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JDA discusses business support, recovery

By Staff | May 15, 2020

Supporting business recovery and finding ways to meet business needs topped the Rugby Job Development Authority’s agenda at their regular May meeting Wednesday.

JDA Executive Director Liz Heisey reported a small number of programs are still available to help struggling businesses. Heisey said many had already taken advantage of federal programs such as the Paycheck Protection Program, “but they’re leery of taking on more debt.”

Heisey noted the program, which had run out of money last month, “is expected to be completely expended (again) soon.”

“The (Economic Injury Disaster) Loan program directly administered by the SBA also ran out of funding very quickly,” Heisey said in her report to the JDA board. “New applications for a second round is open for ag businesses only at this time.”

Heisey said the Bank of North Dakota still has options for small business owners. One is called the SELF (Small Employer Loan Fund), which helps banks make loans to small businesses negatively affected by the COVID-19 pandemic.

Heisey said restaurants and hair salons were particularly hard hit after they reopened following a seven-week closure mandated by Gov. Doug Burgum.

“Even just doing takeout, (restaurants) were only doing 14 percent of their sales as opposed to last year,” Heisey said, sharing conversations she has had with restaurant owners.

“Now that they’re opened up, they’re only at 50 percent capacity, but (one owner) said for the whole year, they’re only projected to do 50 percent of their sales,” Heisey noted. “They’re struggling immensely.”

The board discussed creating a survey to gauge the needs of local business owners.

Board Chair Blair Brattvet suggested, “Just ask them, ‘With everything that’s happened, what do you think your odds are being in business six months down the road?’ Then, ‘What do you think you’d need to keep you in business?'”

Mayor Sue Steinke said, “Another question to ask is, ‘Did you have to destroy inventory when you closed?’ Because I talked to one restaurant owner, and she literally had to throw some inventory away. Then of course, to open up again, that was a whole new purchase.”

“One of the biggest barriers facing our restaurants right now is inspiring consumer confidence in health and safety. It’s going to take awhile for consumers to feel safe enough to go out,” Heisey said.

The board also discussed changes in consumer patterns caused by the pandemic. Heisey noted April sales tax revenues for Rugby were “still pretty strong,” thanks in part to online sales.

Board member Terry Hoffert told the board he was worried people had become used to shopping online and would shop less in brick and mortar stores after the community reopened.

Heisey said North Dakota State University’s Entrepreneurial Center offers free training for small businesses to “create an online presence.”

“A lot of businesses have had to change business models to adapt to the more restrictive environment. That includes heightened use of social media, smart advertising and ecommerce tools,” Heisey added. “They’re all a must right now to operate under the new normal.”

The board discussed using survey results to create a financial incentive program to support struggling small businesses.

However, they acknowledged finding money for such a program would prove challenging.

“The governor is pushing Main Street and downtown, but (businesses) don’t have a bunch of capital lying around,” Brattvet said.

“They’re not in a position to borrow more money,” Brattvet said of many small businesses. “They were ordered to shut down, but now, there’s not much to help them pay for (the time they were closed).”

Heisey stressed the importance of collecting data through surveys and the U.S. Census to funnel financial assistance to communities like Rugby.

“Anytime you see a survey from the North Dakota Department of Commerce or the Greater Chamber of North Dakota for Main Street Initiative, fill those out,” Heisey said. “Those are the ones that shape our policies. They’re how they know what funding we need. So, they’re really important.”

“I don’t think we realize how much our input matters,” Heisey added.

In other business, the board discussed submitting an application to extend Rugby’s Renaissance Zone property designation for another five years. The program would give property owners five-year property tax breaks when they improve structures within the zone.

A city council hearing for the application will be held June 1.

Heisey presented information on North Dakota’s Care-19 contact tracing app for COVID-19. “There were a few hiccups at the beginning,” she said, “but they’ve been worked out.”

“I would encourage the use of that app. Maybe that could help businesses stay open, too, and increase consumer confidence.”

The board also approved April meeting minutes, the May treasurer’s report and May financials. The board discussed beginning plans for the 2021 JDA budget.

Heisey recommended freezing the 2021 budget, which would include freezing the salary she receives as executive director.

The board also considered a request for support from the American Wind Energy Association. The board asked Heisey to draft a letter to the association indicating support for the alternative energy as part of an “all of the above” energy policy.

The JDA board next meets June 10.

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