The city of Kent plans to distribute $1 million in grants to small businesses to help reimburse them for costs of business interruption that were caused by required closures because of the COVID-19 pandemic.

A plan for how to distribute the funds, and which businesses are eligible, is expected to be released in early July. The funds will be used from a $3.8 million grant the city received from the state through the federal CARES Act.

Mayor Dana Ralph recommended to the Kent City Council that $1 million be used for grants to small businesses and job training, with $2.8 million to be spent to cover costs to the city because of the COVID-19 outbreak.

“Our goals are to develop criteria that are as consistent as possible with those of King County and other cities that are creating small business grants programs (especially South King County cities) and to use a third-party grant agency to accept applications, award funds and otherwise administer the grant program,” said Derek Matheson, the city’s chief administrative officer, in an email.

Matheson said in his June 16 written report to the council that Economic and Community Development staff interviewed neighboring cities and county governments on their approach to the CARES Act funding for small business grants and what precautions they took to protect themselves legally.

City staff also met about community outreach to let people know about the program and how to apply for funds.

“Anticipated needs include translation services and dissemination of and assistance with forms and applications as part of a very short-termed, small business grant program to efficiently and effectively disperse federal relief dollars where they are sorely needed,” Matheson wrote.

The Federal Way City Council on June 16 unanimously approved spending $2.5 million of its $2.9 million CARES Act funding on grants to small businesses that were impacted by the COVID-19 pandemic. Cities were awarded funds from the CARES Act based on their populations.

Federal Way plans two rounds of grant disbursements available to Federal Way-based businesses, with $1 million available in each round. Awards of $1,000 each will be available for 500 businesses and $2,000 each for up to 250 businesses. The criteria includes businesses with no more than 10 employees (full-time equivalent).

Kent City Finance Director Paula Painter told council members on June 2 that the city can use the federal funds to cover its COVID-19 related expenses from March 1 through Oct. 31. The CARES Act has numerous specific requirements about how cities can spend the funds.

“We are not able to use it for revenue shortfall,” said Painter, who added that’s why the funds were not part of the city’s budget plan announced in late May that cut jobs and shifted funds to help cover an estimated $15.7 million revenue shortfall with losses of sales taxes and business and occupation taxes.

Councilmember Satwinder Kaur suggested at the June 2 council meeting that $30,000 or so of the funds be used for human services to help nonprofits, families or individuals who need help.

Painter and Ralph, however, replied to Kaur that the city’s human services division already has funds to help with those costs.

Councilmember Bill Boyce said other potential uses of the money could come up later in the year.

“There may be opportunity for funds from what is leftover after city uses on city costs,” Boyce said. “Right now we need to take care of business and pay ourselves back because we don’t know what that will be. If we get to the end and we have funding leftover, we can look at that.”

The CARES Act has numerous requirements about how cities can spend the funds.