SCHENECTADY — Up until Monday evening, relief for the city’s small businesses appeared to have stalled out after the City Council opted last week to delay the disbursement of federal emergency funds.
But Councilwoman Leesa Perazzo used a parliamentary tactic to force a vote at Monday’s City Council meeting, tacking an amendment onto an existing package authorizing the separate allocation of federal funds that ultimately passed.
Lawmakers voted 4-2 to sign a contract with a non-profit agency to distribute $250,000 in federally-awarded emergency relief funds as part of the CARES Act.
Small businesses will now be eligible to apply for micro-grants between $2,500 and $10,000 designed to help them navigate the economic fallout caused by the pandemic.
While ultimately successful, lawmakers exchanged heated barbs in a testy meeting on Monday, accusing each other of closed-door negotiations, ulterior motives and personal gripes that clouded the legislative process.
“I’m very disappointed Ms. Perazzo decided to include this,” said Councilman Ed Kosiur, who questioned a legal opinion provided by city Corporation Counsel Andrew Koldin that determined the tactic was legally permissible.
“All of the antics around this is just mindblowing to me,” Perazzo said, “I’ve never seen us operate like this.”
To get the funds flowing, the city needed to enter into an agreement with the Community Loan Fund of the Capital Region, who would help shepherd businesses through the formal application process.
City Council’s Finance Committee debated the measure last week, but tabled the resolution after a straw vote determined it wouldn’t pass out of committee.
Kosiur and City Council President John Mootooveren raised questions over administrative fees and if the list of businesses provided by the city was designed to be an exhaustive survey of potential recipients.
Perazzo successfully resurrected the resolution and had it added to a scheduled vote on whether the city should accept a plan drafted by City Hall in May on how to allocate $3 million in federal Community Development Block Grant funding to various community organizations.
That vote itself was delayed for months and fraught with controversy after Mootooveren attempted to submit modifications after the public hearing process.
Mootooveren contends McCarthy has routinely carved City Council out of the loop when it comes to important decisions that should be made jointly.
“The council is being sidelined by you and your staff,” Mootooveren said on Monday.
Despite the flap, small businesses are now poised to receive some relief.
Under the contract, the Community Loan Fund would use $27,500 to provide training, and $12,500 for internal administration fees.
The training is designed to provide technical assistance and other development tools would give applicants the skills to tap into additional state and federal funding streams.
Mootooveren last week questioned why the work couldn’t be done in-house, and how the city assembled the list of businesses, many of which are minority and women-owned business enterprises, or MWBEs.
The survey is only preliminary and is not intended to be an exhaustive document, said Avi Epstein, the city’s neighborhood stabilization coordinator, and was generated by leads in the city’s Affirmative Action Office.
Roughly 69 businesses responded, some of which submitted incomplete information, Epstein said.
McCarthy reiterated that the survey was a preliminary document that the Community Loan Fund could use as a starting point.
“This is a list of companies that might qualify for this proposal,” McCarthy said. “A lot of these businesses are overwhelmed by the paperwork or application process for some of the other programs that have come out at the federal level and even the state level.”
Kosiur had questioned why some businesses didn’t appear to be located in the city, and wondered about how the city advertised participation in the survey.
“This is not as black and white as folks are saying,” said Kosiur, who said he wouldn’t support the measure without seeing a full list of businesses that would definitively be awarded funding.
Councilwoman Marion Porterfield said it’s possible for one person to have multiple business entities, including some with addresses listed elsewhere.
Lawmakers, Perazzo said, should trust the Community Loan Fund to administer the program efficiently and effectively.
“They’re not only giving the business a fish, but teaching the business how to fish, which is a very important thing for small businesses,” Perazzo said. “It’s very, very valuable to them.”
Any businesses seeking funding would have to formally apply through the agency, which would vet them to determine their eligibility before making a final determination.
“The process of becoming a MWBE alone is so complex, being able to give our small businesses [training] would be a really good thing,” said Councilwoman Carmel Patrick.
To be eligible, businesses must be located within the city, have up to 50 full-time employees, and cannot be part of a national chain. Eligible applicants also cannot have any outstanding tax liabilities, tax liens or legal judgments, among other requirements.
The funds could aid 84 businesses asking for $2,500, and 21 seeking $10,000. The city’s Planning and Development Office split the number down the middle and estimated the package would likely assist 52.
Many businesses listed on the survey said they would use the funds to help catch up on bills and hire additional staff.
At one point last week, several members laughed with what appeared to be a sense of disbelief at the circular nature of the discussion, prompting Kosiur to chastise them.
“I just don’t think we know what we’re talking about and that’s unacceptable,” Kosiur said.
Kosiur and Mootooveren were against moving the resolution forward, while Finance Committee Chairman John Polimeni was supportive, joining Perazzo, Porterfield and Patrick.
Councilwoman Karen Zalewski-Wildzunas was absent from both last week’s and Monday’s meetings.
Perazzo said last week she was “flabbergasted” that lawmakers wouldn’t do something in their immediate power to help small businesses that have been on life support for the past six months, many of which may be in danger of closing permanently.
“What I’m doing is exercising a healthy democratic process,” Perazzo said on Monday.
Applications will open in October and funds will be awarded on a first-come, first-served basis until all funds have been dispersed.
McCarthy referred to the dispute as a “bump in the road” and urged lawmakers to come together.
Mootooveren was skeptical. “Working together,” he said, “only means working for you.”