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Council split on federal funds for businesses, housing

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Last edited 1:49 p.m., June 3, 2020

Springfield City Council members last night widely disagreed on how the city should use $916,000 of coronavirus relief funding from the U.S. Department of Housing and Urban Development.

After an hour and a half of deliberation and testimony, council was still split on how the funds should be dispersed among business and affordable housing services.

Planning and Development Manager Brendan Griesemer said city staff surveyed residents during the first week of May and found that rent and mortgage assistance was considered a top priority. Business assistance was identified as a second large need in the community amid the COVID-19 pandemic.

The city staff recommended that $403,000 be allocated to businesses, $330,000 to public services and homelessness efforts, $45,600 to affordable housing assistance and roughly $137,500 to a COVID-19 contingency plan, according to bill documents. However, Griesemer said $200,000 also is in the pipeline for housing assistance through separate federal grants outlined in the fiscal 2019 and 2020 budgets.

“We were trying to implement these funds with the greatest impact,” said Griesemer. “With a $10,000 loan … for an average business of 10 employees, that would help 10 families … whereas, using that as a rental assistance, while much needed, would help maybe three or four families.”

Councilman Craig Hosmer opposed the city’s plan, saying housing assistance should be a top funding priority because it was identified as the key issue in the resident survey.

“If someone rents their property, that money is going to a business owner,” Hosmer said. “We have a significant problem with poverty in this city, and we talk about it a lot, but this is an actual opportunity to put our resources where we’ve been talking about.”

Councilman Richard Ollis spoke in favor of prioritizing business assistance, adding that helping companies stay open also keeps people employed.

“I fully support rent and utility assistance. I think it’s critical – I just think the vehicle to get there is more effective by supporting small businesses and keeping them in business,” Ollis said.

Several residents spoke against the bill in its current form, citing concerns of being able to make rent amid the coronavirus pandemic because of related job loss.

“It’s time to prioritize the basic needs of families all over Springfield, and it’s high time that our budget actually reflects those priorities,” said Victoria Altic, a Zone 4 resident.

Springfield Area Chamber of Commerce President Matt Morrow said federal grant programs, such as the Paycheck Protection Program and the Economic Injury Disaster Loan program through the U.S. Small Business Administration, were helpful to some local businesses but not all. Griesemer said the city found in its survey that half of its respondents applied for an SBA loan, but 57% of those applicants were denied the federal funding.

“By most estimates, for more than half of small businesses, it wasn’t a fit or they ran out of dollars or were unable to get the loan,” Morrow said of the federal assistance. “Many of those are on life support right now and could really benefit from this support, and it may actually be the difference between those businesses surviving this or not surviving.”

Morrow suggested prioritizing minority-owned businesses with the funding.

“You’ll never have enough money for all of the rental assistance if we continue to have people losing jobs at the pace they’ve been losing them,” he said.

The Missouri Department of Economic Development recently reported that April’s unemployment rate rose to 9.7%, which was more than double that of March. The department also reported 305,100 job losses over the month of April.

Hosmer moved to give equitable funding to businesses and affordable housing services, which failed 5-4 with Mayor Ken McClure’s vote as the deciding factor. Hosmer then moved to table the bill to allow council members to further consider the proposed allocations, which was approved 6-3. Council is scheduled to reconsider the proposal on June 15.

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