Bexar County commissioners voted Tuesday to allocate $1.5 million in federal coronavirus relief funding to a grant program for small businesses that have been affected by the pandemic.

That money came from the $79 million Bexar County received from the federal government for coronavirus response purposes. County commissioners agreed earlier in May on a general framework of how to use that money but will continue to approve specific projects and contracts as they are recommended.

The grant program commissioners approved Tuesday will be administered by LiftFund, a microlender based in San Antonio that also helped the county distribute $5 million in County funding to small businesses in the form of no-interest loans earlier this year. LiftFund gave out another $250,000 of the County’s money as grants at the same time.

The County voted last Thursday to allocate $1.5 million in federal funding for the small-business grant program and another $5 million for a loan program. However, David Marquez, the County’s director of economic and community development, told commissioners that using federal funds for coronavirus relief in a loan program does not seem to comply with how the coronavirus relief legislation was written.

“Business would ultimately give [the money] back, and that’s not the spirit of the relief fund,” Marquez said. “Even though we had the notion of very long repayment timelines, it feels more prudent to go with the grant program and help businesses use those dollars and rebuild themselves as we begin to reopen.”

County staff will provide recommendations at the next commissioners court meeting on how to use the $5 million originally dedicated for loans in another way, Commissioner Justin Rodriguez (Pct. 2) said.

“In other words, we have a total of $6.5 million that we want to give as grant money to small businesses,” he said.

Small businesses may receive up to $10,000 from the LiftFund grant program, which means at minimum 150 businesses will benefit from the approved $1.5 million, Rodriguez said.

Commissioners also directed staff to look at other organizations around Bexar County to help with grant distribution. For example, Maestro Entrepreneur Center on the West Side, a nonprofit dedicated to growing local small businesses, has expressed interest, Bexar County Judge Nelson Wolff said.

“Hopefully next court session, we come back with four or five organizations that have the capacity to” distribute grant funding, he said. “That’s just one thought on how this might go.”

Melissa Shannon, director of governmental affairs, also told commissioners Tuesday she has been tracking new proposed coronavirus relief legislation being considered by Congress, but is not optimistic about the County getting additional federal funds.

“I truly think what we’ve received from the [U.S.] Treasury is all we’re going to get,” she said. “It is what it is.”

Federal coronavirus funding cannot be used to make up for lost revenue, Shannon reminded commissioners. The County must spend the $79 million allocated by the federal government by Dec. 31.

County Manager David Smith said he had already been in touch with County departments about the next fiscal year’s budget process, which will be “very abbreviated.” He said 66 percent of the departments’ budgets go toward salaries and benefits, and asked departments to look for ways to fund any mandated functions that require increased spending.

“At this point, I’m hoping we can have a steady-as-she-goes budget,” he said. “I’m afraid or worried that the real impact of this on our revenue collection won’t be felt until our following budget. I don’t know how many businesses are coming back and how many aren’t at this point.”

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Jackie Wang

Jackie Wang covered local government for the San Antonio Report.