Mayor Nancy Vaughan wants to set aside a separate fund for minority owned and led businesses and nonprofits from the $56.6 million American Relief Act money.

But her plan may have hit a bump in the road to her plan to distribute some American Rescue Plan money based on race.

Vaughan went over her plan again at the work session on Tuesday, May 11.  She said the money would be in the form of grants, not loans, and would only go to “minority owned and led businesses” and later added “nonprofits and businesses.”

Vaughan said, “The idea would be that we don’t make the awards, there would be a panel similar to the community resource board, so that there would be other people who would make them on our behalf.”

Councilmember Sharon Hightower suggested that $1 million might not be enough for minority owned and led businesses and also said, “A lot of these don’t want to go through all the hoopla to get $10,000 or $25,000 and make them get an audit that costs $10,000 and that’s unnecessary.”

Vaughan said that the plan would require the businesses to complete a “financial literacy” program before they could get the money and they would have to report back on how the money was spent.

City Councilmember Justin Outling, who is running against Vaughan for mayor, suggested that there were some problems with the legality of giving money to people based on their race.  Outling is a partner in the Brooks Pierce law firm.

Outling said, “There have been increased discussions about providing grant moneys and other things to persons or businesses in accordance with their race.”

 Outling added, “As an attorney it is generally my understanding that even where you may want to do to something in giving benefits or grants based on someone’s race you are not legally able to do so. So I would be interested in the city attorney kind of providing guidance so that everyone on council understands exactly where the law falls in that connection.  So that we can figure out other ways not making decisions based on race that can have the same effects that we desire.”

Outling noted that the city had discussed a program earlier and found a way to work it out so that the benefit was not based on race or gender.