Submitted By
Steve Drazner, Chief Financial Officer and Tammie Grossman, DCS Director
Agenda Item Title
Title
Review and Discussion of Budgeting for the Village’s Allocated Share of Coronavirus State and Local Recovery Funds totaling $38,984,402
End
Overview
Under the American Rescue Plan (ARP) Coronavirus State and Local Fiscal Recovery Funds, the Village of Oak Park’s allotment is $38,984,402, of which, $19,492,201 has already been received. A presentation will be made about the Village’s lost revenues as it relates to the allocation of ARP funds. The allotted distribution may be used on either lost revenue as defined under US Treasury guidelines or eligible expenses. Staff recommendations are presented in this agenda item for Village Board review and discussion only with no action required at this meeting.
Anticipated Future Actions/Commitments
At the July 19, 2021 Village Board meeting, a Budget Amendment for FY21 will be presented to authorize the creation of the ARP Fund, and appropriation of replacement revenues for FY2020 as compared to FY2019 and the appropriation of funds for the remainder of FY21 for to help support Oak Park small businesses and not-for-profits recover from the Coronavirus emergency to create a Business and Not-for-Profit Coronavirus Recovery Program (BNPCR) as detailed below.
During the FY22 budget process, which will begin with a Village Board discussion on July 26, 2021, the Budget process will include recommendations for Board consideration of supplemental ARP appropriations to be included in the FY22 and FY23 budgets. It is noted, that all funds must be committed by December 31, 2024.
Body
Report
Under the American Rescue Plan (ARP) Coronavirus State and Local Fiscal Recovery Funds, of the approximately $65.1 Billion that is being allocated to municipalities nationwide, the allocation to the Village of Oak Park is $38,984,402. This total allocation is paid in two installments over a twelve-month period and thus far, the Village received half of the total allotment equaling $19,492,201. There are several rules and conditions for using this money and a high-level overview is as follows:
1) The funds must be obligated or committed by December 31, 2024, and expended no later than December 31, 2026
2) An initial, or interim report to the US Treasury is due by August 31, 2021. Thereafter, there will be quarterly reporting requirements on expenditures through December 31, 2026.
3) The initial/interim report due by August 31, 2021, must include obligations/expenditures (i.e. a budget) for the allocated funds based on various expenditure categories provided by the US Treasury, including estimated lost revenues.
The following are the broad categories for eligible uses of the ARP money:
1) Replacement of lost revenues. The guidelines include very specific calculations that must be used to determine lost revenue. In summary, this includes using the pre-pandemic Fiscal Year 2019 as the “base” year and compounding onto the base year 4.1% each subsequent year for December 31, 2020, 2021, 2022, and 2023. The total calculated revenues in aggregate for these years is then compared to actual and/or forecasted revenues in aggregate and any shortfall is considered “lost” revenue.
2) Expenditures that support public health costs in response to COVID-19 (i.e. vaccinations, education, food/rental assistance, emergency grant relief).
3) Expenditures for economic mobility by addressing negative economic impacts created by the public health emergency (i.e. homelessness, mental health, business retention, etc.)
4) Expenditures related to health equity, primarily water/sewer and broadband infrastructure costs.
Based on an initial assessment and estimate by Staff, it appears that the Village will be able to apply a total of approximately $31 million of the $39 million allocation towards lost revenues broken down by Fund as:
General Fund $24,664,000
Capital Improvement Fund $988,000
Sustainability Fund $209,000
Parking Fund $5,402,000
TOTAL $31,263,000
Lost revenues will be accounted for by utilizing interfund transfers out of the ARP Fund to the Funds noted above. After reducing the $39 million allocation by these forecasted lost revenues, approximately $8 million is expected to remain which can then be used on eligible expenditures. It is important to note that there are substantive reporting requirements imposed on the Village related to the allocation and distribution of the ARP funds. As such, staff will also make recommendations about what administrative resources will be necessary to administer the ARP funds.
