Date: May 8, 2020 Report No. 2020-049
INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL
SUBJECT: Provide updates to the City Council regarding the federal CARES Act and COVID-19 funding opportunities and requests
BACKGROUND: The CARES Act of 2020 appropriated coronavirus relief funding for all 50 states and local governments with populations above 500,000. Within the Act, the State of Texas was eligible to receive an estimated $11.243 billion for coronavirus response activities while Denton County was eligible to receive an estimated $145.9 million. The CARES Act does not require state governments to make their funding directly available to subsidiary local governments. The City of Denton, and its federal and state legislative consultants, will continue to advocate for all local governments to be eligible for direct federal funding in future federal legislation in addition to advocating for the State of Texas to provide direct pass-through CARES Act funding to local governments with a population under 500,000.
City staff will continue to identify City programs that are eligible to receive these funds, while also pursuing other funding opportunities as they become available. This recurring report will update the City Council on the status of CARES Act related funding and additional opportunities that may have been identified.
DISCUSSION: The following updates are provided for the week of May 4 through May 8, 2020.
CARES Act Funding From the State of Texas – On May 5, 2020, Mayor Watts joined a Texas Municipal League initiative for mayors across the state to make a formal request to Governor Abbott (Attachment 1) to prioritize the creation of guidelines for how local governments with populations under 500,000 may apply for CARES Act funding through the State of Texas (of which Texas was granted over $8 billion). The letter notes the impact that COVID-19 has had on cities regardless of their population size and emphasizes the leading role all cities will play in sparking economic recovery and leading the state out of the pandemic. This letter was transmitted to the Governor on Thursday, May 7.
Request for Support for FLEX Act – On Wednesday, May 6, Mayor Watts submitted a letter (Attachment 2) to the Office of Representative Michael Burgess requesting his support for the Flexibility for Localities and Eligibility Expansion Act of 2020 (FLEX Act). The FLEX Act is a bipartisan bill proposing amendments to the recently-enacted CARES Act and its provisions regarding the $150 billion Coronavirus Relief Fund (CRF), which is providing assistance to states and to cities and counties over 500,000 population. The bill would explicitly allow the State of Texas and Denton County to share their CRF funds with Denton and other cities under 500,000 population. It would also modify the CARES Act to allow states and local governments to use CRF funds to offset lost revenue due to COVID-19. Staff will continue to monitor this legislation.
Date: May 8, 2020 Report No. 2020-049
CARES Act NEA Grant Eligibility – Council Member Meltzer asked if the City of Denton would be eligible for grants made available through the National Endowment for the Arts (NEA) from the CARES Act. The NEA released guidelines for the CARES Act grants in early April. To be eligible for an NEA grant, organizations must: Be a nonprofit, tax-exempt 501(c)(3), U.S. organizations; units of state or local government; or federally recognized tribal communities or tribes; Have received an Arts Endowment award within the past four years; Meet the NEA legal requirements; Have submitted final reports for all previous awards received. Based on the criteria of having to have received an Arts Endowment award within the past four years, the City of Denton is not eligible to apply directly.
CARES Act Funding from the State of Texas for ESG The CARES Act (March 27, 2020) included $4 billion to be distributed through the federal Emergency Solutions Grant (ESG) Program to provide services to help persons that are at-risk of homelessness or homeless quickly regain stability in permanent housing. • $38,525,059 in ESG CARES was distributed by HUD directly to several cities and counties in Texas. Based on formula allocations, the City is not eligible for direct allocations from HUD. • $33,254,679 was allocated to the State through the Texas Department of Housing and Community Affairs (TDHCA). The City is eligible to apply for State ESG funding.
TDHCA allocated $13,329,434 to existing ESG Subrecipients. Denton County Friends of the Family, Inc. has conditionally been awarded ESG CARES First Allocation funds in the amount of $225,055.
TDHCA allocated $16,377,511 for Continuum of Care (CoC) lead agencies to award through a CoC award process. Out of the $16,377,511 allocated to all CoC’s in Texas by TDHCA, there is $6,928,889 in ESG-CV grant funding available for eligible agencies in the Texas Balance of State Continuum of Care (TX BoS CoC). After consultation with local agencies and the United Way of Denton County which is the backbone agency for the Denton County Homelessness Leadership Team (DCHLT), Community Development has submitted a Letter of Intent to apply for the ESG- CV funds allocated to the TX BoS CoC lead agency, Texas Homeless Network. Staff will work with local agencies to apply once the TX BoS CoC releases the ESG-CV grant funding application.
