After exhausting $90,000 worth of small business grant funds to 32 local businesses, the Brainerd City Council approved more funds to cover eight additional businesses Monday, June 15.

Last month, council members authorized money for a grant program providing up to $3,000 to businesses in Brainerd with 10 or fewer employees to assist with expenses related to COVID-19. The Economic Development Authority spearheaded the program.

Community Development Director David Chanski told personnel and finance committee members prior to Monday’s council meeting eight businesses applied but did not receive funding, as grants were doled out on a first-come, first-served basis until the original $90,000 was gone. He recommended the council approve another $23,500 to fund those eight businesses, seven of which requested the full $3,000, with one requesting $2,500.

“I support this wholeheartedly,” Committee Chair Dave Pritschet said, noting there was initial concern when approving the grant program of running out of money and not being able to help all the businesses that need it. With the extra money, the program will be able to do just that.

Pritschet also noted many of the businesses that received the grants were not downtown and said he was glad the city could help a wide variety of businesses all around the city.

City Administrator Jennifer Bergman said business owners were beyond grateful to receive the checks when she, Chanski and EDA member Yvette Campbell personally delivered them last week. A couple of them were in tears, she said.

“I just wanted to share with the council how appreciative those businesses were,” she said, noting some only requested a portion of the $3,000 maximum.

Pritschet said that information seemed to answer earlier concerns about the grant amounts not being enough.

During the regular council meeting Monday, Council President Gabe Johnson said he would support the extra funding even though he voted against creating the program in the first place. During the May 18 meeting he expressed concerns about spending so much money at the beginning of a pandemic when there could be a major economic recession down the road. He was the lone opposing vote, and because 32 businesses have since received grants, Johnson said Monday he would support the additional funding.

The council unanimously agreed.

The eight additional businesses receiving funding are: Pit Stop Bar, Yesterday’s Gone Bar & Grill, Harting Shoe Repair, Kevin Matthews Pottery, 5Rocks Distilling Co., Lakes Area Flooring Store, Jack’s House and Adapt Family Martial Arts and Fitness.

Funding

The $90,000 came from the city’s Minnesota State Investment Fund. In May, the council authorized use of the state investment fund’s one-time exception, which allows cities that have uncommitted money in their revolving loan fund to use 80% of the balance as general purpose aid as long as they return the other 20% to the uncommitted balance of the state’s general fund.

Even though the city made use of the one-time exception in 2018, the state Legislature renewed the option in 2019, giving cities until June 2020 to decide.

Last year, the city retained $173,572.46 while returning $43,393.11. A portion of that went to a study for a riverfront trail feasibility study, leaving about $133,000 for local economic development opportunities.

On May 18, the council agreed to spend $90,000 from the fund for the grant program and another $25,000 on a citywide marketing campaign. Another $99,077 was added to the fund from the Housing and Redevelopment Authority when the council terminated a memorandum of agreement associated with the administration of the city’s revolving loan program. Because no loans had come out of the program fund since its beginning in April 2018, the HRA agreed to return the funds to the city for economic development use. The fund originally had $100,000, but $99,077 was returned because some money was spent on legal and postage fees.

Public comment

During the meeting’s open forum, resident Cheryl Petersen said she did not think the grants were given out fairly because the guidelines were too strict and did not include nonprofits and churches. Petersen operates the nonprofit National Boxer Rescue and is running for an at-large seat on the council.

“The Minnesota Investment Fund was meant for all businesses, and you guys narrowed it down, funneled it down, classified it down again and thinned it down to just certain businesses, and it is just weighing on my back so badly that you did that,” Petersen said.

“I think it’s a shame,” she added. “And I could have definitely used that $3,000. I just want you to think about that, seriously. That money was not just meant for a few.”

Petersen said she talked to others who feel the same.

She also noted the $25,000 the council previously approved for a citywide marketing campaign was too much and could have been used to fund grants for more businesses and for nonprofits.

No council members responded to Petersen, as is council policy with public forum comments.

THERESA BOURKE may be reached at theresa.bourke@brainerddispatch.com or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa .