Council Preview: The City Will RISE Again
$15 million fund proposed to help deliver quick cash relief
By Austin Sanders,
3:45PM, Wed. Apr. 8, 2020
City Council is set to allocate $15 million from the city’s emergency reserves for direct financial relief to individuals affected by the economic fallout caused by the spread of COVID-19. The aid will be distributed to nonprofit service providers the city is already working with, to either expand their reach or add to the services they provide.
The ordinance authorizing the budget amendment, sponsored by CM Greg Casar, will inject the cash into the Relief in a State of Emergency (RISE) fund, created in a resolution sponsored by Mayor Pro Tem Delia Garza. Money in the fund will be aimed at helping low-income Austinites – especially those who won’t receive or can’t wait for relief payments coming via the federal CARES Act.
“The focus of this resolution was equity and expediency,” Garza said at Council’s Tuesday, April 7, work session. “But it shouldn't be looked at in isolation,” she added in an interview with the Chronicle. “This is just a first step. The priority was getting help into people’s hands as quickly as possible, but there’s a lot more discussion to be had on how to complement this aid.”
The city’s General Fund Emergency Reserve has about $64 million in it, roughly $22 million more than what’s required by the city’s fiscal policies. On Tuesday, the city’s deputy chief financial officer and budget lead Ed Van Eenoo said the reserve fund would need to be drawn down by 2.3% to close budget shortfalls created by decline in tax revenues resulting from COVID-19, and the relief spending needed to help people. Some, but not all, of that spending will be reimbursed by the federal government.
What kind of aid should be provided is left intentionally broad in the resolution, allowing service providers to decide how the money could best serve emerging needs. That could be helping tenants make rent in May – a time that tenant organizations are eyeing with increasing anxiety as unemployment rates rise – or to improve food access and pay for medical expenses. Funds could be used by providers on behalf of people in need – allowing a food pantry to restock its shelves, for example – or possibly through prepaid debit cards given directly to Austinites, such as those without bank accounts who won’t get CARES Act checks through direct deposit.
Those eligible include individuals and families with incomes at or below 200% of the federal poverty level (that’s $52,400 for a family of four), those on Medicaid or SNAP, or more broadly, those who “have experienced a significant hardship or loss of household income related to the COVID-19 pandemic.” The resolution notes that verifying eligibility “may not impose an unnecessary burden on those applying for relief services or direct financial assistance and may not unnecessarily delay the approval and distribution process.”
If the budget amendment is approved at the Thursday Council meeting, the city could begin distributing funds by April 20. Between now and then, staff will work with nonprofit partners to determine how they would use the money, and if they have the capacity and infrastructure in place to support increased need in the community – a concern for CMs Alison Alter and Natasha Harper-Madison at the Tuesday work session. They both asked if funds should be set aside to help grow and strengthen nonprofits, most of which are supported, to some degree, by volunteer labor.
Casar told us the resolution doesn’t preclude that possibility. “If nonprofits need to serve tens of thousands more people, then they may need to hire new staff to help those thousands of people. We want the vast majority of the dollars to provide immediate help to people, but some portion of this should go to increasing the capacity to serve.”
Like parts of the CARES Act, the RISE fund is meant to make it easier for people who have been forced out of work as well as those who need or wish to stay home to protect their health and the community. Nonprofits are seeing unprecedented demand for services at a time when fundraising and volunteer support is dwindling; the safety net is struggling to bear the weight of thousands of people who have never needed help paying rent or buying groceries.
“If people are told for their survival they can’t work, but they also need to work to survive,” Casar said, “there are going to be some number of people who will choose to go to work anyways.” The goal is to give people in that position – and the thousands more who will join them as economic troubles deepen – the financial support needed to stay home.
The ordinance and resolution represent just one early step on the road to providing relief to people. “That’s the reason we didn’t ask for more money from the reserve fund,” Garza told us. “We know people are going to need more help from more programs in the months ahead.”
That includes the customer assistance programs at both Austin Water and Austin Energy, which will each draw $5 million from their own reserves to help people pay their bills. That ordinance will also codify a moratorium on utility disconnections, waive late fees, and reduce rates for customers both within and outside the city.
Another resolution asks financial institutions to take a number of steps to help customers weather the crisis. None of those are enforceable right now, but City Manager Spencer Cronk is also directed to draft an ordinance closing a loophole that allowed lenders to charge predatory interest rates on payday and motor vehicle title loans.
A slate of items authorizes staff to make agreements with hotels to use their facilities as isolation or quarantine locations for COVID-19 patients. These rooms would be offered to people who are unable to quarantine in their home, or live with someone who is in a high-risk population, so that they can safely recover without spreading the virus throughout their household. A similar agreement is on the agenda to allow the Sobering Center’s building to be used as an isolation facility.
In non-COVID business, a resolution by Garza aims to continue the progress made by Travis County at reducing the jail population and moving away from cash bail and “wealth-based detention,” through offering guidance to staff working on the latest update to the city/county agreement that governs Central Booking. (The city’s municipal judges serve as magistrates for jail intake.) It’s a timely move, but it also comes as Garza runs for county attorney, and it again spotlights disputes between those who think Travis County is already a model of restorative justice, and those who think it could do so much more. We’ll dive deeper into this story next week.