CHEYENNE – Nearly a year after the COVID-19 pandemic began in Wyoming, thousands of businesses statewide have received a boost through funding that arrived via last year’s federal CARES Act. A portion of them, however, have now been asked to pay some or all of that money back.

Roughly 225 Wyoming businesses have been asked to pay back funding that was given to them through the Wyoming Business Council, the entity charged with administering the state’s grant programs throughout the COVID-19 pandemic. In total, roughly $3.5 million in funds was returned voluntarily by businesses, while 175 other businesses have been asked to give back about $9.7 million following third-party audits, according to WBC data provided to the Wyoming Tribune Eagle via a public records request.

The reasons for the returns varied, according to Wyoming Business Council CEO Josh Dorrell. Some of the grant programs required businesses to project their lost revenues for the remainder of 2020, and business owners occasionally miscalculated their estimates. Meanwhile, others lacked a full understanding of the programs’ spending requirements.

“Even with the number of webinars and news stories and radio programs and everything that we did trying to make the application process as simple as possible, you’re still going to have folks who either don’t fully understand it, or maybe they weren’t able to work with a banker or an accountant,” Dorrell said in an interview last week.

“In some cases, we did have those cases where a professional looked at it, and they just missed some things.”

“So, I think most of them were honest mistakes, but at the same time, they were mistakes,” he added.

The money requested to go back to the Wyoming Business Council represents a small fraction of the funding disbursed through the state’s three largest grant programs. Of the roughly $425 million doled out through programs established by the Legislature during its special session last spring, about 3 percent resulted in either voluntary paybacks or requests for returns, according to state data.

As of mid-April, 54 businesses had paid back all of the money that was either used improperly or unspent by the Dec. 30, 2020, deadline, according to Dorrell. Another 34 businesses sent invoices by the Wyoming Business Council had yet to respond, and 25 businesses had entered payment plans to repay the funds by June 30, the last day of this fiscal year.

In Cheyenne, the business that had to pay back the most money was Frontier Trampoline Park, which opened just a month before the onset of the COVID-19 pandemic in the state. Frontier Trampoline Park had to pay back roughly $231,000 of the maximum $300,000 award it got through the state’s Business Relief Program.

“We had to use this money to keep our doors open,” Frontier Trampoline Park co-owner Kat Jaber said in an interview. “We did not spend the money in doing things that we weren’t supposed to ... they said that only $70,000 of the funds was used for COVID expenses, that we could not use it for rent, utilities, all of that stuff.”

The Business Relief Program provided funding to businesses that could “certify that actual losses were incurred due to the required closures,” according to the WBC website, but the specifics of what spending qualified were murky. For example, Frontier Trampoline Park owners had to continue to pay for rent and utilities during the park’s two-month closure, Jaber said, but the relief funds used for those expenses were deemed outside of the permitted uses.

Jaber said her business was among those that have already paid back their funds, albeit with some help from their bank, though she noted the assistance still caused their finances to take a hit. While understanding that it was partially her own fault for not understanding the program’s rules, Jaber said the process was still not straightforward.

“Unless you’re some sort of attorney, I don’t even know how anybody could ever understand that application and what any of the terms meant,” Jaber said.

“It was just a nightmare from the beginning, and, unfortunately, our business had to suffer because of it,” she added. “Granted, I’m thankful that they had the opportunity to supply these grants for businesses. Essentially, it just floated us for a couple of months until we had to pay it back.”

Meanwhile, other businesses have opted for a months-long payment plan to get the money back to the state. The business required to pay back the second-highest amount in Cheyenne was Nipa Hut, a Filipino restaurant that opened in late 2019. The business was asked to pay back roughly $175,000 of the $268,000 it received through a relief grant, according to a letter provided to the WTE.

Nipa Hut’s co-owner, Jhun Vinluan, said that when applying for the grant program last spring, he projected his expenses and lost revenue for the remainder of 2020 with the expectation of substantial losses after having to close Nipa Hut’s food truck and in-person dining. For his business, the relief programs were its only option, despite the paperwork being “so complicated,” he said.

“If we didn’t use the money then, we could not have gone on in the pandemic,” Vinluan said last week. “We wouldn’t (have given) support to our employees, to the rent and everything.”

Last week, Vinluan’s business entered a payment plan with the Wyoming Business Council to pay back a share of the grant money by June 30, the deadline for entities to pay back any misused grant funds. At that point, the Wyoming Attorney General’s office could pursue legal actions against those businesses that have failed to meet the deadline, though it remains to be seen whether any suits will be filed.

“We’ll provide a final report to the Attorney General at the end of this (fiscal year) so that they have everything,” Dorrell said. “That’s up really to somebody outside of the Business Council to decide on what actions will be taken next. Frankly, I don’t know what actions will be taken next.”

Among the businesses that were audited, there were “a number of cases of fraud identified,” Dorrell said, with some actions being pursued by federal agencies, as well as a few counties, to address those cases. Dorrell was unable to comment on any of those ongoing investigations.

The money that goes back to the state will then be used for other eligible expenses under the CARES Act, which initially had a spending deadline of Dec. 30, 2020, that was then extended to the end of this year. In total, the state has spent roughly $1.16 billion, or about 93 percent, of the funding Wyoming received through the CARES Act, according to a report from the State Auditor’s office earlier this month.

As the remaining funds from the CARES Act get spent, Wyoming is also preparing to receive an additional roughly $1.1 billion through the American Rescue Plan relief package passed last month, with fewer spending restrictions than under last year’s federal relief. While the state has yet to receive that money, and plans for it are in early development, Dorrell said he hopes the Business Council will be “very involved” with the upcoming round of relief.

“With the CARES Act, we were really constrained by providing relief kind of looking backward ... whereas these funds – we don’t have full Treasury guidance yet – but these funds look to be more focused on stimulus, which is really exciting, because we know that there are businesses that are still struggling, and we want to be able to help,” Dorrell said. “At the same time, we’re sitting here going, ‘Look, we’re going to get this money and need to do something that can impact us five, 10, 20 years down the road. Let’s really think about that.’”

Dorrell was also hopeful for what the remainder of this year could bring for Wyoming businesses, and he’s seen encouraging signs, such as on a recent trip to Powell and Cody, where restaurants and retail shops were humming with customers.

“I’m starting to see that optimism that we made it through 2020,” Dorrell said. “It was really, really tough, and now we’re starting to utilize some of the lessons we learned to be stronger in 2021.”