The Mobile City Council will consider at its next regular meeting approving funding for a grant program to help businesses that still shut down due to the Safer at Home order Gov. Kay Ivey issued April 28.
At a special called meeting on Friday, the council delayed a vote to amend the 2021 budget to allow for the appropriation of $500,000 from the city’s reserve funds that would go toward the program. Councilors wanted the resolution reworked to specify the grants were to be used for payroll.
“They really could not approve it today,” Mobile Mayor Sandy Stimpson said of the council. “The deeper we got into the law we decided we could not pull the trigger until certain thresholds had been met.”
The resolution has to be advertised for seven days due to state requirements and the council has set a public hearing for Tuesday, May 12. Stimpson said he’s hopeful the city can begin taking applications for the grants, following the council’s approval of the funds on Tuesday, May 5.
The grant program, introduced by Stimpson, sets aside a total of $500,000 for businesses impacted by Ivey’s latest health order, which allowed retail businesses and beaches across the state to reopen but did not lift previous limitations preventing close-contact services like barbershops, nail salons and tattoo parlors from opening.
Eligible businesses would have to have a current license with the city of Mobile and couldn’t have more than 25 employees, Stimpson said.
“Not sure why we said 25 employees because there are very few of these businesses that have 25 employees,” Stimpson said in a zoom call with reporters after the meeting. “When you start looking at the businesses we’ve listed in the resolution, very few of them are going to have 25 employees.”
Businesses that have received federal Payroll Protection Program (PPP) money, or independent contractors who have received unemployment benefits would also not be eligible, according to Stimpson said.
“We went through looking at licenses with qualifying factors to start projecting how much money the city would need to expend,” Stimpson said. “We decided $500,000 would be set aside for distribution to those who qualify.”
There is the possibility that businesses who’ve applied for PPP, but have not yet received the funds could get the city’s grant and then receive the federal money, according to city attorney Ricardo Woods. However, he said those instances “would be few and far between.”
The grants would be awarded in amounts from $1,500 to $2,500 depending on the number of employees at the business.
“If this was not an urgent situation, we would not have asked for this special meeting,” Stimpson said. “There are some who have not had a paycheck in seven weeks and are desperate.”
Stimpson said restaurants were excluded because they have not been forced to close. The close-contact businesses that still remain closed under Ivey’s order would be the ones eligible for the grant assistance including barbershops, salons, bowling alleys, entertainment venues, nightclubs, tourist attractions and others.
Among the concerns for councilors was the lack of language specifying that owners would have to use the funds for payroll. Stimpson and Woods said they did not have a problem with adding that language into the proposal.
“This is meant to go to people who have not gotten a paycheck, Stimpson said. “Not to pay utilities.”
Stimpson said the administration thought that pressure alone would force employers to pay employees with the funds.
While it’s unclear what the wording of the new resolution will be, Councilman John Williams suggested just requiring owners to provide paperwork after the fact to prove they spent the money on payroll, similar to what the federal government has done with the PPP.
“I like the program, but it does need some kind of safeguard,” Williams said.
When asked by Councilman Fred Richardson how the city would contact eligible businesses, Executive Director of Finance Paul Wesch said business license applications list current contact information. That information would be used to contact the businesses.
While the city hasn’t yet asked for an official opinion from Attorney General Steve Marshall on whether it has the authority to award the grants, Stimpson said his administration has been in contact with Marshal’s office. Previously, Marshall told Mobile County Commissioner Connie Hudson a similar plan to help county businesses wouldn’t be allowed under state law.
Council attorney Chris Arledge told councilors that they have the authority to award the grants because of a clause in the state constitution that allows for grants that serve the “public good.”
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