City won't be reimbursed for vouchers, so mayor says council should consider an even bigger grant plan

The vouchers must be spent at local businesses by Tuesday, June 30.

By Aaron Gershon and Al Cross
University of Kentucky School of Journalism and Media

State officials won't reimburse the city the $40,000 in coronavirus relief money it sent residents to spend at local, non-franchised businesses, further opening the way for direct grants to the businesses, Mayor Grayson Vandegrift told the City Council and the news media Sunday.

"While this does not put us out any for the first round of vouchers, since it was funded by our economic-development surplus, it clearly could reshape your thinking on the second round," the mayor said in an email. (The city did not have to make a $40,000 interest payment this fiscal year on the Midway Station industrial and commercial park, thanks to lot sales there.)

"While I think this decision . . . does not account for the fact that a voucher program can help create new long-term clientele in our own city," Vandegrift wrote, "it does open the door wider for a small-business grant program, where we could conceivably use up to $80,000 to boost our local small businesses."

Vandegrift had suggested a grant program to reach more businesses, but the council informally voted 3-2 this month to use federal relief money to do two more rounds of vouchers. When retailers said they needed grants or many of them would go out of business, the mayor said he would propose grants in place of a third round and named a committee to work out details.

The committee (Council Members Stacy Thurman and John Holloway and City Clerk-Treasurer Cindy Foster) is scheduled to meet online at 5:15 p.m. Monday. Vandegrift said its plan and the options would be discussed at the July 6 council meeting.

To help the council decide, he pressed for an answer on reimbursement from the state Department for Local Government and the office of Senate Majority Leader Mitch McConnell, who sponsored the $2 trillion Coronavirus Relief, Aid and Economic Security Act.

"Despite the fact that the language in the CARES Act and the spirit of the law clearly indicate such a program should be eligible," the mayor wrote, "DLG decided after a brief review that it was not eligible." Vandegrift, who earlier said he was 75 percent sure of reimbursement, said he has asked the DLG for an explanation and is waiting for it.

He said DLG's Jennifer Peters wrote, "We appreciate your innovative thinking and applaud your efforts; however, after discussion with the review group, this has been deemed ineligible for reimbursement." McConnell's staff said he favored reimbursement, the mayor wrote, but "They have informed me that the state is the ultimate arbiter of the federal money."

Vandegrift told the council, "I am sorry that I couldn’t present you with the most reliable information sooner than now, but we all know we have to act fast when people are struggling and businesses are threatened. I do hope that if the U.S. Congress decides to add $2 billion more to our staggering national debt, that they hammer out a few details better and create an appeals process that allows imagination to enter the fold."