Additional Funding Opportunities – Finance staff has also learned this week that the Fire Department may be eligible for additional CARES act funding through a second round of disbursement from the Department of Health and Human Services. Staff submitted the application and supporting documentation this week. Round 2 eligibility and allocation amount will be determined by looking at the money received from Round 1 and the Fire Department’s total 2019 revenue. Staff will update Council as eligibility and funding details are received. The chart below provides a summary of grant activity.
Date: May 8, 2020 Report No. 2020-049
ATTACHMENTS: 1. Texas Municipal League Funding Letter 2. Letter of support for HR 6652
STAFF CONTACT: Stuart Birdseye Assistant to the City Manager [email protected] (940) 349-8009
REQUESTOR: Staff initiated
PARTICIPATING DEPARTMENTS: City Manager’s Office, Public Affairs, Economic Development, Finance
STAFF TIME TO COMPLETE REPORT: One hour
May 7, 2020
Dear Governor Abbott,
First, thank you for your guidance and leadership during this uniquely challenging time. As mayors from cities across Texas, we fully understand the need to revitalize economic opportunity for all Texans while also ensuring we are doing all we can to protect public health by stopping the spread of COVID-19. We stand ready to assist you in this endeavor in every way possible.
On March 27th, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, which provided over $2 trillion in emergency relief funds to help mitigate the financial harm caused by COVID-19. Included in the funding was $11.24 billion from the Coronavirus Relief Fund (CRF), which was split between the state of Texas and local governments in Texas with populations exceeding 500,000. While the six largest cities in Texas received a direct allocation of this funding from the federal government, no other Texas city has received CRF revenue to assist with disaster response. Needless to say, the virus representing our common enemy at the moment does not acknowledge city boundaries or population distinctions. Every single Texas city has a role to play in the battle for our state’s health and prosperity.
To that end, we’ve been encouraged to learn that your office is currently establishing a program for the distribution of a portion of the state’s revenue received from the CRF to cities with populations under 500,000. This funding is critical to support Texas cities and the services they are providing on the front lines of the COVID-19 emergency. We ask that you consider allowing any funds received by Texas cities to be used in the most flexible manner permitted by law. Though the U.S. Department of Treasury’s guidance prohibits the use of CRF funds for revenue replacement of budget shortfalls in governments’ budgets, there are ongoing discussions at the congressional level about potentially expanding permissible CRF expenditures to include revenue replacement. Should federal legislation allow for increased expenditure flexibility, we request that any state program follow suit.
However, we are concerned that guidelines on how to apply for that funding have not yet been released to the public. Cities are now in the midst of preparing budgets, and barring CRF information, cities are left with making tough budgetary decisions that affect their entire communities and organization. Furthermore, there is no clear indication on where cities, that are under the 500,000-population requirement, but fall within a county receiving assistance from the CRF, should apply for funding. These cities are unsure on whether to work with the state or with their county on financial assistance. We ask that application guidelines, including a clarification for cities within a 500,000-population county, be published swiftly so that cities can continue to plan and provide public services without serious interruption.
Texas cities are in a unique position to both stem the tide of COVID-19 in Texas, and to help spark our economic recovery. With the necessary resources, we are confident that Texas cities will lead the state back towards a prosperous and vibrant future.
