Plans in Works for F.C. Small Business Grants

While contemplating City of Falls Church fiscal unknowns in the face of the Covid-19 pandemic lockdown, the F.C. City Council will begin to move on a revised budget going forward at its meeting next Monday. At its work session this Monday, it learned of aggressive efforts locally to help the most vulnerable citizens and smallest businesses for which even a $2,000 micro grant can make a huge difference for keeping their doors open.

The Council will begin to act on making $2.3 million in cuts in the coming fiscal year budget next Monday, scrapping the version proposed before the pandemic hit last month, but that will be based on a “moderate,” not “worse” forecast that will be better evaluated in the fall.

It includes a $500,000 cut in the City’s transfer to the Falls Church City School system for the current fiscal year.

In the meantime, as Housing and Human Services division head Nancy Vincent reported Monday night, a mobilization is well underway to meet the needs of senior and other vulnerable citizens with an expansion of services including the delivery of three months of non-perishable food from the Capital Area Food Bank to residents of the Winter Hill Senior Apartments, expanded hotel vouchers for the City’s homeless, free Covid-19 testing at a facility in Merrifield and emergency dental care.

City Manager Wyatt Shields has sent a letter to apartment building owners urging leniency in rent payments, and three grocery stores in the City have been contacted about providing special hours for seniors to shop.

A team of three addressed the Council, once again convening online for health security reasons, about a plan devised to offer $2,000 micro-grants in an initial amount totaling $100,000 that are being crafted to provide swift if modest assistance to small businesses in the City with less than $500,000 annually in gross receipts.

The City’s Economic Development Office chief, Becky Witsman, presented the plan, accompanied by Bob Young, chair of the Economic Development Authority and Sally Cole, director of the F.C. Chamber of Commerce.

“The business community needs to know that Falls Church cares,” Cole said, “and this is more important now than ever.” She said that even small grants can make a make-or-break difference for small businesses.

Vice Mayor Marybeth Connelly remarked that she attended a Chamber Board of Directors meeting last week and heard stories about the plight of small business owners. “Even some of the businesses we know and love have been struggling in ways we’d not imagined,” she said.

Witsman said that the kinds of businesses that could receive critical help with this program are a lot of “ground floor commercial users, hair salons, nail salons, fitness places. The kinds of businesses you see up and down West Broad.”

Young said the plan is “to make it simple and above all fast.” He said informal surveys with many small businesses in the City have revealed that of all who applied for the federal Payroll Protection Plan grants and SBA disaster assistance, “Only about 10 percent of those who applied have received anything.” He said that most who applied through Bank of America or Wells Fargo have found those megabanks put their biggest borrowers to the head of the line.

“We had a couple local businesses who applied right away but then heard nothing for weeks, only to be told the money had run out,” he noted.
Witsman made it clear that the micro grant plan would not go far. “The number of small businesses in Falls Church is a big number. The 50 businesses that might benefit from this is just a tiny percentage.” Young noted that he initially proposed $250,000 for the program, and the Council concurred that making more than the initial $100,000 may be necessary.

Council member Ross Litkenhous said he likes the plan. “I love when we get scrappy and do what we can,” he said.

Young told the News-Press Tuesday that the EDA will vote on the issue at its meeting next week since the funds that will be used on the program are from the EDA and not the City.

He said he might propose starting with $100,000 on the proviso that the number might rise to $250,000 as needed. Although the funds for the program would come from the EDA, the City has been deeply involved in setting up the program, especially, Young said, through the tireless efforts of Witsman in the last week.

As for the Falls Church City Public Schools, its Superintendent Peter Noonan walked the School Board, meeting online Tuesday night, through stiff budget cuts both for the current and coming fiscal years due to the impact of combating the pandemic.

BECOMING A FAMILIAR sight, members of the Falls Church School Board and administrative staff gathered online for their meeting Tuesday night. (Photo: News-Press)

As revenue to the City is bottoming out in the crisis, due mostly to losses in sales and personal property taxes since Gov. Northam’s March 13 shelter in place order closed most businesses, Noonan and Schools’ financial chief Kristen Michael told the School Board to expect a $500,000 drop in City transfer to the schools for the remainder of the current Fiscal Year 2020 through June 30, and an initially estimated $2,402,750 drop below the $54,584,282 budget level established by the Board in February for the upcoming Fiscal Year 2021.

For the current fiscal year, Noonan indicated that the $500,000 shortfall in the City’s transfer will be made up by a $300,000 draw from the schools’ reserve fund and the freezing of all non-essential spending for the remainder of the year.

Overall, Noonan said, “We have gone from what I saw as one of the most promising school budgets ever to one where we must scramble to avoid any cuts in personnel, though no step or cost of living raises will be forthcoming.”

Still, the City is fortunate compared to surrounding jurisdictions insofar as its reliance on business and sales taxes is relatively lower compared to real estate tax revenues, and that combined with a use of two thirds of the system’s fund balance reserve may see the system through without layoffs or structural changes such as a increase in class sizes.

Noonan went on to say that the combination of circumstances, even though City schools will get the lowest amount in federal relief funds of any system in the state due to the City’s relative lack of poverty cases, are “lucky for us,” and “We’re in as good a situation as we can be right now.”

Going forward with the budget revisions on the City and school sides, the City Council will vote on a first reading of a revised budget next Monday, April 27, hold a work session on May 11 and adopt its final new FY 2021 budget on May 26. The School Board will hold a work session on May 12 and adopt its new FY 2021 budget on May 28.

Rather than formally pass along to the Council its revisions, the School Board will make its changes known by way of a letter to the Council that was OK’d Tuesday.