Whether the city of Delaware should participate in a county loan program designed to help reopening small businesses stay afloat amid the COVID-19 coronavirus pandemic was the focus of a debate May 13 by City Council members serving on the city's finance committee.

Delaware County commissioners created the program with a resolution May 14.

County economic-development director Bob Lamb explained the program during the committee meeting, which was held remotely and livestreamed on the city's Facebook page.

The loan money may be used to cover up to four months of rent, mortgage and/or utilities payments, he said. The loan terms would extend five years at an interest rate no higher than 4% and an initial rate of 3%. First payments also may be deferred up to six months.

The loans would be funded by money contributed from the county and its municipalities, he said.

On May 15, Lamb said Orange and Liberty townships had agreed the previous day to contribute $250,000 each. Lamb told the finance committee the county hopes for a similar contribution from the city.

He said county leaders also hope to receive matching funds from Jobs Ohio, a private, nonprofit economic-development organization.

The county reached out to several banks, he said, and Buckeye State Bank will provide the loans and review each loan application.

If Jobs Ohio provides matching funds, Lamb said, the county envisions loans ranging from $10,000 to $25,000.

During the commissioners' May 14 meeting, it was estimated 200 to 220 individual loans would be created.

Lamb told the finance committee the main goal is to provide relief to local small businesses that have suffered losses during the state's pandemic shutdown.

"Our No. 1 priority here is to get money into the hands of our small-business community. ... Our businesses are in a really tough spot right now," he said.

Council member Kent Shafer said he's heard from businesses that might have trouble reopening.

"From what I understand from surveys and other information I'm getting, we've got some businesses in our downtown and probably elsewhere that, at this point, are not sure they're going be able to reopen and survive," he said.

The county plans to act quickly, Lamb said.

"Our goal is to get the money to the business community as quickly as possible," he said. "The moment we get a hard commitment from Jobs Ohio, we're opening up applications."

Council member Lisa Keller objected to several points of the loan program.

She said the city had known about the program for less than 24 hours at that point, and "I have not seen a single thing in writing. Why are we talking about this like we're about to spend ... other people's money before a single one of us has had the chance to look into it or read a single thing about this?

"The city of Delaware may end up getting zero dollars. ... This is not our only option," she said.

During a full council meeting May 11, the possibility of reviving the city's recently inactive revolving-loan fund to aid businesses was discussed.

Councilman George Hellinger agreed with Keller on May 13, saying decisions made quickly are not always ideal.

"There's a lot to be said for slowing things down," he said.

Hellinger said he would prefer to see the county program have a sunset provision so it doesn't become "a nebulous entity with a life of its own."

Delaware economic-development director Sean Hughes said the city would be challenged to operate a similar program in a timely manner.

He said it has taken six to nine months to get loans awarded under the city's revolving-loan program, which is federally backed and requires federal reviews of loans.

The city could explore setting up a loan program with the Ohio Economic Development Institute, he said, which usually is not competitive with interest rates. Shafer said unlike the county, the city has no program in place and can't establish one in a reasonable amount of time. If the city could establish a program, it probably would lack the favorable terms of the county program, he said.

If the city does participate in the county program, he said, it would take only 10 loans of $25,000 each to ensure the city's financial contribution stays in Delaware.

City attorney Darren Shulman cautioned against council approving participation in the county program by a single emergency vote conducted during a special meeting.

The city could be accused of not being transparent, he said, while a first reading at a special meeting, with a vote held during a regularly scheduled meeting, "doesn't ruin anybody's ability to participate."

Lamb said the committee forming the county program is working daily and will present all related documents to the city as they are completed.

The county would welcome the city's participation on the city's timetable, he said, but will not delay the program's start.

A county press release said a committee overseeing administration of the loan fund will include county administrator Michael Frommer, Lamb, local businessman Donald E. Rankey Jr. and up to four representatives from other entities that contribute at least $250,000 to the fund.