Sincerely,
Eddie Daffern, TML President Karen Hunt, TML President-Elect Mayor, City of Staples Mayor, City of Coppell
Martha Castex-Tatum, Vice Mayor Pro Tem City of Houston Ron Nirenberg, Mayor City of San Antonio
Steve Adler, Mayor City of Austin Betsy Price, Mayor City of Fort Worth
Dee Margo, Mayor City of El Paso Joe McComb, Mayor City of Corpus Christi
Jeff Williams, Mayor City of Arlington Ginger Nelson, Mayor City of Amarillo
Dan Pope, Mayor City of Lubbock
Harry LaRosiliere, Mayor City of Plano
Jeff Cheney, Mayor City of Frisco Toby Powell, Mayor
City of Conroe
Scott LeMay, Mayor City of Garland
Jane Hughson, Mayor City of San Marcos
Joe Zimmerman, Mayor City of Sugar Land Kenny Phillips, Mayor City of Mobile City
Rick Stopher, Mayor City of Irving
Henry Wilson, Mayor City of Hurst
George Fuller, Mayor City of McKinney
Linda Martin, Mayor City of Euless
Chris Watts, Mayor City of Denton Cecelia Cissy Gonzalez-Dippel, Mayor City of Floresville
Ron Jensen, Mayor City of Grand Prairie Larry Vernon, Mayor City of Eastland
James D. Yarbrough, Mayor City of Galveston
Laurie Blanco, Mayor City of Dalworthington Gardens Bill Blackburn, Mayor City of Kerrville
Tom Daly, Mayor Andrew S. Friedberg, Mayor City of Selma City of Bellaire
Roy Tovar, Mayor Michel J. Bechtel, Mayor City of Waelder City of Morgan’s Point
Don Denbow, Mayor Dr. Ambrosio Hernandez, Mayor City of Corsicana City of Pharr
GeoJan Wright GeoJan Wright, Mayor City of Coffee City Michael Barnhart, Mayor City of Lake Dallas
Flora Brady, Mayor City of Andrews Manny Baeza, Mayor City of Marfa
Gerald Joubert, Mayor City of Forest Hill Susie Houston Susie Houston, Mayor Town of Laguna Vista Lynn Ramsey Lynn Ramsey, Mayor City of Shamrock Lane Horwood Lane Horwood, Mayor City of Sterling City Dorothy Welch Jim McInnis Dorothy Welch, Mayor Jim McInnis, Mayor City of Splendora City of Hamilton
Thomas G. Kolupski, Mayor Steve Spicer, Mayor City of Seabrook City of Jamaica Beach
Lynda Lynn Lynda Lynn, Mayor City of Electra Jim McKenzie, Mayor
City of Sweetwater Garry Manitzas Garry Manitzas, Mayor City of Fair Oaks Ranch
Glen Smith Scott Neu, Mayor City of Lindsay Glen Smith, Mayor
City of Palacios Trey Mendez Keith Short Trey Mendez, Mayor City of Brownsville Keith Short, Mayor City of McLendon-Chisholm
Stephen Mason, Mayor City of Cedar Hill Cathy Young, Mayor City of Chillicothe Doyle Robinson Doyle Robinson, Mayor David Rutledge City of Panhandle David Rutledge, Mayor City of Bridge City Pam Frederick Pam Frederick, Mayor City of Bullard Lisa B. Pierce Lisa B. Pierce, Mayor Gilbert Gomez, Mayor City of Kirby City of Robstown
Paul Johnson David R. Turner David R. Turner, Mayor Paul Johnson, Mayor City of Odessa City of Jonestown
BJ McGinnis BJ McGinnis, Mayor City of Blanket Martin Heines, Mayor City of Tyler
George R. Haehn David Suarez, Mayor City of Weslaco George R. Haehn, Mayor City of Buda
Roger Shugart Ritch Wheeler Roger Shugart, Mayor City of Brazoria Ritch Wheeler, Mayor City of Shenandoah
Billy P.Davis Billy P. Davis, Mayor City of Crowley Dale Ross, Mayor
City of Georgetown
Cathy Skurow, Mayor Carl Marino City of Portland Carl Marino, Mayor City of Fayetteville
Gary Chumley Gary Chumley, Mayor Galen Mansee City of Gatesville Galen Mansee, Mayor City of Stagecoach
Stephen L. Santellana, Mayor City of Wichita Falls Mary Moore Mary Moore, Mayor City of Pearsall Joe Chow, Mayor Town of Addison
Trudia Preston William D. Sciscoe, Mayor Trudia Preston, Mayor City of Dish City of Goliad
Andrew L. Smith Frank George Andrew L. Smith, Mayor Frank George, Mayor City of Hillsboro City of Kirbyville
Mark Groneman Mark Groneman, Mayor City of Vega
Emmanuel Wealthy, Mayor City of Wilmer Bob Bruggeman, Mayor City of Texarkana
Thurman Bill Bartie, Mayor City of Port Arthur
Anita Rodriguez, Mayor City of Yoakum
Luis D. Carrera Jeff Jordan, Mayor City of Kaufman Luis D. Carrera, Mayor City of Cockrell Hill
Nancy Moore Nancy Moore, Mayor Pro Tem City of Tye Brenda Gunter, Mayor City of San Angelo Charles Bujan Charles Bujan, Mayor City of Port Aransas
Jason Tabor, Mayor Royking Potter, Mayor City of Santa Fe City of Shallowater
Nancy Ruckstaetter Nancy Ruckstaetter, Mayor City of Log Cabin Victor A. Contreras, Mayor City of Marion
