Pittsfield Small-Business Fund Approved With Stipulation
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The council voted 10-0 on Tuesday to allow Mayor Daniel Bianchi to take $500,000 from the $6.1 million Pittsfield Economic Development Fund (formerly known as the GE Economic Development Fund) to create a new fund targeted to address the greatest areas of need identified by the city's Department of Community Development and the Pittsfield Economic Revitalization Corp. Applications will go through the mayor's office to PERC for review and recommendations.
The fund is intended to jump-start economic development in existing local businesses that have potential for expanding and creating new jobs. Pittsfield has approximately 1,400 businesses with fewer than 50 employees.
From the new allocation to PERC, up to $25,000 can be loaned for working capital, and up to $100,000 could be obtained for capital investments or technical assistance. For capital investments, the business would be required to create one job for every $20,000 loaned within three years or halfway through the term of financing (up to 10 years).
Bianchi encouraged businesses that may have been unable to get loans for enhancements from banks, the Small Business Administration and other sources to apply.
"We can use a portion of this fund to leverage other financing," Bianchi pointed out. "With a bridge from this fund, they might be able to position themselves better to eventually have that traditional financing. I certainly wouldn't discourage somebody because they haven't been able to produce the kind of collateral that a bank may be looking for at this point in time."
Ward 6 Councilor John Krol expressed concerns about ongoing transparency of the fund and accountability.
"Where I'm struggling is handing over the $500,000 without some greater level of transparency," Krol said, "What is the reporting method back to the City Council?"
"Once you appropriate these funds, they are going to be eligible then for either grants or loans as the PERC sees fit," Bianchi responded, "and I hope that the 30-year history of the PERC board gives you comfort there. But as far as letting you know, we plan on having periodic reporting to you, to let you know this is how the money's been spent, the loans, the grants that have been issued."
Krol motioned to amend the proposal to add the stipulation that a "line-item by line-item" report on the uses of the fund be provided to the City Council twice a year.
Plans for publicizing the fund to local businesses that might benefit are still developing, but the mayor said he believes they will be able to get the word out quickly. Already in an episode of his new show on Pittsfield Community Television, which aired immediately prior to Tuesday's council meeting, the mayor hosted Berkshire Chamber of Commerce President Michael Supranowicz and Jay Anderson from PERC to help explain to viewers the terms of financing and the way the loans would be administered.
The amended order to allocate the $500,000 was approved 10-0, with at-large Councilor Barry Clairmont abstaining because of his position as treasurer of the PERC board.
"I'm optimistic that this will be a very successful program," said Bianchi.
Tags: PERC,
