City commissioners agree to tweak in small business grant program to allow 28 other applicants to be eligible

Board members seek more details before allowing city manager to approve small number of ‘Community Impact’ grants out of same pool of funds

Editor’s note: The Sarasota News Leader is providing general reporting on the novel coronavirus to readers for free as a public service.

The Sarasota city commissioners and members of the staff participate in the June 15 meeting via the Webex software. News Leader image

After learning that some business owners in the city of Sarasota were ineligible for a grant program they approved on May 4, the city commissioners this week readily agreed to a tweak in the requirements.

City Manager Tom Barwin pointed out during the board members’ regular meeting on June 15 that 101 of the small business grants of $5,000 each had been awarded as of that date. Altogether, he said, the city received 339 applications. “The vast number who were ineligible,” he reported, were not within the city. “They just were confused about where they live.”

However, one other problem that arose, Barwin continued, was the fact that the criteria called for an applicant to produce a Local Business Tax Receipt (LBTR), showing that he or she had paid that annual fee as of March 1.

Twenty-eight applicants were not up-to-date with those payments, Barwin added. Therefore, staff was seeking commission approval for flexibility to let the business owners catch up on the tax and then become eligible.

“I definitely support that,” Vice Mayor Shelli Freeland Eddie responded.

“I am truly very much support of that expansion of help … as it impacts the community as a whole,” Commissioner Willie Shaw added. “There are a number of our businesses that are struggling to survive that would definitely benefit …”

Than Barwin announced that staff had a second suggestion for awarding more grants. That idea, he said, would be to provide funds to a small number of organizations that he characterized as providing “high positive impact to the community.” Barwin noted that approximately a dozen might be eligible through that initiative.

Shaw again offered his support.

Commissioner Hagen Brody concurred with the LBTR suggestion, but he said, “I’d like more information” about the other group. “I’m a little bit uncomfortable with that.”

This is one of the banners on the website of the Multicultural Health Institute in Sarasota. Image from the website

One example of a potential positive impact grant recipient, Barwin responded, would be the Multicultural Health Institute on Dr. Martin Luther King Jr. Way in Sarasota, where Dr. Lisa Merritt and Dr. Washington Hill are members of the board of directors.

“They do a tremendous job educating the public,” Barwin stressed, and they have been advisers to city leaders in regard to the handling of the COVID-19 public health emergency. Yet, the clinic did not meet any of the criteria for grant applicants the commission set in early May, Barwin added.

Brody then asked City Attorney Robert Fournier whether he would be comfortable if the board members gave Barwin flexibility for the proposed “community impact” grants. Before Fournier could answer, Brody added that he felt insufficient guidelines had been provided for such a disbursement of funds.

“This is the first I’ve heard of it,” Fournier replied. However, if members of a group were making the decision about those awards, and not just Barwin, Fournier said he felt the grants would be possible. He did cite the need for city staff “to be objective and fair.”

City Commissioner Hagen Brody participates in a commission meeting in early January. News Leader image

“I think there needs to be a little bit more objective criteria to protect the city on that issue,” Brody said.

At that point, Vice Mayor Freeland Eddie asked whether Barwin were proposing to open up the grant program to nonprofits, since such organizations were excluded under the original guidelines.

She would be concerned, she continued, if nonprofits were able to get funding; yet, the commissioners declined to allow professional services — such as attorneys’ and CPAs’ offices —to be eligible for the first round of grants, in spite of her making an argument to include them. “We thought we wouldn’t have enough money …”

“I was thinking maybe a max of five grants” for the community impact awards, Barwin said, which would add up to $25,000. “Some might be not-for-profits …”

“That’s my concern,” Freeland Eddie told him.

“I think a lot of people did not apply because they assumed they did not meet the criteria in the application,” she added. “I would really like to have some more information about what the new scope of funding is going to be,” Freeland Eddie said.

Brody called for the commission to allow flexibility for late payments of the business tax, as Barwin initially proposed. However, Brody said, “If we’re going to do something for nonprofits or home-based [businesses],” staff could suggest criteria for such applicants and then the commissioners could vote on the idea.

At that point, Deputy City Manager Marlon Brown explained, “We have been a little bit flexible” in regard to when applicants paid their business tax, “if they meet all of the eligible criteria.”

However, Brown continued, “One of the issues we’ve run into” involves people such as barbers and hairstylists, who rent chairs in businesses owned by other people. “We would like guidance to make them eligible.”

No board member addressed that.

Finally, Barwin said, “I hear consensus” regarding flexibility with the late payments of the business tax. Further, as he understood it, he continued, the board members wanted more details about criteria for the community impact grants.

“Yes,” Mayor Jen Ahearn-Koch replied.

More details about the grants already awarded

This chart shows the types of recipients of the city grant program for small businesses. Image courtesy City of Sarasota

In a June 15 report to the commissioners, Steve Freeman-Montes, the former city Sustainability Program manager who has been named interim manager of the Economic Development Department, provided a number of other details about the awards through the city’s small business grant program.

As of June 9, the report said, 100 checks had been produced for businesses, and those totaled $450,444.57.

Another 20 applications were under review, the report added.

Of the grants approved, the report continued, five checks were produced for businesses in the Newtown Community Redevelopment Area (CRA); they added up to $22,000.

Another 47 checks totaling $210,606.57 had been produced for applicants that were outside the Newtown CRA or the Downtown Sarasota CRA. The funds for those businesses came out of the account containing the revenue from Local Business Tax Receipt (LBTR) payments.

This chart shows how applications for the grants were processed. Image courtesy City of Sarasota

Finally, 48 checks had been produced for businesses in the Downtown CRA; those totaled $212,838.

The disbursements had drained the Downtown CRA account, the report noted, so $2,229 was taken from the LBTR fund to cover the gap for those checks.

The LBTR account had $1,350,000 when the commission authorized the grants on May 4. Thus, $1,139,393.43 remained in that fund as of June 9, the report said.

In the Newtown CRA fund, $702,000 was left as of June 9.

The category representing the majority of grant recipients comprised salons, barbershops, spas and massage therapists, the report noted. Altogether, such applicants had been paid $141,989.57.

The category with the second-highest number was “Retail,” with 30 recipients having received $139,260. In third place, owners of 17 cafes, restaurants and bars had been awarded $76,600, the report said.

The first checks were produced on May 27, the report added; the grant program “went live” on May 19.