In regards to eligible expenditures that are not classified as lost revenue, staff has met and discussed some initial recommendations to the Board for budgeting and spending the $8 million highlighted as follows:
$500,000 to Housing Forward to serve homeless and at-risk of homelessness households facing a negative economic impact due to COVID-19. On June 15, 2020, the Village Board awarded Housing Forward $400,000 in Community Development Block Grant-Corona Virus (CDBG-CV) to provide rental, mortgage, and utility assistance to low-and moderate-income households. To date, Housing Forward has spent approximately 25% of this funding. Housing Forward reports that they have used State and Cook Assistance primarily over the last year because of the shorter time frame and are now spending the Village CDBG-CV funds. If awarded ARP funds, Housing Forward will provide a combination of direct assistance for food, rent, and security assistance for individuals and families leaving homelessness and to prevent eviction. Additional direct assistance will be used for transitional wages for those enrolled in Housing Forward’s Career Passport program job training program. Housing Forward also proposes to use ARP funds to provide greatly needed case management and life skills services to improve housing stability for 33 individuals who are homeless with a documented disability who received a mainstream housing choice voucher through the Oak Park Housing Authority.
$85,000 to Beyond Hunger to offset the costs (approximately 9%) of providing low-income Oak Parkers critical COVID-19 response services to enhance food security. Funding will cover staffing, volunteer costs, supplies, food, printing, and indirect costs such as rent and electricity. On July 20, 2020, the Village awarded Beyond Hunger $85,000 in CDBG-CV Funds to the nutrition needs of 300 homebound, low-income seniors, people with disabilities, and those who are experiencing homelessness by providing them with 40 lbs. of groceries monthly. Beyond Hunger responded to the surges in food insecurity throughout the pandemic and is preparing for the increase when ARA benefits end. Beyond Hunger adapted their Food Pantry to promote health and safety, implementing a drive-thru distribution model alongside a pedestrian pantry. Together these models require significant increases in staff and volunteer time as well as costs (cardboard boxes, drop-reefer trailer rental for cold storage, etc.). With older adults and those with disabilities already at greater risk of hunger than other populations, COVID-19 further strained their ability to access adequate nutrition. The organization supported such individuals in isolation by tripling their Home Delivery program during the pandemic and worked to offset isolation with monthly phone calls and nutrition education offerings. Connecting people to SNAP (Food stamps) and other federal benefits proved an integral part of our COVID response that will continue next year. Finally, Beyond Hunger worked with local schools (public and private) to ensure children receive meals in the summer when school is not in session. (Because we do not track individual data on these children, we have not counted them in grant reporting numbers here.) The combined cost to operate the Food Pantry, Home Delivery, Volunteer, Nutrition Education, and Social Services programs is $2,007,800 of which $982,212 is cash (in-kind food donations make up most of the remainder). This fiscal year (July 1, 2020 - June 28, 2021), we have served 9,578 unique (35,000 duplicated) individuals, 1,602 of them Oak Parkers (7,070 duplicated) or 16.7% of total unique clients (20% of duplicated visitors). We estimate those numbers will increase in the coming fiscal year.
$550,000 to help support Oak Park small businesses and not-for-profits recover from the Coronavirus emergency to create a Business and Not-for-Profit Coronavirus Recovery Program (BNPCR). On June 15, 2021, the Village Board awarded $300,000, and an additional $279,647 was approved on October 5, 2020, to help businesses using the CDBG-CV funds. The CDBG-CV funds were restricted in that the business had to show the creation or retention of a low-wage job. At present, the Village has disbursed all but less than $77,515 with $20,000 in pending applications. The ARP-funded program would focus on the following: 1. $300,000 available to assist licensed Oak Park businesses in paying off past-due rent or mortgage payments up to $5,000 per business. (This amount would allow approximately 60 businesses to be assisted); 2. $150,000 available to assist licensed Oak Park businesses by reimbursing for costs related to PPE and safety equipment installation expenses that they have incurred (This amount would allow at least 50+ businesses to be assisted); and 3. $100,000 available to assist Oak Park not-for-profits by reimbursing for costs related to PPE and safety equipment installation expenses that they have incurred (This amount would allow at least 33+ not-for-profits to be assisted).