Rockland Council approves city-financed small business loan program for pandemic-related situations

Fri, 05/29/2020 - 10:00pm

    ROCKLAND — Small businesses in Rockland are now able to apply for $5,000 loans funded by a Downtown reserve account and money from a City undesignated fund.

    Council members approved the measure in a 4 - 1 (Councilor Ed Glaser) vote during a budget session, Wednesday, May 27. The overall approval, however, did not come easily. 

    Since the beginning of the COVID-19 shutdown, Council members have been seeking ways to support businesses and residents through the pandemic. They’ve shown concern for rent evictions, sought ways to involve local products (Mayor Lisa Westkaemper asked during a previous meeting if any new plows could come from Fisher), as well as considered a closure of Main Street as a way to draw attention to the Downtown district.

    According to some Council members, however, City business must result in a benefit to the City, aka, its taxpayers. Councilor Valli Geiger stated this mindset during her initial disproval of an isolated Downtown TIF loan offer. 

    This order on the May 27 agenda authorized the City Manager to use the money allocated to the Downtown TIF fund for small loans to Downtown businesses.

    “I don’t think the average taxpayer is going to understand why Main Street gets loans while no one else, including all the other businesses, do not,” she said. “I have trouble justifying small loans rather than some kind of permanent infrastructure that’s to the benefit of the City. These are tax moneys. They belong to the people of Rockland. I can’t get passed small loans to individual businesses, hoping they’ll make it. But, if they don’t, the taxpayer’s on the hook for that. We just lost the money. I’m not happy about that; I’ve been thinking about this a lot. But, I don’t think I can vote for it.”

    Councilors Ben Dorr and Nate Davis requested that the loan program be expanded to include all Rockland small businesses, not just Downtown.

    With that in mind, Dorr proposed adding $100,000 from the City’s undesignated fund account to expand the loan opportunity to the rest of the city.

    The undesignated fund is normally used for City projects, such as street lighting, and currently holds a rough estimate of $2.5 million, according to City Manager Tom Luttrell, during the May 27 meeting, conducted via Zoom.

    Dorr, a Downtown business owner, said that $5,000 is worth a lot more during the pandemic. For him, the money would cover two months rent as his business sits closed and idle. To the City, the loans may be a small risk, he told Geiger. Yet, the money is taxpayer funded, and Rockland businesses are taxpayers, too. They helped build the funds prior to COVID-19. 

    “Let’s give it back to them and keep their businesses going for another couple of months so hopefully things can normalize,” he said. “Right now is the crisis moment. Right now is trauma moment. Now is the moment to give people $5,000, whether it is to fix their truck for their lawn repair business, pay their rent for their space on Main Street, whatever that thing is that could close them because they are in crisis. We have an opportunity to use their money to help them get through a really difficult time as a small business. I think that has real value for our community. I think it is a small risk for a potentially really large gain for a lot of people.”

    Councilor Ed Glaser defined the undesignated fund balance as a collection of tax dollars paid into the system that hasn’t been spent yet. His idea is to see that money spent on City projects that benefit the entire city, such as the street lighting. 

    “I don’t know that lending money with the possibility we may never get it back is really something that most taxpayers would support,” he said. “I can support one but not the other, and if the two of them (Downtown TIF and undesignated) are put together, I wouldn’t be able to support it.”

    Councilor Davis stated that he couldn’t vote in approval if the two were separated. 

    “Tax money is for public benefit in general, regardless right?” he asked. “And the fact that the TIF money is restricted geographically, and for certain uses in a geographic region, doesn’t mean it can’t be spent on projects that benefit the entire town.”

    Glaser said that it’s not just about the money. The entire loan program could potentially add a large burden on the City employees who would manage the loans. The program, he said, would create a workload for staff over the next few years in the form of sending out yearly bills or monthly reminders, or at the end of the term, trying to track down the money.

    The other Councilors held no concern. Rockland already manages a couple of microloan programs.