The Spokane Valley City Council opted Tuesday to spend much of its nearly $3 million in COVID-19 aid funding on housing assistance and grants for small businesses and nonprofits.

Spokane Valley received about $2.9 million from the Coronavirus Aid, Relief and Economic Security, or CARES, Act. The city can spend the money only on COVID-19 related matters, cannot spend it on previously budgeted items and must use it by Oct. 31.

To decide how to allocate the money, council members used a card to fill out how much funding they would like to spend on agreed-upon categories, and city staff then averaged each card to come up with a total for each category.

The City Council’s averages came out to roughly $734,000 on rental and mortgage assistance, $260,000 on utility assistance, $237,000 on food security, $839,000 on small business grants, $412,000 on nonprofit grants, $81,000 on school districts and $75,000 on hospitality and businesses that won’t open until Phase 4 of the governor’s re-opening plan. The city set aside the remainder of the funding to cover other COVID-19 expenses.

Council members agreed that small businesses that receive grants must have 18 or fewer employees and that the grants could be for up to $7,158.

Councilwoman Brandi Peetz said she hopes the city can get funds dispersed as soon as the city works out the logistics of new contracts and would like to contract with an outside business organization, such as a chamber of commerce, to distribute the grants.

“I don’t think we need to reinvent the wheel here,” she said. “If there are already people doing the work, we need to partner alongside them and get this money out as soon as possible.”

Spokane County has already approved a countywide $10 million small business grant program, but Peetz said she wanted to make sure Spokane Valley businesses that may be missed had an opportunity for some funding.

According to Peetz’s recommendation, she would have allocated $500,000 for mortgage assistance, not allocated rental assistance funding and spent $1 million on small businesses grants. The City Council opted to combine the rental and mortgage assistance categories.

Spokane County will soon distribute the rental assistance funds it received from the state and U.S. Department of Housing and Urban Development, and Peetz said she wanted to focus on areas that had received less funding.

“I want to make sure we’re maximizing our money and helping the broadest amount as possible because I don’t want anybody falling through the cracks,” she said.

Council members did not vote on the amounts, agreeing to approve contracts and applications from individual nonprofits that would deliver these services to the community at a later date. They also agreed that the averages would be flexible and could be changed as they and the nonprofits they eventually contract with learn more about the community’s needs during the pandemic.

Councilman Arne Woodard said providing aid for small businesses and housing was the most important use of the money. According to his allocation recommendation, Woodard would have budgeted $1 million on rental and mortgage assistance.

“I’m always going to come from a position of, if we keep people in their homes and in their apartments, they’re better off than on the streets,” he said.

Woodard also recommended $1.2 million go to small business grants.

Though both his top two issues received less money than he recommended, Woodard said he felt the process went well and that he was comfortable with the end result.

Councilman Rod Higgins said he would have preferred the hospitality section be folded into the broader category of small business grants because the city shouldn’t single out a type of small business when granting money.

“I saw no reason to single out a group like that, and that sets a very bad precedent,” he said.

Mayor Ben Wick, who proposed the hospitality and Phase 4 business category, said the city’s lodging tax is anticipated to be down 50% and that many of the events local hospitality businesses depend on have been canceled. He argued that businesses that can’t open until Phase 4 of the governor’s re-opening plan also need extra help.

“All businesses are important, but you’ve got to give hope to those that don’t have much in sight for when they can even try to re-open,” he said.

Wick said he hoped the $75,000 set aside for hospitality and Phase 4 businesses could also be used in part for a small marketing campaign to encourage people to stay at Spokane Valley’s hotels and visit the Spokane River.

Wick said his goal is to see the funds dispersed by early August.