A closed sign hangs in the window of Peluqueria Latina on Friday, April 24, 2020 in Yakima, Wash.

Yakima’s smallest businesses might be able to get a financial boost from the city.

The Yakima City Council authorized at its Tuesday meeting a partnership with the Yakima County Development Association to distribute up to $480,000 of Community Development Block Grant funding to the city’s micro-enterprises that have been hit financially by the COVID-19 pandemic.

To qualify, businesses must have five or fewer employees, including the owner. The owner also has to make less than 80% of the median income for the surrounding area, per federal guidelines.

About 437 businesses in Yakima would meet those criteria, said Yakima Senior Assistant City Attorney Sara Watkins.

“The larger the business, the less likely the owner will meet the criteria,” Watkins told the council. “These grants, therefore, would likely go to the smallest of the businesses with the most need.”

Watkins said the funds would not be grants, but rather reimbursements; businesses would have to provide receipts for services — including payroll, utilities, supplies or other operating expenses — to prove their need and that they lost revenue due to the coronavirus. Award amounts could vary within a range to be determined by the council, she said.

The discussion Tuesday resulted from a council request at a previous meeting that staff look into ways the city could possibly help struggling businesses.

The funding comes from $602,000 of federal funding the city received to directly address COVID-19 effects, of which the city can keep 20% for administrative costs and technical assistance associated with the program, Watkins said.

Watkins presented the recommendation to work with the development association, which is administering a similar program with Community Development Block Grant funding for county businesses outside of Yakima city limits, as an efficient and effective way to administer the funds.

The council approved that approach with a unanimous vote.

Reviewing applications

Jonathan Smith, director of the Yakima County Development Association, said a task force had reviewed eligible applications for the county’s grant reimbursements using a weighted questioning system to prioritize those overlooked by other sources of financial relief.

The county’s criteria prioritized communities of color, businesses that had to shut down completely due to the state’s “Stay Home, Stay Healthy” order, and businesses most likely to go out of business because of the pandemic’s repercussions.

Councilman Jason White asked if all micro-enterprises that applied and qualified could receive equal amounts of funding.

Watkins said that method might not be in the best interest of the city, as businesses likely would have different needs. Giving each business $1,000 might not help certain businesses survive the pandemic’s repercussions, and the goal is for the city’s businesses to thrive once reopening, she said.

Watkins and Smith said other communities, including Seattle and Pierce County, have used a lottery system to select which businesses would receive similar reimbursements, given a huge number of applicants and a short time to review applications. Smith said he would work with the council to determine and refine the desired review criteria.

In a follow-up interview, Smith clarified that the $602,000 the city of Yakima received is separate from the Working Washington grant funds through the state. The eligibility criteria for the Working Washington program and the city’s new micro-enterprise program are different. So a new application likely will be needed for a business that applied for the Working Washington grant but that also meets the eligibility requirements of the Community Development Block Grant program, Smith said.

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Reach Lex Talamo at ltalamo@yakimaherald.com or on Twitter: @LexTalamo.