Santa Clara County to redistribute COVID-19 fines to small businesses

Santa Clara County will begin the process of returning thousands of dollars in COVID-19 safety violation fines back to small businesses.

Supervisors voted unanimously Tuesday to create a grant program that redistributes money collected from pandemic-related health and safety violations back to local businesses. Once developed, the county is expected to partner with local financial institutions and community-based organizations to administer the program.

In the past 13 months, Santa Clara County levied about $5.7 million in COVID-19 safety violation fines, according to county documents, while only about $400,000 has actually been collected.

“When I read press coverage about the outrage over supposed millions of dollars allegedly collected in business fines, and accusations that our county has been hostile to small businesses, it really gives me pause,” said Supervisor Susan Ellenberg.

Ellenberg said the county enacted enforcement measures in the name of public safety and fairness.

“The vast majority of businesses … were complying with the rules that admittedly worked to their economic detriment,” she said. “I stand by our administration on this. We never had the intent to drain millions of dollars from the small business community.”

Santa Clara County came under fire recently after a Mercury News report revealed the county levied more safety violation fines than any other county in the region during the pandemic. Critics say that this approach, rather than education and help with compliance, hurts hard-hit businesses and punishes owners who aren’t native English speakers.

County officials said complaints about COVID-19 safety violations declined significantly in April.

“County administration has consistently represented that revenue generation was never a factor in imposing fines,” a memo to supervisors states.

Ellenberg also pushed back on criticism of the county’s safety enforcement fines. She said supervisors meted out millions more in economic breaks, including investments in a state small-business loan program, eliminating registration fees for weights and measures, and mandating hazard pay at grocery stores in unincorporated Santa Clara County.

Supervisors asked that the county work with experienced organizations that have infrastructure to administer a grant program, such as the Minority Business Consortium, Silicon Valley Coalition of Chambers, the California Rebuilding Fund, the Latino Chamber of Commerce and others.

Board President Mike Wasserman supports the program, but wants to make sure “the monies do not go to businesses that have violated” the county’s health orders.

“We are well aware that it’s going to be a tough economic recovery for many, many businesses and that being fined was a hardship,” Ellenberg said, “which is exactly why our administration has been working extensively with our small businesses to cure infractions and eliminate or reduce fines.”

In a referral to the board, Supervisors Ellenberg and Cindy Chavez wrote the county is shifting from “emergency response to long-term recovery.”

“At this critical juncture, the county has another opportunity, (we would argue an obligation), to do more to help small, local businesses, especially those that have been most affected by the pandemic and do not have the resources or capital to rebuild,” the supervisors wrote.

A final proposal will come before the board for approval on May 25.

Contact Madelyn Reese at [email protected] or follow @MadelynGReese on Twitter.