WASILLA — The Wasilla City Council unanimously voted to approve Ordinance 20-028 accepting and appropriating $18,690,897.67 of CARES act funding during its meeting Monday.
The outline of the ordinance provides four sections of fund disbursement. Ordinance 20-028 set aside $7,819,397.67 as city resiliency and recovery funds, $300,000 as city mitigation and reimbursement monies, and $2,831,500 for personal protective equipment grants for nonprofits and for profit entities up to $2,500. The $7,740,000 set aside for small business relief grants was the topic of council discussion at Monday’s meeting. The small business relief grants for up to $10,000 only apply to businesses employing 20 or fewer people.
“I think we need to make sure that that passthrough is available to all of the businesses in the city of Wasilla since the passthrough is based on gross sales as reported on their sales tax return to the city. Those businesses that are collecting sales tax for the city should be the ones that are benefiting from this money that’s out there,” said Councilman Stu Graham. “All businesses needed to be treated the same if they fit the [Small Business Administration] definition of a small business, then they should be eligible for this round of funding.”
Graham believed that the ordinance would be up for another round of public comment at the next meeting and was surprised that the council was able to take action on Monday night. Graham proposed an amendment that added the Small Business Administration’s definitions of a small business as of March 1, 2020. The proposed amendment would allow for businesses up to 1,500 employees to receive funding that were privately owned corporations, partnerships or sole proprietorships with revenues less than larger businesses. This definition would not include large retail locations such as WalMart or Target that are publicly traded companies.
“For us to say that we’re going to take 18 plus million dollars worth of covid relief grant money and only grant that to the businesses that collect the smallest amount of sales tax is grossly unfair,” said Graham. “The numbers just don’t match up. We’ve got $4 million there that we know that we’re not using and to exclude businesses that are valuable citizens and tax collectors for the city just is unfair.”
Discussion around Graham’s amendment also brought into question which businesses would be eligible for subsequent rounds of funding. Council members discussed passing Ordinance 20-028 without the amendment and holding another special meeting to determine how to disburse additional funding at a later date. Councilman James Harvey also provided SBA definitions of ‘small businesses’ for various different industries. The SBA does not provide one singular definition for small businesses, but breaks down business categories and provides thresholds for number of employees and average annual receipts that vary between industries. Graham referred to the 20 employee threshold as only serving ‘microbusinesses’.
“This first round, that’s going to help these little guys that there was no help for nowhere and this is the first thing that they can apply for and have some kind of light at the end of the tunnel,” said Councilwoman Glenda Ledford. “That one person is just as important as the 20 or that small business, that microbusiness that you talked about is just as important to this city and to the economy in this city.”
City Attorney Leslie Need advised the council that if the ordinance was amended, it would need to be reintroduced for adoption and not passed on Monday night. After consulting Finance Director Troy Tankersly who said that the delay in disbursement of funds would only take between a week to 10 days if the ordinance was amended, Graham stated that he did not feel the additional hurdle was cumbersome to business owners. Council members Harvey and Nikki Velock both said they supported the intent of the amendment but wanted to get funds to Wasilla business owners without delay.
“I think that the 20 employee standard should stay and it should stay as written, again we can always go back to the drawing board in round two,” said Councilman Tim Burney.
Graham’s amendment to change the definition of small business to the SBA definition failed 5-1 with Graham casting the only yes vote. The vote on the ordinance as a whole passed unanimously.