The Ladysmith Common Council continued to hammer out details of a proposed new COVID-19 Micro Business Emergency Relief Fund program at a special meeting on Monday.

After a nearly 3-hour discussion at the May 4 meeting, the council voted 6-1 to give final approval to the program. Applications will be available at city hall starting on Monday, May 11 with a narrow 2-week window to apply. 

The major concerns were getting relief into the hands of businesses as quickly as possible, deciding which entity will review the applications and addressing possible conflicts of interest for city leaders who operate businesses.

The program essentially offers low-interest loans up to $6,000 not to exceed three months of operational costs between March and May of this year. These loans later can be converted to grant status not requiring repayment if certain conditions are met.

“This isn’t designed to be everything a business needs. It is designed to keep local businesses going,” said Council President Marty Reynolds, who drafted the proposal.

Funds made available through this program will be limited to those accrued in Tax Incremental District 8 and any participation by the Ladysmith Industrial Development Corporation and its affiliates, unless other funding is made available. It may be possible for other city TIDs to contribute to the program. No city-wide property tax or personal property tax will be used for this proposal.

The city has about 60 businesses just within the TID 8 boundaries, and not all have been closed or affected by the shutdown. Even if all these 60 businesses would qualify, the business economic relief proposal is expected to total $360,000 however that amount is not expected to be reached.

The council discussed tentatively capping the program at $300,000.

Funds may be used to cover, and are limited to mortgage payments, rent or lease payments, utilities, and/or insurance. Funds may be used to cover the cost of security measures if they have been deemed necessary to protect the premises or business locations. Funds may not be used to cover delinquent property or personal taxes, special assessments, or other obligations to the city, state or federal government. Prior to loan forgiveness, cost obligations commensurate with the fund provided, may be requested by the funding agent.

Funds will be made available as a no-interest loan, with no payments due until after affected operations are legally allowed to resume by state or federal decree. Business must show a good effort and a meaningful intent to resume operations at that time. If these conditions are met, the loan will assume grant status with no repayment required. Business is expected to seek further assistance through its bank, the SBA, or other source if necessary, to cover other personal and sundry expenses, unless such expenses are reviewed and approved on a case by case basis, through the fund agent.

The council discussion focused on determining the geographical area of businesses eligible to apply for the funding and reviewing conditions that must be met by local businesses and details of the funding and acquisition. They also considered how to determine the funding sources and amount of available funding. The council also discussed identifying the funding agency responsible for reviewing and approving applications.

“We don’t want to lose any businesses that are here in town,” Ald. Brian Groothousen said. “I want to make sure every business stays open.”

Reynolds also proposed prohibiting elected or appointed city officials from receiving the assistance to remove possible conflicts of interest. Ald. Marty Reynolds runs the Carnegie Hall Bed & Breakfast. Ald. Al Hraban runs Theatre Lounge. City Attorney Al Kenyon runs Kenyon Law Office.

“I am not going after anything [from this proposal] because after the tornado I remember what happened,” Reynolds said. “It might save somebody from grief down the road.”

Groothousen suggested not prohibiting any applications, instead recommending city officials who run or own businesses instead abstain from voting.

“They have no revenue and still have a rent payment,” Groothousen said. “I don’t think we should ban anyone from making that decision.”

City officials requested business owners only request what they need and not take advantage of the program.

“We are asking [businesses] what do you need to get through three months,” Reynolds said.

The council set the its Community Development Committee as the agent for reviewing and approving applications.

During the meeting, the council approved several changes to the original proposal.

The changes included:

— Requiring businesses must have been established prior to Jan. 1, 2020. It originally had been proposed as Feb. 1, 2020.

— Extending the program to businesses outside Tax Incremental District 8 to those within the TID umbrella area if allowed by the state legislature.

— Stating the assistance is offered to a business required to close or substantially limited its operations due to conditions and regulations as a direct result of the current COVID-19 pandemic. It originally had been proposed as “required to close or required to limit its operations.”

— Requiring businesses must have between 0 and 20 Full Time Equivalent employees at a Ladysmith location. It had been originally proposed without the FTE requirement and for any and all sites of operations.

Bob Grotzinger, owner of 211 Club, thanked the council for its decision.

“This is how government is supposed to work,” Grotzinger said.

Reynolds is scheduled to appear at this week’s Ladysmith Industrial Development Corporation to seek their involvement in the program.

The council is expected to consider moving funds from other TIDs into TID 8 to help fund the proposed COVID-19 Micro Business Emergency Relief Fund program.

Applications received by Friday, May 15 will be reviewed by the Community Development Committee on Monday, May 18. Applications received by Friday, May 22 will be reviewed Monday, May 25. Applications are to be submitted through the city administrator.

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