Merced approves $2M recovery plan to help residents, businesses with loans, other needs
Merced City Council this week furthered its ongoing initiative of breathing new life into the local economy by moving forward with several components of its COVID-19 recovery plan.
The plan seeks to help local business owners and residents who have suffered due to state-mandated closures and rising unemployment during the pandemic.
Meanwhile, the county’s coronavirus tally rose by eight cases Wednesday to 234 total, according to Merced County Public Health. Of those, 89 are active, 139 are recoveries and six people have died.
The City of Merced leads the county’s affected communities with 84 total COVID-19 cases.
City Council set the economic recovery plan in action at a previous meeting by deferring transient occupancy tax payments for area hotels and motels that have been hit hard with vacancy during the pandemic.
“Through this program, we tried to reach as many people as we could,” City Manager Steve Carrigan told the Sun-Star. “Everyone is working on it because we have to go fast,” he added.
The five-pronged plan totals just over $2 million, paid through a combination of funding sources available to the city. A private philanthropist has also made a verbal commitment to pitch in $250,000.
Merced County was approved by the state this week to open more facets of its local economy with modifications as part of Gov. Gavin Newsom’s staged reopening. But business owners say they are not yet out of the woods from the havoc wreaked by COVID-19 closures.
“They’re grateful to be able to open, but there’s still financial hurdles they’re going to need to overcome,” said Merced Assistant City Manager Stephanie Dietz, noting that the city’s burgeoning aid programs are still very much needed. “They’re not jumping back into business as usual.”
Aid to business owners, residents
The city is expected to receive $661,246 in federal money for a special allocation of Community Development Block Grant Coronavirus (CDGB-CV) grant funds, made available by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
This allows the city to invest locally — without impact to its general fund. The seven-person City Council unanimously voted to allocate the CDGB-CV funds to target small businesses, residents and the needy.
“Food, jobs and housing — three very, very worthy areas to put our money,” said Councilmember Matthew Serratto at the meeting.
The plan includes $500,000 in CDBG-CV funds for supporting new or existing small businesses with loans or grants. The money is intended to create, keep or rehire local jobs for low-to-moderate income business owners and employees.
“In order to make sure that you are effective against the recession, you need to keep people employed,“ said Councilmember Anthony Martinez at the meeting. “I see a city up the road that is able to use funds and dedicate them to businesses so businesses can keep people on the payroll and not fire them,” he added.
Another appropriation of $100,000 in CDBG-CV funds provides rental and utility (electricity/gas) payment aid to keep residents housed and prevent increased homelessness.
Area food banks will receive direct assistance totaling $100,000 to handle increased operating costs due to the increased demand for food support. Demand has increased four times the normal need, according to the city.
Some funds are left over to be allocated where most needed at a later date, city officials said.
City Council approved the funding allocations to move forward, but contracts with vendors to facilitate the programs must still be drawn up. The contracts are anticipated to be finalized soon and will come before City Council at its June 1 meeting.
The city will provide information on its website about how to benefit from the small business, rent and utility programs once they’re finalized. Those interested must go through a financial evaluation and meet certain criteria, like demonstrating that they haven’t received any other coronavirus-related funding, said Merced Finance Officer Venus Rodriguez.
The city has heard from several local businesses that state and federal aid opportunities dried up before they could benefit, Dietz said. City officials say these are the businesses they especially want to reach.
“We’re trying to reach the folks that need it the most,” Carrigan said.
Utility aid to all
In addition to those in need, all individuals with a City of Merced utility account will soon see some payment relief. City Council unanimously passed a one-time $25 rebate for water and sewer services.
Each residential, commercial and industrial water and sewer account will see a $25 reduction to their June utility bills.
Merced administers about 22,000 water and sewer accounts, according to city officials.
Applying the rebate to each of these accounts incurs a total $1.1 million impact on the Water Operations Enterprise Fund and the Wastewater Operations Enterprise Fund.
Voucher program on the way
Still in the works is a voucher program for small businesses - an initiative spearheaded by Mayor Mike Murphy. The idea will be finalized by the next City Council meeting on June 1, where it will come before council as a contract with the digital gift card marketplace Giftbar, Dietz said.
Carrigan described the platform as a virtual mall. “It’s really a neat function,” he said.
Giftbar will host a website for interested Merced businesses to enroll and market their products. Between administrative costs, fees and promotional materials, the program is estimated by city officials to cost $37,000.
The city will provide funding for each Merced resident to receive a promotion code for a $25 electronic gift card to be spent on the site, ensuring that cash is invested locally. The code will expire after a set number of days, making sure the money quickly goes to Merced businesses in need.
Patrons outside of Merced can access the site as well, but will have to use their own dollars, Dietz said.
The anonymous philanthropist’s $250,000 donation will go toward the voucher program. City Council is expected to match the donation with economic opportunity funds.
This story was originally published May 21, 2020 at 5:01 PM with the headline "Merced approves $2M recovery plan to help residents, businesses with loans, other needs."
