For the first time ever, Cypress will spend $200,000 from surplus relief funds to distribute grants to home based businesses within the cityWhile the city has already utilized CARES ACT funding to distribute two rounds of $5,000 grants to local businesses, the city council had recently asked staff to develop a program for home-based businesses.
Jason Machado, Senior Management Analyst, unveiled criteria for the proposed home—based program at the council’s most recent meeting, saying there are approximately 560 so-called home-based businesses located in the city.
Both Machado and city manager Peter Grant acknowledged that putting together a grant program for home-based businesses is not something they had done before. Grant said they were “in the territory of things we’ve never done.”
Nevertheless, Machado said the staff had developed a plan that will allow the city to assist home-based businesses, so long as business owners can provide a business license purchased before Dec. 2019 and demonstrate more than $50,000 in annual income.
Also, only “for profit” home-based enterprises are eligible for the grants, said Machado. Looking at a number of factors, “we have determined that the $50k level is appropriate,” he added.
Machado said the income level was established to differentiate “side businesses” from businesses that provided owners its substantial source of income.
In addition, he said there would be a robust screening process involved before the grants are awarded, including tax returns, an application, and other items.
Machado estimated that the program will award 80 grants to home based business of $2,500 each. Susie Masters, one of the partners in a home-based travel business, said their company “has been extremely hard hit by the pandemic.”
Masters said while the company has generated about $2.5 million per year before the pandemic, she asked the council to consider raising the grant level $5,000 like other small businesses.
Grant said the city will keep the request in mind, but the city will limit the grants as currency structured.
The city manager also deferred a request by Council member Frances Marquez, who asked staff to consider the inclusion of extremely small home-based business, under $50k, and those who are just starting out. “They are really suffering too,” she said.
Grant said changing eligibility at this stage could require “almost limitless discretion.” Moreover, Grant said it would be difficult to determine if such tiny enterprises were “following the laws the council has put into place.”
Like the other suggestion, Grant said it could be considered but worried openly about being able to put “proper financial controls” in place for such small grantees.
Mayor Jon Peat said the council was already “way beyond our expertise” so council member Anne Hertz moved the program forward as currently constructed by the staff.
The home-based program passed unanimously, and staff said they could have checks in the hands of the home-based business by April.