This is sort of a TLDR for the .01% of people who drill down. If you write what I do, angry people will always say you over-simplified or didn’t provide enough detail and so on. Which is often true. You cannot help but do those things in any short form article. So this is some detail.
Many people have responded to my writings about GRO with comments along the lines of “We need more transparency!”
There were 26 applications and 26 acceptances. No denials. That in itself is actually a problem. Because there are close to 32,000 currently licensed businesses in Des Moines. No, many of them would not have qualified under any circumstances. But hundreds surely were at least plausible.
I have no complete statement as to the efforts the City made to reach out to the business community about the program. But this result is completely predictable if you do not do an active outreach program. It doesn’t just look bad, it is bad for reasons discussed below. That is one reason why MRSC recommended that a 3rd Party professional administer the program.
I had an interest in business grants as soon as the pandemic began. I attended my first planning meeting involving ‘business grants’ back in April of 2020–along with the City planner who eventually helped create the GRO program along with our City Manager and the Highline College SBA person. At the time, everyone in the room agreed that ‘outreach’ would be key. I told one 2civic leader that I would be willing to go door to door if necessary to make sure that every business across town was made aware. That was my level of passion on the issue.
Initially, the Council majority was lukewarm to the entire notion of business grants. They wondered if it was even the place of the City to do such a thing.
In May, the administration announced that they were working on something. I would periodically ask “how are things going?” and the administration would say they were working on it, but did not unveil ‘GRO’ until August 17th. I immediately asked for information on the program:
- What were the requirements?
- What was the outreach?
- What was the scoring system?
- What was our equity policy?
As so often happens, I was ghosted. I went so far as to ask from dais as to when the Council might receive those policies. And I was told by the City Manager, “…at some point.”
The Council was told by the City Manager that the awards had been chosen and the checks already disbursed. He did not reveal the names or amounts. The Mayor apparently did a photo op with several businesses but did not inform the Council. The first time the public became aware of the recipients was with an October 16th Press Release. I continued to press for answers to the above questions and continued to get nowhere.
So in January 2021, I did a public records request (the fact that a Councilmember should have to do a PRR to get this information, should drive voters insane.)
Let’s just say that I did not receive a complete response. And… if you do not feel like you have received a complete response to a PRR, your only choice is to go to Superior Court. Which sounds tempting, but as an elected, you also gotta take into account how it looks to embarrass the City like that.
But the information I received created almost as many questions as it answered. Here are a few:
- There is no scoring system. The materials provided by each applicant vary widely. You can’t tell how they were judged for worthiness. There are links to various private Google Drive files, but I can’t see those. And there are references to various Zoom meetings where the actual process and decision making were discussed, but apparently no recording was made. All I can see is that every applicant received what they asked for… or more than they requested. 5I saw no denials.
- Some applicants received waaaay more than they requested. One guy asked for $2,500 and received $25,000. There is no explanation as to why he received 10 times the requested amount. (Seriously?)
- There is no mention of how applicants found out about the program.
Discovery and outreach…
I’ll just focus on that last one here. The term of art for ‘how applicants found out about the program’ is discovery. I have no way of knowing how the applicants discovered the program. And that matters.
But first, there was also no mention of what efforts the City made at outreach–again, one of my original questions. I asked the City repeatedly what efforts it had made to advertise the program. As far as I can tell, the only efforts seemed to be to put the notice on the web site and the City’s Facebook Page; what’s known as a traditional passive approach: post a public notice and you’ve done yer due diligence.
Now, most people, especially business owners who are working their asses off 14 hours a day, do not just happen to go to the City web site or even related social media pages every day. Shocking, right? 😀
The one business owner who got publicly upset? His family is super-active on social media and volunteers for numerous city-related stuff. There was no way he was not going to be among the first to discover the program. I’m not being snarky here. I’m glad they got the helped they needed. But this is a real point. I want the people who are digitally clued in to recognize that you are outliers. You are, by definition, elites in Des Moines, because you tend to know things and people that most of us do not.
