evensen and I have been pretty consistent about not wanting to just leave the households as an afterthought,” he said. “We have to remember that the households are directly affected in a lot of different ways, and some of them are the very employees of these businesses that we’re talking about.”

Smith said he doesn’t want the council to lose sight of the critical role individuals and families play in Homer’s economy.

“These households are really kind of the nucleus of a community,” he said. “And, you know, when they struggle financially, that affects every aspect of their life.”

Aderhold countered that the reason for the second round of funding now for small businesses is to correct the disparity of the low amount of funding Homer gave to its businesses compared to what businesses outside city limits got from the borough.

Evensen said he recognized that disparity, but had an issue with funding one group, in this case, businesses, a second time.

“But it just makes the overall disparity between these programs and the folks kind of left out that much greater. It becomes huge,” he said. “In a sense it’s kind of obscene that one crowd can go after $50,000 when another crowd can go after $1,500 and the latter crowd makes up the majority of our community.”

In the end, the resolution creating the second round of the small business relief program passed with no objections from any council members.

Council member Rachel Lord noted that this resolution does not have any additional funding allocation in it — the funds for the second round will come from the remaining $2 million. Any additional funding allocation to any relief program would have to be done through a separate process.

Read the full eligibility requirements for the second round of the small business program here:

The resolution passed Monday night and the program policy document do not list a start date or application period for the second round.

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