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HomeMy WebLinkAboutItem 4.6 - 3416 CARES Act Funding Spending Plan Adjustment (2) Page 1 of 4 STAFF REPORT CITY COUNCIL DATE: October 20, 2020 TO: Honorable Mayor and City Councilmembers FROM: Linda Smith, City Manager SUBJECT: CARES Act Funding Spending Plan Adjustment Prepared by: Kristie Wheeler, Assistant Community Development Director EXECUTIVE SUMMARY: The City Council will consider an adjustment to the Coronavirus Aid, Relief, and Economic Security (CARES) Act Funding Spending Plan to reallocate $150,000 designated for emergency rental assistance to reimburse the City’s General Fund for expenditures incurred due to the COVID-19 pandemic. Additional funds of $154,761 have been allocated to the City of Dublin for rental assistance through CDBG CARES Act funds from the U.S. Department of Housing and Urban Development. STAFF RECOMMENDATION: Approve an adjustment to the CARES Act Funding Spending Plan. FINANCIAL IMPACT: Under the State’s Fiscal Year 2020-21 Adopted Budget, the City received $811,404 in funding from the CARES Act on which the City Council based its adopted CARES Act Funding Spending Plan on September 1, 2020. This amount included an allocation of $150,000 for rental assistance. Staff was recently notified by the Alameda County Housing and Community Development Department (HCD) that the Urban County will be receiving another round of CDBG CARES Act funds (Round 3 Part A) from the U.S. Department of Housing and Urban Development HUD. In this round of funding, the City will receive $154,761 for emergency rental assistance plus $13,000 for administration costs. DESCRIPTION: Background In March 2020, President Trump signed into law the CARES Act, an economic stimulus package in response to the negative financial impacts associated with the COVID-19 pandemic. The package provides over $2 trillion in economic relief programs to assist workers, families, and businesses, as well as state, local, and tribal governments. Page 2 of 4 The State of California received over $15 billion in CARES Act funding. The State’s Fiscal Year 2020-21 Adopted Budget included $500 million from this funding for cities, with $275 million to be allocated, on a per-population basis, to cities with populations below 300,000. Under this framework, the City of Dublin received $811,404. Funding Guidelines The State has made this funding contingent on the adherence to guidelines established by the CARES Act, the State’s stay-at-home requirements, and other health requirements, orders, directives, and guidance as directed by the Governor and the California Department of Public Health. CARES Act funding can only be used for necessary expenses incurred due to the public health emergency, including the expense of responding directly to the emergency as well as second-order effects of the pandemic, along with other related expenses which were not accounted for in the current budget. Under the CARES Act Guidelines there are six general categories of eligible expenses including, but not limited to: 1. Medical expenses, such as costs of providing COVID-19 testing. 2. Public health expenses, including costs of communicating and enforcing public health orders and acquiring/distributing personal protective equipment (PPE). 3. Payroll expenses for public safety or similar employees whose services are substantially dedicated to mitigating or responding to the public health emergency. 4. Expenses related to facilitating compliance with COVID-19-related public health measures including bolstering telework capabilities for public agencies, delivering food to vulnerable populations, and providing paid sick/family/medical leave to public employees. 5. Expenses associated with the provision of economic support in connection with the COVID-19 public health emergency like grants to small businesses, rental/mortgage assistance, eviction prevention, homelessness prevention grant programs, and unemployment insurance costs related to the COVID-19 public health emergency if such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise. 6. Any other COVID-19 related expenses reasonably necessary to the function of government that satisfy the program’s eligibility criteria, including matching requirements for FEMA Public Assistance Grants. Eligible expenses must have been incurred between March 1, 2020 through December 30, 2020. The $811,404 in CARES Act funding must be spent, not just encumbered, by December 30, 2020. Funds not spent by the December 30, 2020 timeline shall be returned to the U.S. Treasury in accordance with Federal guidelines. Furthermore, any loans created from these funds must be utilized before December 30, 2020. Unused funds from these loans as well as any future repayments must be returned to the U.S. Treasury as well. Page 3 of 4 State Process and Timeline The State initially disburse funds in one-sixth increments for the months of July, August, and September. The remaining balance will be paid after the City satisfies certain Department of Finance reporting requirements, which was completed in early September. Approved Spending Plan On September 1, 2020, the City Council adopted Resolution No. 93-20, approving the CARES Act Funding Spending Plan. The approved Spending Plan categorized expenses in accordance with the CARES Act categories of eligible expenses, which included the following: · Medical Expenses - $25,000 · Public Health Expenses - $157,489 · Payroll Expenses - $11,572 · COVID-19 Economic Support - Small Business Microloan Program - $467,343 - Residential Rental Assistance - $150,000 Following the September 1, 2020 City Council meeting, the City was informed by the Alameda County Housing and Community Development Department (HCD) that the Urban County will be receiving another round of CDBG CARES Act funds (Round 3 Part A) from the U.S. Department of Housing and Urban Development HUD. According the HCD, HUD has given the award to places that are experiencing potentially high eviction rates and HCD intends to direct these funds toward another round of rental assistance payments. In this round of funding, the City will receive $154,761 for emergency rental assistance plus $13,000 for administration costs. Under HCD’s program, households earning up to 50 percent area median income (AMI) are eligible to receive rental assistance. Given that there are households earning up to 80 percent AMI in need of rental assistance and to ensure that the City can serve those households, Staff will request that HCD transfer the funds to the City and we will contract directly with ECHO Housing to administer the funds. It is anticipated that we will receive these funds in early December. To expedite the needed rental assistance, Staff is investigating whether the City can advance funds to ECHO Housing from the General Fund pending the County’s approval process and then reimburse the General Fund once the CDBG CARES Act funds are released. If it is determined that this is possible, Staff requests the City Council’s concurrence and approval. Given that the City will receive this additional funding for emergency rental assistance, Staff is proposing an adjustment to the Spending Plan to redirect the $150,000 that was set aside for residential rental assistance to reimburse the City’s General Fund for expenditures incurred due to the COVID-19 pandemic. This includes expenses related to unemployment insurance claims and expenses to facilitate teleworking arrangements such as monthly technology reimbursement stipends to employees, as well as the purchase of Zoom licenses and webcams. In addition, this funding would be used to reimburse the City’s General Fund for facility modifications, including a new check-in station in the Civic Center lobby and the purchase of plexiglass dividers for public facing countertops. City Council Resolution No. 93-20 includes a provision that authorizes the City Manager Page 4 of 4 to adjust the Spending Plan to ensure the proper and timely expenditure of the CARES Act funding. Staff is requesting the City Council’s concurrence and approval of the proposed adjustment. STRATEGIC PLAN INITIATIVE: None. NOTICING REQUIREMENTS/PUBLIC OUTREACH: None. ATTACHMENTS: None.