Orange County Supervisors are split on how to bailout small businesses hit hard by the novel coronavirus business shutdowns, tapping into some of the $554 million federal relief money the county received earlier this month.
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While Supervisors unanimously agreed to allocate $26 million to reimburse OC cities for virus-related costs, they were split over who should administer their $75 million bailout fund for small businesses.
Supervisors Michelle Steel and Don Wagner argued that the money should be sent to cities, which can disburse the money to small businesses.
“My strong recommendation is the approval of the item that is now before us,” Wagner said at Tuesday’s meeting. “To deliver this money right away, expeditiously, into the hands of our mayors, city councilmembers.”
He cited a letter signed by 31 mayors supporting the move.
“I urge that we agree with 31 of the 34 mayors.”
“We’ll boost our economy and most importantly provide essential jobs because every private sector job is essential,” Steel said.
But Supervisors Lisa Bartlett, Doug Chafee and Andrew Do said the County should be more involved in the process, while also including nonprofits and food distribution.
They also said the needs change between supervisor districts and his proposal addresses that.
“I should not be bound by the same criteria because the needs in my district are so different,” Do said.
Supervisor Lisa Bartlett also said there needs to be flexibility in the bailout spending.
“I think it provides for a more equitable way to get the funding out to really help the small businesses,” Bartlett said.
She also said the money should be used for long-term funding.
“I want to make sure all of our small businesses are taken care of, not just for the short term,” Bartlett said. “Let’s leverage those dollars … to make sure they can tap into some credit, some long-term loans.”
Wagner and Steel disagreed.
“It isn’t our money to leverage, it isn’t our money to play with,” Wagner said. “We aren’t talking about anywhere near enough money to establish a line of credit, we’re talking about helping you pay the rent tomorrow.”
Steel said there’s many questions about how the County will administer the money and that businesses need the money right away to get them restarted.
“You won’t trust five of us to make a criteria, but you trust 34 cities to make a criteria?” Do shot back.
Steel responded, “How is the CEO going to administer?”
She asked County CEO Frank Kim how fast he can move on the issue.
Kim said he will hire an outside consultant to help him formulate a plan and could come back next week for board approval.
Chaffee said the move could help remove some of the political variables.
“I like the idea of the independent administrator and we have some fairness and take some politics out,” Chaffee said. “I think an independent administrator of this fund would be the best way to go.”
The board ended up voting 3-2 for the independent administrator approach to distribute the $75 million bailout package. Steel and Wagner dissented.
“It’s going to be much less money for the businesses,” Steel said, citing overhead costs. “There’s a simple way to do it without actually hiring administrators to give out the money.”
Bartlett countered and said cities would’ve hired independent consultants to help dole out the money if the board went for the original direct allocation proposal from Steel and Wagner.
“It’s better to have one adminstrator than it is to have 34 administrators,” Bartlett said.
There were some initial questions about when the Supervisors would meet next to discuss the proposal, with Steel hinting that the board won’t meet next week.
Until Do questioned the wisdom of that approach.
“With the possibility of opening up the county, we’re going to go a week without having a meeting? That makes no sense.”
Supervisors are expected to meet in the later half of next week to discuss the $75 million bailout.
Meanwhile, the stay home orders have decimated Californians income.
Last week, Newsom said he expects a nearly 25 percent unemployment rate at some point this year and the state is facing a $54 billion deficit.
There were 1.5 million OC residents employed in March, before the pandemic began, according to state employment department numbers. It’s still unknown how many people in OC still have a job.
Spencer Custodio is a Voice of OC staff reporter. You can reach him at scustodio@voiceofoc.org. Follow him on Twitter @SpencerCustodio.