Remaining assistance funds marked as utility grants


Cottage Grove’s Small Business Emergency Loan Program funds are finally drying up as about $17,000 has been earmarked for distribution into the community in the form of utility grants for small businesses.

The City of Cottage Grove, partnering with Community LendingWorks, has made the last of these funds available through the Small Business City Utility Assistance Grants program.

Applications will be accepted until Friday, April 30 at 11:59 p.m. and can be found online at com munitylendingworks.org/emer gency-grants-cottage-grove.

“This will completely wipe out the fund,” said City Manager Richard Meyers of the small business grant and loan program, which was set up last July.

The Small Business Emergency Loan Program launched last year as a $100,000 fund to help Cottage Grove businesses weather the economic hardships created by COVID-19 restrictions.

Predictably, the grant portion of the program found more popularity than the loans and the seeming hesitancy for small businesses to take on more debt recently triggered the city to work with Community LendingWorks to convert the loans to grants.

Eligibility for the last of the aid money requires the following criteria be met by small businesses:

• Be located and headquartered within Cottage Grove city limits;

• Have no more than 20 employees;

• During any month within the period of March 1, 2020 to present day the business was forced to close by executive order from the Governor of the State of Oregon, or was impacted by mandated COVID restrictions on capacity/operations, or experienced a reduction in sales compared with the same month in the prior year.

Businesses will be eligible for a grant award in the amount equaling the sum of eligible utility bills incurred with the City of Cottage Grove during months in which the business was impacted, up to:

• A maximum of $1,000 for business which were forced to close by executive order, or;

• A maximum of $400 for businesses which were impacted by mandated COVID restrictions on capacity/operations, or experienced a reduction in sales compared with the same month in the prior year (these amounts are tentative and subject to change per demand).

Applicants must include copies of all utility bills incurred by the business with the City of Cottage Grove during periods when the business was forced to close by executive order and/or impacted by mandated COVID restrictions.

Utility records may be obtained by contacting the City of Cottage Grove at 541-942-3346 or at [email protected] cottagegrove.org.

In creating the Small Business Emergency Loan Program last year, the city chose to grant the third-party Community LendingWorks stewardship over the program’s funds.

During a May 11, 2020, city council meeting, councilors Mike Fleck, Greg Ervin and Candace Solesbee declared conflicts of interest as their organizations or businesses could hypothetically qualify for the loan program.

Though Fleck and Ervin said they had no intention of applying for the program, Solesbee said her businesses would.

City Attorney Carrie Connelly weighed in at the time: “I actually believe that Councilor Solesbee has a ‘potential’ conflict of interest because even if she’s planning to apply, there’s no guarantee that she would be awarded. Therefore, I believe that it’s fine that she’s participating [in the discussion],” she said.

Meyers added that the third-party administration of the funds by Community LendingWorks supported this as it removed bias from the process.

Cuts to a planned “visioning” project, city layoffs due to COVID and taxes from alcohol, cigarette and marijuana sales contributed to the city’s ability to establish the fund, said Meyers in an interview with The Sentinel at the time.

Around a quarter ($25,414) of the funds were set aside as grants and established as a matching grant with Business Oregon in hopes of bolstering aid opportunities. The remaining $74,500 was made available as loans to the community.

Initially, the grant portion was established by Lane County and Community LendingWorks in partnership with the cities of Coburg, Cottage Grove, Creswell, Eugene, Florence, Lowell, Springfield and Veneta and it wasn’t until December that the online portal for application to the grants opened.

When it did, the grant portion had fortuitously been matched to a higher ratio that initially expected and a total of $85,000 was made available to Cottage Grove.

While the city reported that the grant money was quickly used up in 11 grants to local businesses, the loan fund found a less enthusiastic response as only four businesses opted to take on debt and just $40,000 in loans were distributed through the program.

With just under $35,000 sitting in the loan fund unused and local businesses still in need of aid, the program became part of a city discussion about addressing local financial needs.

In February this year, the Cottage Grove City Council approved an assistance package which, among other aid measures, proposed that $15,000 be taken out of the loan fund and used for Community Sharing’s H20 program, which helps residents with water and sewer utility bills.

Councilor Fleck, who is also executive director of Community Sharing, stated in a Feb. 22 city council meeting that he did not have a conflict of interest in the matter.

“Community Sharing is where I am employed, but every dollar of the H20 Program goes directly to the client,” he explained. “Our agency does not receive any sort of administrative fee for doing that.”

The H20 Program, which has served the area for nine years, offers utility assistance to Cottage Grove ratepayers who are in jeopardy of having their water shut off by the city due to outstanding bills.

The program is funded almost entirely through donations from ratepayers, who produce an average of about $1,000 in assistance per year.

As part of the city’s new assistance package plan, the remaining funds stayed with Community LendingWorks to be converted to a grant fund to assist local businesses with utility costs under the Small Business City Utility Assistance Grants Program.

City staff estimated that just under $17,000 should be available after administration fees incurred for issuing the grants.

Meyers emphasized the need for the grants as some businesses must pay a stormwater fee alone of $350 a month (due to large, impervious surfaces on the properties) while remaining closed, which has significantly burdened them financially.

Community Blowback

However, controversy arose on social media this March when members of the public demanded to know who in the city had received money through Community LendingWorks.

Much of the dust-up started when Cottage Grove resident Duane Taddei posted an image of the city’s $100,000 check to the Springfield-based Community LendingWorks, a document which he obtained through a public records request.

The posting caused some unintended consequences, however. As nothing on the check had been redacted, the image included the city’s bank account number and check format, information which could compromise the city’s account.

As a result, the city worked quickly with the local branches of Banner Bank and Umpqua Bank to change its financial information.

Taddei explained in an interview with The Sentinel that he would have covered the pertinent information if asked and that his motivation was to create dialogue among other residents.

“My concern is that we, the taxpayers of the City of Cottage Grove should know where this $100,000 of tax money went – who it went to,” he said. “In an effort to get people interested in the issue – so that we could try to get some more information – I decided to share that on Facebook.”

The strategy seemed to have struck a chord as nearly 100 comments quickly sprang up on the thread. Commenters were highly critical of the city’s move and speculated on a range of ways in the which the money had been misused, including that the money had been directed toward the businesses of councilors and their friends.

Many commenters, too, were unclear on the nature of the program, confused as to whether the program was used for loans or grants while one commenter even asked why Cottage Grove was sending taxpayer money to the City of Springfield.

Commenters on the thread also posted images of their attempts to contact Community LendingWorks and get the names of businesses who received loans and grants.

The nonprofit replied to at least two commenters stating that it could not release the names of businesses as it was a “privacy issue,” fueling speculation among social media users that the nonprofit was hiding information.

In response, the Cottage Grove City Manager issued a public statement clarifying that Community LendingWorks, though a nonprofit, is also a Community Development Financial Institution (CDFI).

A formal CDFI certification is awarded through the U.S. Department of the Treasury. CDFIs typically have a local focus on communities underserved by the traditional banking sector, but the certification can be applied for by banks and credit unions as well.

“Just like any other credit union or bank, they protect the confidential information associated with their clients,” stated Meyers in the letter. “Just as anyone with a loan with a credit union doesn’t want their loan amount, payment information or financial history given out freely, the customers of a CDFI are protected the same way. You as a member of a credit union cannot demand that the credit union tell you who is borrowing money that is deposited with them.”

Meyers has separately noted that even the city does not know who has received funds through the nonprofit.

For more information about Community LendingWorks, visit communitylendingworks.org.

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