Bruce Archer Janice Whitehead Bruce Archer, Mayor City of Mesquite Janice Whitehead, Mayor City of Sealy
Frank Moreno Curtistene S. McCowan Frank Moreno, Mayor City of Crystal City Curtistene S. McCowan, Mayor City of DeSoto
Andy Williams Andy Williams, Mayor
Cyndie Rathbun, Mayor City of Nolanville Town of Rancho Viejo Clarence Burns Nick Sanders Clarence Burns, Mayor Nick Sanders, Mayor City of Linden Town of Trophy Club
Phyllis Santleben Phyllis Santleben, Mayor Todd Purcell, Mayor City of Castroville City of Dripping Springs
Harold D. Chandler, Mayor City of East Tawakoni Lindsey L. Webb, Mayor City of Abernathy
Oscar Trevino Oscar Trevino, Mayor City of North Richland Hills Johnnie Hauerland, Mayor City of Meridian
John Packer, Mayor City of Marble Falls Terri Brown, Mayor City of Marshall
Bruno Lozano, Mayor
City of Del Rio Sara Post Meyer, Mayor City of Cuero James C. Samples James C. Samples, Mayor City of Hughes Springs
Ray Smith, Mayor Sam Miller Town of Prosper Sam Miller, Mayor City of Sudan George Rivera George Rivera, Mayor Becky Ames City of Palm Valley Becky Ames, Mayor City of Beaumont Allyson Crenshaw
Allyson Crenshaw, Mayor City of Robert Lee
Lewis Ivey Jerry B. Dittrich, Mayor Lewis Ivey, Mayor City of Benbrook City of Diboll
Leroy Hughes Leroy Hughes, Mayor City of San Augustine Geronimo M. Gonzales, Mayor City of Brownfield Tom Simons Tom Simons, Mayor City of Hereford Merle Aaron, Mayor City of Humble
Mark Turner Mark Turner, Mayor City of Wills Point Jose Segarra, Mayor City of Killeen
Benjamin Gomez, Mayor City of San Benito
Scott Cain, Mayor Scott Anderson City of Cleburne Scott Anderson, Mayor City of Patton Village Jim Olk Jim Olk, Mayor City of Lucas
cc: Texas Congressional Delegation Texas State Senate Texas House of Representatives Governor Strike Force to Open Texas
Office of the Mayor 215 E. McKinney St., Denton, TX 76201 (940) 349-7717
May 6, 2020
The Honorable Michael C. Burgess United States House of Representatives Washington, DC 20515 Via Email: [email protected]
Dear Representative Burgess:
I am writing to urge you to cosponsor and support the “Flexibility for Localities and Eligibility Expansion Act of 2020” (FLEX Act), a bipartisan bill proposing amendments to the recently-enacted CARES Act and its provisions regarding the $150 billion Coronavirus Relief Fund (CRF), which is providing assistance to states and to cities and counties over 500,000 population. As you know, Denton's population is below this threshold, and as a result we didn't receive any direct allocation these funds.
Representative Don Bacon introduced the FLEX Act (HR 6652) with ten original cosponsors, including your colleague, Representative Michael McCaul. This bipartisan legislation would amend the CARES Act by giving state and local governments additional flexibility in how funds can be used, including addressing revenue shortfalls due to COVID-19. The current law and associated Treasury Department guidance prohibits state and local governments from using CRF funds to offset lost revenues, a funding eligibility granted by Congress in the CARES Act to airlines and airports, among others. Representative Bacon’s bill would also explicitly allow the state and Denton County to share their CRF funds with Denton and other cities under 500,000 population.
In Denton, in addition to closed business and dramatic declines in consumer and business spending, we have closed facilities, canceled events, programs, and other activities, all of which have adversely impacted city revenues as well as our budget. Enactment of this legislation would allow for cities, including Denton, to offset revenue shortfalls in taxes and fees collected, intergovernmental transfers, and dedicated revenue streams pledged for bond payments for the March 1-December 30, 2020 period. These changes, if adopted, would significantly strengthen our efforts to deal with the financial effects of COVID-19.
Thank you for your consideration of our request to cosponsor HR 6652, and we thank you for your continued efforts on behalf of the City of Denton.
Sincerely,
Chris Watts Mayor
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