My point is that all the efforts the City made at outreach were passive and not active. And if you do it that way you get just what happened–26 people, almost all clustered around MVD, with some connection to the City… and yeah, a high likelihood of campaign donors. Because that is exactly the set of people who will hear about the program if you take a passive approach.
Don’t buy it? It’s exactly the same thing that happens with public auctions for stuff like property and automobiles. You almost always get the same people (professionals), because… again, how many people actually read “public notices”? Only the outliers and the friends they clue in. Which is why they get ‘all the deals’.
Again, we have close to 2,000 registered businesses here with only 26 winners. So it’s a lot more than transparency. It’s game theory.
To be clear, I am not saying that some evil guy ‘hand picked’ 26 businesses of his closest pals. This strikes me as a poorly designed game where the rules heavily favor a certain outcome. I’m not splitting hairs here: if the results are the same, they’re both ‘hand picked’. Whether someone intended that result or not is irrelevant. What matters is that when you design a program like this with no active public outreach, you are almost certain to get a 4‘hand picked’ result.
That other number…
I’m seeing some eye rolls. Fine. But there is another uncomfortable truth: this was a zero sum game. The City received roughly $987,000 in CARES funding. The administration spent what it needed on salaries to avoid layoffs (well done!) So one assumes that the City Manager simply decided to spend the entire remainder of $500k on GRO recipients. Sounds fantastic, right? Given the low number of applicants, this allowed a 100% approval rate. It allowed most businesses to get the maximum amount ($25,000). It even allowed some businesses to get more than they requested. Winner, winner, chicken dinner!
OK, about that dinner: If more people had been aware of the program, more would have applied. And again, the dinner was fixed at $500k.
So let’s keep this simple. Let’s say another 26 businesses had applied and that they had all similar application profiles. Now what?
- Do you give each applicant half their dinner?
- Do you start being more rigorous in your vetting so that some people get to have dinner and some do not?
There are many possibilities. And there’s also the fact that if you double the number of applicants, you significantly increase the staff and consultant time in administering the program. Does that double? Do you have to find ways to speed the process? Does that mean having a more standardized (and more rigorous) application which the applicants would find more demanding?
Look, the important thing is that the moment you have more applicants, the whole program becomes more expensive, more complex, more contentious and frankly… a whole lot less fun for everyone involved. Because now you have real winners and real losers.
And for me this is the part that makes me most cranky. So let’s cut the comedy: It was not in the self-interest of either the City or any business who received a grant to have the applicant pool increase. Having a low number of applicants was easier. For everybody.
If that would’ve happened, businesses might’ve received less, they might’ve received nothing. Or, pay attention here, if they had again received the full amount, they would’ve been subject a bit more scrutiny than what happened which was basically, “Everyone’s a winner!”
I’m not saying anything untoward was going on. I’m just saying, again, why MRSC recommended that we hire an independent 3rd Party administrator. Because those are the incentives.
But the Mayor and City Manager were so excited with the results, they just gushed at all the above features. And given that, one has at least consider the possibility that the lack of outreach was not some oversight. Remember: the City took at least four months to design the program. This was not something thrown together over a weekend. It wasn’t like, “Sorry guys, this is the best we could do on short notice. Hope it’s OK!” No. The City and majority were over the moon at the fact that the administration “took the extra time to do it right.”
Curses! Foiled by altruism…
After the checks were handed out, I spoke with two businesses who I had told about the grant just before the deadline (they were unaware of the program), but ultimately chose not apply. Why? “Some businesses are probably hurting way more than me.” That’s a real quote from a guy who is now kicking himself that he did not apply.
There’s also this: some businesses I talked to, frankly, had to be begged to obtain help–some because they’d had a terrible experience with other State and Federal grant programs which were either confusing or simply did not deliver.
Because, remember that back in August 2020,a lot of people thought the pandemic was might be under control. The idea that there might be not one, but two subsequent waves, that were worse than the initial wave? A lot of, frankly, were in a bit of denial. So at least some businesses, in my opinion, should have received a more active message, “Dude, seriously, you need to apply.”
So when these business people see that some applicants got more than they requested? Yeah, they’re not too thrilled.
But for reasons that should be obvious, businesses will never complain.
And again, all of the above is why MRSC recommended that the City hire an outside agency to administer the program.
