What is CARES funding and where does it come from?
CARES is an acronym that stands for Coronavirus Aid, Relief and Economic Security.
CARES Act funding is $2.2 trillion from the federal government, which was allocated around the country in March of 2020 to provide quick help to Americans impacted by the COVID-19 pandemic. Of those federal funds, Shasta County received $18.15 million. The money is intended to help families, small businesses, and state and local governments.
Why is Shasta Scout covering CARES Act funding now?
New federal COVID-19 relief funding, as part of the American Rescue Plan Act (ARPA), could be made available to local businesses soon. But some community members, including Shasta County Supervisor Patrick Jones, have expressed concerns about the county accepting more federal money because it might come with requirements to follow current and future federal and state COVID restrictions. According to reporting by the Record Searchlight, while CARES Act funding did come with requirements to follow COVID restrictions, ARPA funds will not.
Regardless, California counties are required to follow state COVID restrictions whether or not they take federal funding, although many businesses in Shasta County have not.
How much CARES funding did Shasta County get and where did it go?
Of the $18 million received by Shasta County, $14.9 million (83%) has gone directly to county government itself, in support of COVID-related county services.
Another $4 million (22%) has gone to small-business funding, and $1.2 million (7%) has gone to community assistance via non-profits.
How did the county decide how much CARES Act funding to allocate to local businesses?
In August of 2020, county supervisors originally voted to allocate $300,000 in CARES Act funding for small business assistance in grants of up to $5,000 each. In responses to needs expressed in response to the Redding Chamber of Commerce’s social media surveys, the supervisors voted again over a series of meetings that fall to increase the amount allocated to businesses to an eventual total of $4 million in small grants.
Who distributed business grants, who was eligiblem and what process did the Chamber use?
The county chose the Redding Chamber of Commerce’s non-profit arm, the Forward Redding Foundation, to distribute CARES Act funds to local businesses.
According to a county report, the organization was chosen because of their previous experience working with the cities of Redding, Anderson and Shasta Lake to help allocate business grant funding . The Chamber was allowed an administrative fee of 4% ($120,000) to cover the costs of distributing the funds.
Urgent distribution of funds was important because businesses affected by COVID-19 were struggling and because the Chamber had been tasked to distribute the money by the end of 2020. Grant applications for funding opened September 22, 2020, and the Chamber used press releases and social media posts to spread the word about available funding.
In order to be eligible to receive funding, businesses had to meet a list of requirements that included a valid business license, demonstrated negative impact caused by COVID-19, and no more than 25 employees. Businesses were also required to attest that they were following state health and safety guidelines to receive funding.
Chamber CEO Jake Mangas assembled a committee that would review applications in order to select which businesses would receive funding and how much they would receive. Mangas put himself on that committee, and also chose Brad Williams, Jessaca Lugo, Joe Rodola, Kerry Carancini, Todd Jones, and Wendi Zanotelli.
Committee members were chosen for their areas of expertise, including specific knowledge in business development, non-profit funding, the public sector, and financial management. “I wanted to go with people that I trusted,” Mangas said, “that I knew were knowledgeable and that were not, in my mind, political in nature.”
As incoming applications were reviewed, Mangas said the Chamber prioritized businesses in the unincorporated parts of the county, as required by their county contract. And, in the interest of doing “the most good with the money,” he says the committee also worked to ensure that funds went only to businesses that were still viable enough to survive.
Between October and December of 2020 the Chamber distributed almost $4 million in funding to local businesses, focusing them towards those most likely to be most affected by COVID restrictions including small retail and personal service businesses, like nail and hair salons.
The committee also prioritized businesses choosing to follow state mandates. “There was this whole struggle with business people,” Mangas said, “between preservation of life and preservation of livelihood.” He added, “If a small business was hurting, we thought that meant they were following the rules and that needed to be recognized by consideration from the grant committee.”
