Photo by Jon Fingas
Thursday, October 1, 2020 by Jo Clifton

Questions arise about how BBB administers grants

At Tuesday’s City Council work session, Mayor Steve Adler asked Sylnovia Holt-Rabb, the acting director of the Economic Development Department, to explain what went into the selection of the Better Business Bureau to administer nearly $26 million in federal emergency funds the city received for Covid-19 relief grants for small businesses, nonprofits and creative workers. Council is scheduled to consider ratifying a contract amendment with the BBB at today’s meeting.

The contract has already been signed, but Adler and other Council members said they had received complaints from constituents, particularly members of the music community, about the selection of the BBB. As Holt-Rabb explained, the BBB had the staff and the capacity to do the work required and had the lowest administrative fees of the seven that applied to administer the Commercial Loans for Economic Assistance & Recovery (CLEAR) and Austin Nonprofit & Civic Health Organizations Relief (ANCHOR) program money.

Staffers initially selected a different nonprofit organization to administer relief grants for Austin creative workers. However, according to written materials provided to Council, that organization “experienced several obstacles that hindered its ability to rapidly launch the program. As a result of these unexpected circumstances and an urgent need to rapidly distribute the funds to creative sector workers, EDD staff modified the pre-existing contract with Austin BBB to implement this relief program.” According to the documentation, some members of the music community said the BBB did not have experience administering grant programs. But city staff disputed that assertion, saying the bureau has “a history of dispersing restitution funds on behalf of federal and local government agencies.”

Some music community members also asserted that the BBB lacked diversity, which could dissuade vulnerable minority-run businesses from applying for the grants. In their response, staff said the Austin BBB executive leadership team is primarily female and 44 percent of the staff is nonwhite, “which is slightly above the Austin demographic in general.”

Pat Buchta, executive director of Austin Texas Musicians, told the Austin Monitor Wednesday his organization as well as others, including numerous music venues, did research on the BBB’s experience and found that the group had never previously administered grants. He was particularly critical of the fact that 50 percent of the grants were awarded by a random drawing. He said his organization is hopeful that the city will find a more suitable organization to administer the new SAVES program, which Council is set to approve today.

Pool told her colleagues, “I still have a hope that one of our organizations that are deeply embedded with, for example, the music community, the music industry can position itself to be ready to do this kind of distribution in the future. One of the shortcomings that we were presented with back in June, there wasn’t really anybody in the industry with the familiarity and the granular knowledge that I think would have been helpful.”

Photo made available through a Creative Commons license.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

COVID-19

Economic Development Department: This city department heads up business recruitment, urban regeneration, small business development, arts, and music for the city.

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