A $2.25 million amount that had been paid to Recreation Centers of Sun City West as part of the Payroll Protection Program will be returned.
RCSCW officials learned about the Paycheck Protection Program through the Small Business Administration last February. The loan was designed to provide a direct incentive for small businesses to keep workers on the payroll. The Small Business Administration will forgive loans if all employee retention criteria are met and the funds are used for eligible expenses.
The association moved the program forward and submitted the application for funding to keep employees maintained April 9. Bill Schwind, RCSCW general manager, said the $2.25 million check was deposited into an independent account and was untouched. RCSCW officials submitted for reimbursement and were in a holding pattern before being advised to return the money.
“When we made decisions on the application for loan compliance we factored in if we were going to initiate furloughs or a reduction in force for what we were seeing that would be an enormous cost to have those people brought back in,” RCSCW Chief Financial Officer Pete Finelli said.
Governing board President George Kuchtyak said the practicality of the choices made did occur that when the pandemic hit the country, this was time for the association to show loyalty to employees and keep them employed.
Mr. Finelli said during the governing board workshop Sept. 11 the bank — Chase — that was the underwriter on the loan did not give advice, but as the lender the recommendation was to return it.
Mr. Schwind said as of Sept. 22, RCSCW officials have had four separate inquiries with several agencies that are involved, including legal, audit, the bank and legislative.
“Uniformly, they have all advised us that no 501c4 nonprofit organization was eligible,” he said.