When Luzerne County announced coronavirus funding awards to small businesses in January 2021, it was a festive occasion.
A total 679 county businesses received nearly $7.1 million of the county’s Coronavirus Aid, Relief and Economic Security (CARES) Act funding, and some were showcased during a press conference at the Mohegan Sun Arena in Wilkes-Barre Township.
That’s not what happened with small businesses in the county’s federal American Rescue Plan awards — at least not yet.
Only 21 businesses were in the mix of 113 outside awards approved by a council majority on March 28, prompting questions of why the county did not make it clear to all businesses that they could apply.
The county had publicly announced applications were being accepted last August and worked with a consultant to hold virtual informational sessions and create an online portal containing program details and required forms.
But while assistance to small businesses was cited among the possible uses in the general announcement, the county did not actively promote the applications to small businesses, resulting in few applicants aware of the possibility.
CARES policy compared
In comparison, council had agreed to carve out $8 million of the CARES funding to create a special program solely for small businesses in 2020, when C. David Pedri was manager.
There were clear eligibility guidelines, such as 15 or fewer full-time employees and annual revenues of $500,000 or less. The county and regional economic development organization Penn’s Northeast, which helped administer the county program with support from the Community First Fund, spread word of the program and included a bilingual call center for those with additional questions.
Council ended up unanimously voting last month to set aside at least $5 million in American Rescue funds to set up a similar small business grant program administered by the Greater Pittston, Greater Hazleton and Wyoming Valley chambers of commerce.
The decision then became what to do about the small businesses already awaiting awards, including several faithfully attending council meetings to stay on top of the status of their submissions.
A council majority determined it would be unfair to remove the 21 businesses that already had completed the application process and were deemed eligible under American Rescue guidelines.
Lombardo: ‘A massive mistake’
Council Vice Chairman John Lombardo said last week he is frustrated over the issues related to small businesses because he had supported a separate program for small businesses a year ago that would have prevented confusion and removed council from those selections.
“The decision to not give chambers money to divvy out to small business in the first place I think was a massive mistake. Unfortunately these are things a majority of council didn’t want to do last year, and now it turned into a little bit of a disaster as far as small businesses are concerned,” Lombardo said.
He is optimistic the upcoming program solely for small businesses will help address eligible establishments that were unaware of the opportunity to participate in the first round.
In speaking about the past inaction, Lombardo was referencing the county administration’s proposal to carve out a suggested $20 million in American Rescue Funds for small businesses on Jan. 25, 2022, modeled after the CARES program approach.
As proposed, that program would have been managed by Greater Hazleton CAN DO, the Greater Wyoming Valley Chamber of Commerce and Penn’s Northeast, and other entities had agreed to assist applicants in filing for the program, the administration had said.
Political differences
Nine of the 10 council members seated at that time supported Councilman Stephen J. Urban’s proposal to table the matter, with the lone no vote from Councilman Tim McGinley.
The administration then presented further explanations on the plan at the next work session Feb. 8, noting the Pittston and Hazleton area chambers also would be involved. It provided additional suggestions on the application parameters.
But at the start of the next voting meeting Feb. 22, eight of the nine members present supported Councilman Kevin Lescavage’s motion to remove the proposal from the agenda without voting. Lombardo was the only member to support keeping it on the agenda.
It was initially placed on the subsequent voting agenda March 8 but removed by the administration before the meeting based on feedback and never publicly proposed by the administration again. Although some council members appeared to be in support of the plan, the majority will was not to proceed.
Lescavage said last week he did not support the allocation and special program for small businesses early last year because the American Rescue plans were still in their infancy and council members had no idea of the full scope of potential requests from internal and outside entities.
An up-front earmark for small businesses would have given the “wrong impression” to prospective applicants in other categories that would be interested in the funding, he said.
He is displeased with some of the recipients in the group of 113 and believed council should have started over with a fresh plan. Lescavage said he received complaints from businesses owners once they saw some of the private businesses that are receiving funding.
“I am hearing from other businesses crushed during COVID saying they did not know they could put in applications,” he said.
A perfect storm
Generally speaking, the county’s approach to American Rescue earmarks was unique because the full council took on the mammoth task of reviewing applicants.
Typically, screenings are performed by smaller administration groups experienced in grants and regulations, but council members came to realize disagreements and distrust could surface later if all 11 of them were not involved from the start.
In this unfamiliar landscape, council members were heavily reliant on guidance from the American Rescue consultant and did not receive the usual direction and input from management because council was in essence going solo on this mission.
Further complicating matters, council members weren’t supposed to talk to each other about their individual application evaluations to protect the integrity of the review process. The names of eligible applicants didn’t publicly start coming out until council’s review was complete.
Although smaller in scale, the previous disbursement of CARES funding was handled through the administration after council agreed to overall allocations in various categories. All $28.66 million in funding had to be used for COVID-19 planning, preparation and response expenses incurred through the end 2020. The county kept $11.8 million for its expenses but chose to allocate the rest to small businesses, municipalities, nonprofits, ticketed venues, schools, chambers of commerce, tourism, veteran groups, public libraries, youth sports groups and other entities.
For the upcoming small business program, Lombardo said he expects council will rely on the chambers to present program parameters on how they recommend proceeding.
Despite the bumps, Lombardo said he is mostly pleased with the 145 internal and outside projects funded to date. The county received a total $112.89 million and has approximately $11 million not yet earmarked.
Details are still being worked out for a public relief program, with council unanimously agreeing to allocate at least $5 million for that purpose.
“I’m happy generally with the outcome. We’re helping a lot of people,” Lombardo said.