Mangas did not attempt to have the committee “blinded”, which would have required them to review applications without being able to see applicant names attached. Saying that his intentions were “pure,” he explained that he wasn’t aware at the time of the kinds of political repercussions of the funding that would become apparent later.
Who got the CARES Act business money?
According to county documents, as of December 15, 2021, a total of 586 applications for CARES Act county funding had been processed and around 500 grants awarded, including 84 to unincorporated Shasta County businesses, 389 grants to businesses in the Cities of Anderson, Redding, and Shasta Lake, and 81 to nonprofits. In response to a request for documentation, Tim Mapes, Shasta County’s Public Information Officer, provided a list of those businesses, last updated in November 2020, which can be found here.
Recipients included non-profits like Advance Redding and the Redding Asphalt Cowboys, service establishments like La Cabana and Fall River Brewery, medical facilities including Cosh Chiropractic and Nuclear Medicine Associates and plenty of sole proprietorships, or businesses run by a single individual.
Were local businesses that received CARES Act funding required to follow COVID-19 business restrictions?
The original language of the county’s agreement with the Forward Redding Foundation required them to monitor compliance with COVID-restrictions, although Mangas says no such steps were taken.
While COVID-19 death rates in some counties that adhered more strictly to COVID restrictions, including San Francisco, are far lower than Shasta County’s, researchers have said it’s difficult to assess just how effective practices like social distancing and lockdowns have been. A multitude of factors can affect death, infection, and hospitalization rates but the evidence that mask mandates can be effective is strong.
How did the public and the county respond to the Chamber’s role in the fund distribution process?
After most of the CARES Act funds had been distributed, the Chamber received criticism for taking a strong political stance on a county supervisor recall.
In December of 2021, county supervisors argued over allowing the Chamber’s Forward Redding Foundation to distribute a small amount of remaining funding ($37,000) found during an internal audit. Supervisors Patrick Jones and Les Baugh voted not to allow the Chamber to distribute the funds because of the organization’s political activities, specifically, using its platforms in previous months to endorse supervisors being targeted for recall and donating funds from its Political Action Committee (PAC) to the anti-recall group Shasta Forward.
That distrust was a factor in the Chamber’s decision last month to dissolve their political action committee and to end endorsement and funding of political candidates, Mangas said.
Funds used by the Forward Redding Foundation for local businesses are currently under a contractually-mandated external audit, meaning they are being reviewed by DH Scott and Co. Personal Accountants to be sure they were used appropriately.
Why is there so little information online about the county’s CARES Act business grants?
While the county has made its overall CARES Act fund allocations visible on their website, including the $4 million designated for businesses, neither the county nor the Chamber has provided accessible, up-to-date information on the process by which those funds were awarded or what specific businesses received them.
The Chamber’s page about COVID business grant funding is significantly out-of-date and shows the overall funds distribution amount as $3 million instead of $4 million. It has no details on how the distribution process occurred, what committee members made those decisions, or what businesses received funds.
Mangas, in comments made to Shasta Scout several weeks ago, said the website should be updated. Mapes, a public information officer from Shasta County, has not yet responded about the lack of accessible, up-to-date information on the county’s website.
Will there be more COVID-19 funding for local businesses?
The Chamber’s online application form remains open, and Mangas reports an active waiting list of businesses requesting a total of about $1.5 million in funds. That includes some businesses who have already received funding but are now asking for more, as well as new businesses requesting initial funding. Mangas said the Chamber recently surveyed businesses on their mailing list with one out of four respondents indicating that they are in need of more funding as a result of the ongoing adverse economic impact of the pandemic.
New American Rescue Plan Act (ARPA) funding could soon be made available to businesses, and if it is, the Chamber hopes to help with that distribution process.
“If we can get a commitment of additional funding,” Mangas said, “we will alert the greater business community throughout the county.”
You can see the Chamber’s report on CARES Act business grants here.
A list of organizations that received grants is here.