The Sidney City Council approved the appeal of Brushed Salon for small business assistance through LB 840 funds by a 3-2 vote Tuesday night. 

The decision came after almost 30 minutes of discussion during the meeting and means that Brushed Salon will receive the funding they applied for to help them through the COVID-19 pandemic. 

Brushed Salon appealed to city council after their application was denied by the economic development committee, who makes the original decisions to approve or deny businesses applications.

Economic Development Director Melissa Norgard said that Brushed Salon's application was unanimously denied.

Mike Palmer, speaking on behalf of himself and his wife, who operate Brushed Salon, said they were denied because they did not meet the number of employees needed to qualify for the assistance. Under the plan, businesses must have between 2 and 25 employees. 

For many salons, the people that work at the location, outside of the owner, are independent contractors and not employees, meaning they would not count toward the number needed to meet the guidelines. 

The Palmers say they run the business as a joint venture, making them both employees of the business, meaning they would meet the number of employees guideline. 

"I do work at the salon from time to time," Mike said. "Obviously, everyone knows Megan is down there cutting hair. The question is, how do you determine who is an employee? The guidelines that you laid out doesn't really stipulate what it is. I work at the salon, doing all the bookwork, inventory and such of that nature."

The other snag involved the language in the city's economic development program. The language that was under debate reads as follows:

 

The Economic Development Program may include, but shall not be limited to, the following activities:

(1) A revolving loan fund from which low interest or forgivable loans will be made to qualifying businesses on a no more that a one for one match basis from the grantee business for fixed assets or working capital or both or for loan guarantees and based upon job creation and/or retention, said jobs to be above the average wage scale for the community according to the Nebraska Department of Labor's Occupational Employment and Wage Rates.

 

This means under the plan the city can use economic development funds to to provide low interest or forgivable loans to qualifying businesses based upon job creation and/or retention.

The jobs created or retained must also be above the average wage scale for the community for their occupations. 

City Attorney Jay Leef said she did not feel Brushed Salon fell under that definition because there is no way to tell if they meet the average wage scale. 

"Unfortunately with a sole proprietor situation where there are independent contractors, we have no way of ensuring the jobs will be above the wage scale for the community...," Leef said. "So I don't think they fit within the plan... There's no way, based upon the information that's presented on their Schedule C that you can make them fit."

"I absolutely agree that they are, in this particular case, among a segment of the population that is most significantly affected, but I don't believe our plan allows us to give the funds," Leef said. 

Leef told the council they could amend the language in the plan, but that would require them to approve doing so and then a vote by the public. 

The Palmers argued that the city council could take action because they weren't limited by the definition of what Leef had laid out.

"I think the stickler there is 'may include, but shall not be limited to,'" Mike said. "I think that leaves it pretty open for interpretation of what the city council can do."

The council considered the arguments, but to some it wasn't difficult to find an answer. 

"It sounds like we're getting legal advice from the city attorney that this doesn't measure up, and the Economic Development committee has made their recommendation," Vice-mayor Joe Arterburn said. "I think the decision is clear."

Arterburn made a motion to deny the appeal, but the motion failed by a 2-3 vote. A motion then to approve the appeal was passed 3-2.