Staffers explain how Covid relief funds were disbursed

This summer, City Council rushed to provide economic relief to small businesses and nonprofits shouldering the burden of closures during the first few months of the Covid-19 pandemic. On Thursday, as they ratified a contract with the Better Business Bureau for services performed in awarding funding under three programs, Council members still had questions about who got what amount of money and why.

According to information provided by staff of the Economic Development Department, the BBB awarded more than $16.5 million in relief grants to small businesses, a little over $6 million to local nonprofits and more than $3.3 million to Austin creative workers. Council Member Kathie Tovo, holding a list of the recipients, said she could see one recipient who received $55, another who received $9,000 and another who received $40,000. All were within the same industry, she noted, and the same was true with other industries.

Looking at grants for nonprofits, more than 90 received $20,000 grants, including everything from Allison Orr Dance Inc., which does business as Forklift Danceworks, to the Austin Youth & Community Farm, which does business as Urban Roots; the Escuela Montessori de Montopolis; the Austin Geriatric Center; and Preservation Austin. Sunny Hills Pediatric Dentistry got the maximum grant of $40,000, while Trueheart Pet Care was awarded just $18.31. Tovo said she didn’t see how it could be cost-effective for the BBB or the business to receive a grant of less than $100.

She also questioned why the city had given money to a crisis pregnancy center and a dog breeder when the city is putting a lot of money into shelter for homeless pets.

Veronica Briseño, the city’s chief economic recovery officer, told Tovo that the city, not the BBB, established the criteria for those receiving grants.

Briseño explained that the disparate amounts were based purely on the receipts provided by the applicants. “So it was a reimbursement process and it depends on the amount of ask they had for eligible reimbursement.”

Briseño explained some of the smaller grant amounts by saying the city provided reimbursement for personal protective equipment and some businesses asked for those small amounts. She said the city had two separate programs, one of which was just for PPE. The businesses could have requested reimbursement from both programs, she said, but the small-business grant program was oversubscribed very quickly. She said because they had additional funding for the protective equipment, the BBB worked hard to reimburse businesses that requested money for those items.

Although Council heard from more members of the music industry on Thursday that they were dissatisfied with the way the BBB distributed the funds, and several Council members said they wished they could help the industry more, they voted unanimously to ratify the contract. By way of explanation, staffers wrote, “A contract ratification is approval of a contract after services are performed. These typically occur for emergency procurement purposes. Ratifying the contract is not the preference of city of Austin Purchasing Office. However, EDD utilized this procurement process to administer these grant programs due to the immediate and widespread economic need resulting from the global Covid-19 pandemic.”

The BBB received more than $1.3 million for administering nearly $26 million in grant funds. As staff explained, the BBB’s 5 percent administrative fee was considerably less than the fee requested by the other six candidates. Staff will now go through a new process to find an organization to administer funding from the city’s new Save Austin’s Vital Economic Sectors (SAVES) program.

Photo made available through a Creative Commons license.

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