Neighborhood coalition faces backlash over federal small business loan
Members of the South Burlingame Neighborhood Association are speaking out against a neighborhood coalition that received more than $66,000 in Paycheck Protection Program loan money.
South Burlingame is one of 17 neighborhood associations under the umbrella of Southwest Neighborhoods Inc. (SWNI.) Neighborhood coalitions are primarily funded by the city of Portland's Office of Community and Civic Life, and serve as a hub for community outreach and engagement. They aim to increase citizen involvement in decision making and planning processes.
Sylvia Bogert, executive director of SWNI, said the nonprofit organization applied for a federal Small Business Administration loan through the Paycheck Protection Program and received $66,300 in May. The reason? The coalition expected to lose revenue it normally gets from advertisers for a regular newspaper it distributes, and is bracing for possible cuts to its annual funding from the city of Portland, come fall.
"The ability of our board to raise additional funding to meet our operating costs is limited," Bogert said.
The federal forgivable loan program was created to help small businesses and nonprofit groups stay afloat during the COVID-19 pandemic, and to avoid employee layoffs. SWNI has eight employees, half of whom are part-time, and operates with a roughly $370,000 annual budget, according to financial records on the coalition's website.
"It was emphasized to us that the city was going to be facing huge financial impact due to COVID," Bogert said. "[The loan] is in case of economic uncertainty, which we are uncertain."
She said the city's new budget language now indicates the city might terminate or amend their grant agreement if they don't have funding.
South Burlingame members point out that the latest iteration of the city budget doesn't have proposed cuts to SWNI's funding. They said SWNI doesn't need the PPP loan, because the organization is funded through a city contract, and has about $70,000 in reserves to cover any expenses or lost revenue.
"SWNI and several other Portland neighborhood coalitions have sought Payroll Protection Program (PPP) Loans while SWNI is still being funded by Civic Life, Bureau of Environmental Services and West Multnomah Soil & Water Conservation District taxpayer dollars at the same stable level as 2019/2020 even though other bureaus have cut spending," SBNA stated in a press release.
The neighborhood association formally disavowed any connection to the loan program plans. "SWNI has received PPP funds that should be in service to those businesses truly in need as SWNI has not decreased hours or laid off any staff during the time of COVID and has shown little to no impact to operations related to COVID-19."
The city office that funds SWNI also has raised an eyebrow, discouraging SWNI from moving money around to utilize the PPP loan. Suk Rhee, director of the Office of Community and Civic Life, said the coalition can't roll over any portion of city funds it receives, if it ends up with a surplus after the PPP loan.
"We have not and would not offer an option to carry over unexpended or redirected FY '19-20 funds for FY '20-21 uses for this grant," Rhee said.
SWNI plans to use the funds to focus on communication and outreach to Southwest Portland communities, and will reallocate up to $25,000 in loan funds to community groups, business associations, organizations and neighborhood associations, in the form of $1,000 grants.
"We're calling it the Community Engagement Allocation Program," Bogert said. "This is to build collaboration and coordinate volunteers. We're encouraging projects that engage with underserved populations."
Shannon Hiller-Webb, South Burlingame's vice president and SWNI representative, says that's far from the goals of the PPP.
"The SWNI PPP loan was not in line with the intent or the spirit of the program by taking a loan for payroll then attempting to reallocate city grant money to keep from surrendering the PPP loan monies," Hiller-Webb said." SWNI does not require the PPP loan to cover payroll, nor should we look for ways to spend this grant money to avoid forfeiting it back to the city."
One group who plans to apply, the Hillsdale Neighborhood Association, intends to use most of the funds toward mailing postcards to inform residents about upcoming virtual HNA meetings. The rest of the money would pay for a memorial oak tree, dubbed a "pandemic tree," to be planted on the south side of Capitol Highway, according to HNA meeting minutes.
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