SOMERSET, NJ – Given the choice between using federal aid earmarked for COVID-19 relief to provide micro-business enterprise assistance or direct rent relief to residents, the Franklin Township Council chose to deploy the funds to small businesses and suggested that the effects will “trickle-down” to struggling renters. 

The more than $160,000 came to Franklin through the U.S. Department of Housing and Urban Development’s Community Development Block Grant (CDBG) program that’s providing money made available by the federal Coronavirus Aid, Relief and Economic Security Act (CARES). 

The township had two options for distributing the money, according to CDBG Administrator Deborah Mitchell: Split the funds between the Franklin Food Bank, a COVID-19 testing site and small business assistance, or swap out the small business assistance for one-time rent relief to eligible families facing eviction. The total amount at the township’s disposal is $160,933.

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Mitchell said that they were limited to two options because “of the limited amount of funds that we received and the desire to make the best impact.” 

The council ultimately agreed with the financial oversight committee’s recommendation that allocating money towards businesses would also help residents struggling to pay rent. 

“After a great deal of discussion it was decided that the micro-enterprise program would probably be the most effective,” Mitchell said at a council meeting on June 9. “It would allow us to assist anywhere from 11 to 17 businesses and we can help them with employee retention and in the end it would also assist in keeping families in their homes if they are able to pay their rent.” 

At the same council meeting, legislators unanimously voted to direct the money towards small businesses, accepting the recommendation of the township’s financial oversight committee. 

Here’s how the CARES Act money will be used:

  • Franklin Food Bank: $25,000
  • COVID-19 testing center: $50,000
  • Micro-business enterprise assistance: $85,933

Had the council taken the other path available to them, the funds would be distributed like this:

  • Franklin Food Bank: $25,000
  • COVID-19 testing center: $50,000
  • One-time relief to eligible families facing eviction: $85,933

According to Mayor Phillip Kramer, the township was always going to fund the food bank and testing center. 

“Either way, we were going to fund the food bank. Either way, we were going to fund testing, but the question was should we fund small businesses or should we give money to people to help pay their rent?” Kramer said at his weekly virtual town hall on June 11. “The decision really came down to a logical methodology. There’s a reasonable chance you can kill two birds with one stone if you fund businesses or help businesses stay in business and do business. Then they hire people and those people could very well be people who would be paying their rent. So if you pay rent alone then businesses aren’t helped at all, but our hope is that if we give loans or money or allocations to businesses the trickle-down will allow people to perhaps pay their rent.”

According to Mitchell, there’s a “possibility” that at some point the township may move funds around. 

“If we don’t spend them all we’re able to do other things with the money as long as they’re related to COVID relief,” she said. 

A lottery will select which qualifying businesses will receive the funds, though the financial oversight committee briefly considered doling money out on a first-come-first-served basis.

“The recommendation of the financial oversight committee was that it be done by lottery,” Mayor Kramer said. “It was a thought at one point to do first-come-first-served but that serves people who have happened to run into it or may have better internet skills or better access so we thought a lottery was the way to go.”

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