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Consideration Items
Item No. 2.
MEETING DATE: 07/18/2022
 
TO: HONORABLE MAYOR AND COUNCILMEMBERS
 
FROM: JIM SADRO, CITY MANAGER
By:  Kelly Fujio, Director of Community Services
 
SUBJECT:
CONSIDER APPROVAL OF PROGRAM GUIDELINES FOR THE PROPOSED "LA HABRA COMMUNITY NON-PROFIT GRANT PROGRAM" FUNDED THROUGH THE AMERICAN RESCUE PLAN ACT

RECOMMENDATION:


That the City Council:
A.  Approve the proposed La Habra Community Non-Profit Grant Program Guidelines; and

B.  Authorize the City Manager to establish a three member Application Review Board comprised of City staff, and designate the Community Services Commission to consider any appeals; and,

C.  Authorize the City Manager to approve grant requests and allocate funding as recommended by the Application Review Board and/or the Community Services Commission appeal process, not to exceed a maximum of $25,000 per application and not to exceed the City Council approved program funding of $500,000.

DISCUSSION:

The American Rescue Plan Act of 2021 (ARPA) was adopted by the United States Congress and signed into law by President Biden on March 11, 2021.  ARPA is a $1.9 trillion federal economic stimulus package that provides a wide variety of public health and financial assistance programs intended to address the negative economic impacts created by the COVID-19 pandemic. Funding was allocated to metropolitan cities, including the City of La Habra, under ARPA as a direct entitlement from the U.S. Treasury on a formulaic basis consistent with already established federal disadvantaged community guidelines. Based on this formula, the City of La Habra received a total of $15,828,149.

Per ARPA and Department of Treasury guidelines, the funds may be used (subject to key prohibitions) to:
  • Support public health expenditures, such as funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety expenses;
  • Address the negative economic impacts caused by the public health emergency, including economic harm to workers, households, small businesses, impacted industries, and the public sector;
  • Replace lost public sector revenue, using funds to provide government services to the extent of the reduction in revenue experienced due to the pandemic;
  • Provide premium pay for essential workers, offering additional support to individuals who serve in critical infrastructure sectors;
  • Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.
 

The City Council adopted an ARPA Allocation Plan, consistent with the City Council's 2022 Goals and Objectives, on January 18, 2022, which included $500,000 to support local non-profit organizations. Subsequent to the City Council's funding allocation, staff researched ARPA regulations related to funds being used to assist non-profits and found that assistance may be used for the following: 
  • Loans or grants to mitigate financial hardship, such as declines in revenue or impacts of periods of business closure, including supporting payroll and benefits costs, costs to retain employees, mortgage, rent, or utilities costs, and other operating costs;
  • Loans, grants, or in-kind assistance to implement COVID-19 prevention or mitigation tactics, such as physical changes to enable social distancing, enhanced cleaning efforts, barriers, or partitions, or COVID-19 vaccination, testing, or contact tracing efforts; and,
  • Loans or grants for technical assistance, counseling, or other services to assist with business planning needs.
While the funding categories listed above are fairly broad, it is important to note that grant recipients may not use these funds for general economic or workforce development and recipients must be able to demonstrate that the funding is used to directly address the negative economic impacts of the COVID-19 public health emergency. In light of these guidelines and restrictions, staff has developed a Program Plan that allows for local La Habra non-profits to apply for funding for programs and activities that meet ARPA regulations. The Program Plan establishes funding eligibility and priorities, allowable and non-allowable uses of funds, evaluation criteria, and the process for granting the funds.
 
