City Council designates $460,000 to meet hunger needs of residents, can’t streamline process enough to offer relief to businesses
VISALIA – A month into the state’s medically induced coma, councilmember Greg Collins asked city staff to come up with ways to help businesses and residents struggling with income losses during the pandemic. Last Thursday, May 7, Collins was able to make a motion to fund local food banks trying to put food on the table but nothing to keep businesses from wasting away.
During public hearing on the subject, Visalia resident Amy Rickman said both of the council’s efforts were symptoms of the shutdown, and the only way to cure people of hunger is to reopen the economy.
“None of these problems exist if people were able to go back to work,” Rickman said. “If people need food, let them go to work.”
Finance Director Renee Nagel said staff looked into using $14 million in funds received through the federal stimulus package known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act. All but $767,000 of the funding was already being used to offset costs incurred during the government shut down for the Visalia Airport, Visalia Police Department and Visalia Transit. The remaining funds are part of the Community Block Development Grant (CDBG), a flexible pool of money that can be used to supplement service programs, businesses or individuals.
In order for the city to use CDBG funding to help businesses, Nagel said they had to fall into one of two categories: 1.) a microenterprise, owned by someone considered to be a low to moderate income household and consisting of five or fewer employees; or 2.) a special economic development activity, such as creating or retaining at least one full-time job for a low to moderate income worker.
Staff said the CDBG funds could be used to grant between $25,000 and $35,000 to up to 20 small businesses to retain workers. Councilmember Brian Poochigian suggested cutting down the grant to $10,000 to help three times as many businesses and Vice Mayor Steve Nelsen said some small businesses only need $5,000, enough to pay rent and utility costs during the months they were closed.
“Cosmetologist pay $250 for a chair that they can’t put someone in,” Nelsen said. “If I gave them $5,000 that gives them five months they can keep their business.”
The only problem, Nagel said, is that businesses wouldn’t see any of that money at least until July and possibly as late as September, and only if everything went smoothly without delays.
“How other cities within the area, some way, some how, taking CARES money and giving out as grants?,” Nelsen asked. “Why is it that when we look at it, there are all these strings attached? What we hear is roadblocks and entanglements.”
Claudia Calderon, a houseing specialist with the City of Visalia, said other cities started their relief efforts with local funding and not grant funding and then find ways to reimburse themselves or forego budgeted items to cover the cost. She also suggested cities have tried using CDBG funds for microenterprise loans in the past and they were unsuccessful because businesses had to track and report their expenses two years after the money is received. Councilmember Phil Cox said he looked at a similar program for his own business and calculated it was going to cost him $15,000 in staff time to get a $10,000 grant.
“I understand what [staff] are saying,” Cox said. “When we opened up the requirements it was beyond reach for us.”
Instead, city staff encouraged the council to use the a majority of the CDBG funding to support food programs at local food banks. They identified eight local agencies that operate food programs serving Visalia residents including the Bethlehem Center, Central California Food Bank, Food Link of Tulare County, CSET, Love Inc. of Tulare County, Salvation Army, Visalia Emergency Aid Council (VEAC) and the Visalia Rescue Mission. Those agencies reported seeing a 50% increase in food requests since the government-mandated shutdown began. That equals an additional $70,000 in food needed to serve the growing demand. In order to allocate most of the $767,000 in COVID-19 relief, the city council approved $460,700 in funding for local food banks from June through December.
“Food service approach using eight agencies is a good first step,” Collins said. “Folks are hungry today, but it’s difficult to say hold on until July 1. It is a proactive step and a great safety net.”
Collins asked that staff look into using the remainder of the money to fund rental and utility assistance programs through organizations like CSET and a dozen other nonprofits providing funding through the federal Emergency Food and Shelter Program (EFSP). The program recently announced annual funding will be distributed to local agencies in June. Staff said a family of four would quality if they were making 80% of the household median income, or about $51,800 per year as of April 1, 2020.
“Do people realize they are in that low/mod income bracket?,” Cox asked. “I don’t know that government’s done a great job of that. There needs to be an effort to get the word out that they qualify for some of these existing programs.”
Groom clarified that funding could only be used for meals served in Visalia and only served to Visalia residents. “This is not giving money to an organization to do what they normally do, this is for a specific program in addition to what they do,” Groom said.
Food relief was also the shorter of the two timelines. The nearly half a million dollars set aside by the council for food relief wouldn’t be available to the food banks until the first week of July. That timeline includes creating the request for proposal almost overnight, reducing the public comment period from 30 to five says, council approval of the new plan at its next meeting on May 18, submitting the documents to the state and awarding the money at a city council meeting after it has been published in newsprint and execute agreements with organizations awarded funds.
“It blows my mind, when you start talking about acronyms, and the crap and paperwork you put up with in government,” said Harold Myers during the public hearing. “You have to be educated on all of this stuff just to talk to your own staff.”
The city council will review the amended spending plan for the CDBG funds at its May 18 meeting.