Fredericksburg will use $500,000 of its share of the CARES Act COVID-19 relief fund allotment to help the city’s small businesses, which have been hit hard by the pandemic.

This is the second largest line item in a budget that City Council unanimously approved Tuesday for the roughly $2.5 million the city received through the fund. The largest amount, $750,000, will provide hazard pay for public safety employees.

The city will use half of the $500,000 slated for small business on assistance grants, and $208,000 for a marketing program publicizing steps the city has taken to safely reopen. The remaining $42,000 will go to Fredericksburg VA Main Street so it can make additional grants to help downtown businesses trying to shift to online sales.

Council member Matt Kelly said Main Street’s grant program had been a success, and it asked City Council for funds so it could offer additional grants. Council member Billy Withers added that a couple of downtown businesses had been struggling because of COVID-19 restrictions, but expect to nearly double their income now that they’ve gone online.

City Council decided at its June 23 meeting to use a portion of its CARES Act allocation to fund a Small Business Assistance Program, but didn’t settle on the amount. It also approved basic criteria for the program, and the city began accepting applications. There were 105 submissions by the July 6 deadline.

The Fredericksburg Commissioner of the Revenue vetted them to ensure the applicants have been in business in the city and have had the appropriate permits and licenses since at least July 1, 2019, are current on all Fredericksburg tax obligations prior to March 1 and meet the rest of the program’s criteria.

Companies receiving a grant must be a for-profit business headquartered in the city with an annual gross revenue that doesn’t exceed $2.5 million and has documented its costs of business interruption caused by COVID-19-related closures. The costs could not have been covered in Fredericksburg’s first round of small business grants.

Bill Freehling, the city’s Economic Development and Tourism director, said 82 of the applicants have qualified. Council members asked that the deadline be extended to give those others a chance to meet the requirements. The three random drawings to select the grant recipients have been rescheduled to July 27 instead of July 17.

The drawings will be held at 2 p.m. and shown live on the Fredericksburg Economic Development and Tourism’s Facebook page. This method was picked because it eliminates subjective bias and has been used by multiple Virginia localities. It also gives the public the chance to watch the drawings to remove any doubt of fairness.

Freehling said the program will provide grants to 45 businesses, and selections will be based on businesses’ annual gross revenue in 2019. There will be 10 grants of $2,500 each for those whose revenue is less than $100,000, 15 grants of $5,000 to those with revenue between $100,000 to $350,000, and 20 grants of $7,500 each for those with revenue between $350,000 to $2.5 million.

The Fredericksburg Economic Development Authority voted unanimously Monday to administer the grants.

The city will hire an advertising firm to create a marketing campaign publicizing the safe reopening of tourism-oriented small businesses and institutions in the city, such as restaurants, stores, hotels, museums and galleries. Freehling told the EDA on Monday the funding could also be used to announce steps businesses and institutions were taking if COVID-19 cases spiked.

“The money needs to be spent by end of this calendar year, so it doesn’t have to be immediately spent,” he said.

Virginia is one of 14 states that chose to share a portion of their federal CARES Act allotments with localities on a per capita basis. Fredericksburg received $2,533,729 in early June, and staff anticipates the city may receive up to $303,268 in additional funds from the CARES Act via separate grant awards and certifications.

These include the Community Development Block Grant; the Help Americans Vote Act through the U.S. Election Assistance Commission; the U.S. Department of Health and Human Services; and the U.S. Department of Memorandum: CARES Act Budget Amendment for Fiscal Year 2020.

The funds represent 2.8 percent of the city’s adopted budget for fiscal year 2020, and any unused funds will have to be returned. Information on how all the city’s CARE Act funds are budgeted is available on the city’s website,

Cathy Jett: 540/374-5407

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