Proposed Funding Eligibility, Priorities and Program Guidelines
  • The non-profit must be either an eligible La Habra-based, or non-La Habra-based but serving La Habra residents, tax-exempt charitable organization in good standing, and was in operation prior to March 13, 2020.
  • Applications, with all required documentation, must be submitted during the application period that will open on August 1, 2022 and will close at 6 p.m. on September 30, 2022.
  • Appeals regarding an award amount or the denial of funding must be submitted by an applicant, in writing, within 15 days of the grant decision issued by the City.
  • Grant awards will be based on demonstrated harm caused by the COVID-19 pandemic to the non-profit and/or to address the non-profit's response to the COVID-19 pandemic.
  • Funding priority will be given to non-profits physically located in and/or headquartered within the City of La Habra.
  • Non-profits based outside the City, but that are serving La Habra residents, are eligible for funding, but will be considered as secondary requests once eligible local non-profit applications have been processed.
  • Each non-profit is eligible for one grant award only, unless a new application period is opened after July 1, 2023.
Examples of Allowable Uses of Funds:
  • To bring general operations back to pre-pandemic service levels and /or to meet current demands;
  • To reimburse or pay for the cost of personal protective equipment and other health-related responses to the pandemic;
  • To reimburse or pay for utility payments for business purposes (La Habra water payments are not eligible);
  • To reimburse or pay for technology and equipment related to the group's charitable purpose;
  • To reimburse or pay for eligible labor costs and supplier payments;
  • To reimburse or pay for rent, lease, or mortgage payments.
Examples of Non-Allowable Use of Funds
  • Damages covered by insurance;
  • Expenses, including payroll, that are not substantially dedicated to COVID-19 programming;
  • Reimbursements of donations;
  • Legal settlements or fines, including those incurred due to non-compliance with COVID-19 guidelines;
  • Severance pay or workforce bonuses other than hazard pay or overtime costs for essential employees;
  • Expenses that have been or may/will be reimbursed through any other Federal, State, or Local Program;
  • Endowments, private foundations, re-granting opportunities, fundraising events, political or lobbying activities, religious or doctrinal purposes (although faith-based organizations may apply for program support).
 

Grant Review Process
  • Applications will be reviewed and scored by a three-member panel.
  • The Community Services Commission will hear appeals, with its determination considered as final.
  • Scoring will be based on a scale of 1-100 total.
  • 35 points:  Established and documented COVID-19 related negative impact
  • 25 points:  Use of funds to directly benefit the La Habra community
  • 25 points:  Number of La Habra residents served
  • 15 points:  Groups that address multiple COVID-19 related community needs
  • The funding amount awarded to successful applicants will be based on each applicant's score, as follows:
    • Scores of 69 or below will not be considered as eligible and will not receive funding.
    • Scores of 70-79 points, not to exceed $5,000
    • Scores of 80-89 points, not to exceed $15,000
    • Scores of 90-100 points, not to exceed $25,000
    • Regardless of the score, award amounts will be limited to no more than 25 percent of an eligible non-profit's total annual budget.
  • Score sheets will be available for review, and grant awards or denials may be appealed by email to lahabragrantrequests@lahabraca.gov.
If this proposed program is approved by the City Council, the La Habra Non-Profit Community Grant Program Plan would provide grants to local eligible non-profits based on scoring and the availability of funding, in an amount not to exceed $25,000 per application, limited to no more than 25 percent of the requesting non-profit's verified annual budget, whichever is lower. The total approved program funding is $500,000. Staff will begin to accept grant applications, with all required documentation, on August 1, 2022 and will close the application period at 6 p.m. on September 30, 2022. Should unallocated program funding remain available on July 1, 2023, the staff will request direction from the City Council to either reallocate the remaining unused funding to other eligible ARPA programs or uses, or to reopen a new application period for eligible non-profits.

FISCAL IMPACT/SOURCE OF FUNDING:

The La Habra Community Non-Profit Grant Program cost of $500,000 will be fully funded through the City's ARPA allocation.  There is no financial impact on the General Fund.

GENERAL PLAN RELEVANCE/CITY COUNCIL GOALS & OBJECTIVES:


GENERAL PLAN RELEVANCE
LU 17.1  Adequate Community-Supporting Uses
LU 17.4  Coordination with Non-City Public Services Providers

2022-2023 GOALS AND OBJECTIVES
Goal 6 - Community Outreach and Civic Engagement
Obj E   Build and Maintain partnerships and collaborations
Obj F   Continue to cultivate a culture of volunteerism

 

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