I can see a certain number of readers saying, “Nonsense. Everyone had exactly the same access to the City web site. There was equal opportunity. If some people didn’t find out about it? Maybe that’s sad, but it’s not unfair. The program was completely fair.”
It’s a lifeboat, not an auction…
I must disagree. This was not a public auction where a few people gather to get great deals on distressed property. GRO was meant as emergency relief. COVID relief grants were meant as a life line for businesses that were in danger of going under. And thus, a much higher standard of outreach should have applied. You have to make every effort to reach every business in Des Moines.
Even if you’ve never been on a boat, imagine this:
You’re on a boat on a very foggy day out on Puget Sound. Can’t see your hand in front of your face. Suddenly you hear people in the water. Sounds coming from all over the place. 1So you stop the boat, throw out some life preservers and say, “Here we are!”
Now some of those people are near enough so that they hear the sound; or maybe they knew in advance that you had planned to be in that spot. Either way, they know to swim to where you are. They will be saved.
Others do not. They have no idea that help is even out there. So unless you move the boat to where they are? Oops.
You don’t know what you don’t know
Even if the City came forward with tomorrow with completely reasonable explanations for all my questions right now I would not care. And neither should you. The fact is that the City did not provide its electeds with full information about the program design. Even after doing a public records request I do not have answers to the issues I raised. That is what matters most.
And to summarize
- Most electeds did not bother to even ask for it. I can question their lack of curiosity, but whatever.
- And the one who did, was stonewalled by the administration. That just bad.
- And when that one elected went to his colleagues in the majority and asked them to help obtain that information? They refused. That is intolerable.
And about those donors…
Now one of the recipients was very upset that I referred to these twenty six as ‘the lucky few’. That’s a fair point. ‘Luck’ had little to do with the selection process. Perhaps ‘fortunate’ would have been better.
He was also especially offended that I mentioned “look at the campaign donors”. And here is my response, not to any person, but any organization that receives public money.
- You receive a grant from a government.
- You then make a significant donation to a candidate/elected in the next election.
- An elected representative from the opposition party (who is also responsible for oversight of that grant) requests routine information from the executive.
- The executive refuses. Repeatedly.
- So that same, cranky elected asks your candidate/elected, the guy you just donated to, for assistance in obtaining that information from the executive, and your candidate/elected also refuses.
If that sequence of events occurs? You should write the executive, and your candidate/elected, asking the executive to comply fully with the original request for information.
Because if they don’t? If they don’t happily and with all due speed cough up an appropriate request for information? All that does is create instant and totally reasonable skepticism from the elected, both in your candidate, the executive and, unfortunately you.
Now if people say to me, “I had no idea about any of that crap. I hate politics.” or something along the lines of, “You should’ve just asked me about it. Everybody in town knows me.” or even, “You hate business.”
Sir, I am not angry with you for not following politics. So please don’t be angry with me for just doing my job. The moment the above sequence events happened, that business person enters the conversation. I cannot just go and talk to you about it and ask for your explanation and call it good. That’s not how public money works. And I’m sorry. It has nothing to do with you personally.
But if one still does not see this, forget that we’re talking about a ‘small town’. Just substitute the word Senator and President for ‘elected’ and ‘executive’.
It is exactly the same. I know people like to think of our Councilmembers as sort of small town volunteers. But in reality, we seven are the sole oversight of a $100M corporation and executive with extraordinary authority. It’s my job to raise these kinds of concerns.
1This is not the correct lifesaving procedure, by the way. 😀
2You do understand how much I loathe using euphemisms like “civic leader”, right? But the moment you ‘name names’ you get angry phone calls like, “Dude leave me out of this!” They don’t dispute what I’m writing. They just don’t want to get into ‘politics’.
1This figure is not meant to be precise. The number of active businesses is constantly shifting. People have licenses they don’t use or have bedroom operations.
4In techno-babble, a passive approach strongly selects for a non-random distribution.
5Actually, three obviously not credible denials, but they only show up in the final version of the spreadsheet, not in earlier drafts. But one isn’t located in Des Moines and I don’t even see an application for the others.