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La Mesa allocates bulk of CARES funds to businesses

On July 18 the La Mesa City Council voted to accept and appropriate $1.8 million in CARES Act funding, asking staff to come back to council with a proposal that would also create a rental assistance program.

On Aug. 11, the council reviewed a proposal that proposed $600,000 for a rental assistance program, $600,000 for businesses and $600,000 for city costs.

Council members and community members moved to give more money to local small business.

Council member Kristine Alessio motioned to give $1 million to businesses, $400,000 for rental assistance and the remainder to be utilized by the city. The resolution passed 3-2, with council members Colin Parent and Akilah Weber voting against the resolution.

Dozens of community residents and businesses requested that more fund be allocated for small businesses, with more than 35 requesting a specific amount of at least $748,408, the same amount proposed at the July 28 council meeting.

Many commenters requested a significant portion for rental assistance.

“The CARES Act should be utilized for needy citizens’ rent relief and instead reallocate funds that would have been spent on supporting events or parking meter revenue to assist businesses,” said La Mesa resident Angela Burke.

La Mesa Chamber President/CEO Mary England said the COVID-19 pandemic put the majority of La Mesa’s business sector and their employees out of work.

“The need could never be greater for the businesses to receive a significant portion of the $1.8 millions of CARES Act funding the city is receiving,” she said. “That is why I support the City Council agenda item from July 28 that proposed an allocation of $748,408 of CARES Act funding to establish a business grant program.”

Alessio said that businesses requested massive aid and  $600,000 was a “giant shortfall compared to neighboring jurisdictions.”

“We are not going to have a village if there are no businesses and we are not going to have sales tax revenue if there are no businesses. It is already dropping,” she said. “But I think that most people would like to keep their businesses, be able to pay their rent and be able to earn a living. I think we should go with about $1 million for businesses to start, $400,000 for renters and the rest to the city. If there is anything left in any fund, it is transferred to another assistance fund.”

Mayor Mark Arapostathis seconded her motion.

Parent said more than 500 residents have already sought assistance through the city of San Diego, which they are not qualified to receive, so the need is out there.

“I think this is good. A good balance of what I think are goals for the city and diverse community,” said Parent. “We do need to help support our businesses, but we also need to look out for our residents too. I think a fair split between the three is the most equitable way to address these issues. I’m going to vote against the motion.”

Parent suggested additional changes to the proposal that entities awarding businesses should affirm and structure the program to ensure it will not preference its own members and that the program include a prohibition of funds awarded to businesses owned by any person or direct family members who are employed or serving as a volunteer for the entity awarding relief, city of La Mesa staff and elected officials. Council agreed with adding the language to the motion.

Council member Bill Baber said he looked at the allocation more as a sequence rather than a pie chart distribution.

“First, who needs it the most? It would be renters,” he said. “Who needs it second most is businesses. Third in line would be the city. I see it as rushing emergency care where it is needed first. I’d rather the city take the hit than helping residents and businesses in the city. I think that the city can absorb the hit better than our businesses.”

Weber said she supported giv–ing more money to the businesses and rental assistance programs.

“I think it says a lot to the residents of our community about what we value as a City Council to give a significantly higher portion to our businesses rather than to our residents,” she said.

Weber said she would vote against the proposal because she that the funds allocated to businesses and people should be equally distributed.

La Mesa has $1,810,108 in CARES Act funding from the County and the State. The $1,061,700 from the County has to be spent by Sept. 30 and the $748,408 from the State has to be spent by Oct. 30. Any unused funding must be returned.

The Business Assistance Grant Program would be handled by the East County Economic Development Council at a cost of $10,000, providing $5,000 towards qualifying small businesses.

The Rental Assistant Grant Program would provide up to $5,000 per eligible household for rent and utility costs covering a 90-day period. Payments will be paid directly to landlords and utility companies. Estimated costs to administer the renters assistance program is approximately $80,000. A nonprofit has yet been selected to administer this program and staff recommended the State allocation be utilized because it provides the Oct. 30 deadline to spend funding.

Source: East County Californian

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