Three weeks after Orange County supervisors voted to distribute $75 million in stimulus funds to small businesses struggling during the pandemic, most of the funds haven’t yet made it into businesses’ hands, though officials say the process is well underway and the money should be distributed by July.
Editor’s Note: As Orange County’s only nonprofit & nonpartisan newsroom, Voice of OC brings you the best, most comprehensive local Coronavirus news absolutely free. No ads, no paywalls. We need your help. Please, click here to make a tax-deductible donation today to support your local news.
Under the plan supervisors approved May 26 for federal CARES Act funding, the $75 million was split evenly among the five supervisors’ districts, with each supervisor deciding the process for distributing their district’s $15 million.
Supervisors Don Wagner and Michelle Steel opted to send their districts’ funds directly to cities, based on population size, to then distribute to small businesses. That money has since been delivered to the cities, with each city getting to decide its process for distributing the money.
The cities in their districts are in various stages of preparing to distribute it.
Irvine, the largest city in Wagner’s district, has received applications from businesses and has started allocating grants of up to $10,000 each, according to its assistant city manager.
In Huntington Beach, the largest city in Steel’s district, the City Council approved a framework on Monday for distributing the money, with officials planning to get the funds to small businesses by July 6 after an application process.
The other three supervisors – Lisa Bartlett, Doug Chaffee and Andrew Do – plan to distribute their district’s money through a process they’re each developing, without having cities administer it.
Bartlett said her South County district’s funding process will go live on Friday or Monday, with a five-day application period and plans to distribute the money by the end of this month.
“I’m very excited about providing grants to small businesses and nonprofits in the 5th District,” Bartlett told Voice of OC in an interview. She said it would be “an open and transparent process,” where winning applicants are selected randomly through a lottery-like process
“People can watch it live as we pull the names,” she said.
“I think the grants will really help the small businesses and nonprofits that have been affected by COVID. And this will help them restart their businesses and…their operations”
Supervisor Doug Chaffee is planning on a similar timeline and process for the $15 million for his northern 4th District, with applications open from Monday through Friday of next week.
Businesses that receive the funds “must comply with the requirements of the CARES Act [and show an] impact of the pandemic, such as having to let an employee [go] or a loss of income, for example,” Chaffee said in an interview Tuesday.
“We are limiting the help…to businesses that have 25 or fewer employees. There’s that type of thing. And if they qualify, if they show it, and it’s in my district, then we can approve them for up to $10,000 [per] grant.”
“I think the good news is, it’s all in play and it’s all happening quickly. So it’s all good news,” county CEO Frank Kim told Voice of OC on Tuesday.
For the $30 million in total the county sent to Wagner and Steel’s districts, county officials say they will not be tracking how it’s spent, for the time being. But they emphasize the cities have agreed to spend the money in accordance with the CARES Act rules, a few months from now the spending will be audited.
“We’re not tracking it because once the distribution to cities is done, the agreements specifies cities are taking the responsibility fo administering those grants,” Kim said.
“It’s all subject to audits. So there will be a time in the coming months where we’ll go out [and] there will will be a compliance review,” he added, saying the county is requiring the cities to have “good record-keeping.”
Asked if cities should be disclosing to the county more promptly how the funding is being spent, Wagner pointed to two safeguards he said are in place.
“One is the accounting, so we will see it at some point,” he said.
The second, he said, is the cities had to “sign agreements with the county” so that it would go to the specific programs the CARES Act says you can spend it on.”
“So we’ve got both an agreement from them and a requirement to report,” Wagner said.
Wagner, whose district’s funding went directly to the cities, said Tuesday he didn’t yet know how much of the funding has been distributed to businesses, but that the city managers have assured him they’re making progress.
“Every one of them assured me of their progress, and that their programs were up and running,” Wagner said. “I left it to them to administer.”
The county sent $5 million to Irvine for the small business grants, and the city has decided to devote $2 million of it for businesses that don’t generate sales tax, like dentist and doctor’s offices, and $3 million to businesses that do, like restaurants, said Marianna Marysheva, the assistant city manager, in an interview Tuesday.
The city received an “overwhelming number of applications” in the first two days, she said, and the city has already chosen 330 businesses in total to receive grants of up to $10,000.
“They will be receiving requested amounts, up to $10,000,” she said.
Huntington Beach received nearly $4.75 million in funding for the small business grants, with the application period scheduled to open next Monday, according to its city manager, Oliver Chi.
“We’re going to be providing grants up to $10,000 based on the size of the businesses locally, as measured by the number of employees folks have. We’ll have some eligibility criteria and priorities,” he added.
“We’re excited to get rolling with the program. And the City Council and all of us here at the city are appreciative of the opportunity the county has provided by getting these funds to us.”
Chi said the city will be transparent about which businesses end up receiving funds and how much they receive.
“Once we have that process completed, we’d be happy to share that information with you and the public,” he said.
Wagner said the process is going as fast as it possibly can.
“I think it’s proceeding as quickly as it could,” he said.
“Because you want to make sure that you are in fact complying with the Treasury Department regulations. But we were getting it out to the cities as quickly as possible, and I think they are a lot more flexible than I think the county is.”
Wagner said the process has been moving faster in his and Steel’s districts than in their colleagues’ who opted to not have cities administer the distribution.
“I think we’re ahead of the game,” Wagner said.
Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at firstname.lastname@example.org.