Title
Adoption of Resolution Amending the Fiscal Year 2020-21 Budget to Accept $1,003,970 in State Coronavirus Relief Funds and Amend the Fiscal Year (FY) 2020-21 Budget to Increase Revenue and Expenditures Appropriations by $903,970 in the General Fund and by $100,000 in the Human Services Fund in Order to Offset Costs Associated with the City’s Response to the COVID-19 Pandemic; and
Recommendation to Approve a Report on City Activities and Expenditures Related to the COVID-19 Emergency. (City Manager)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda (City) started preparing for and responding to the COVID-19 emergency in February of 2020. On February 28, 2020 the Emergency Operations Center (EOC) was activated. On March 4, 2020, Governor Newsom issued a Proclamation of the State of Emergency related to the COVID-19 pandemic. The City has been operating under a state of emergency since this declaration and the EOC remains activated.
The City continues to incur significant expenses responding to this emergency providing crucial support to City operations and the community. These expenses fall into one of three categories:
• Ensuring the continued health and well-being of employees serving the public,
• The health and well-being of the community;
• Actions to mitigate the economic impact of COVID-19.
In July 2020, the State Department of Finance announced that the City would be eligible for an allocation of $1,003,970 from the Coronavirus Relief Fund. The funding provides for payments to State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak.
The City Manager’s office and Acting Finance Director recommends that this funding be allocated in two broad categories. We recommend that 50% be used toward reimbursing $500,000 of the eligible expenses incurred. We have incurred expenses from contingency/Fund Balance and this would partially offset those expenses. Additionally we recommend that 50% to expand funding not anticipated in the budget for future COVID-19 relief.
Expenses already incurred include:
• $250,000 to reimburse the General Fund for the Small Business Relief Grant Program approved in April 2020;
• $250,000 to partially offset costs that will not be reimbursed by FEMA such as expanded family leave, increased unemployment expenses and public safety salaries;
Proposed funding of the additional $503,000.
• $300,000 be used for Economic Development Relief. This could include Association assistance or individual assistance.
• $203,970 be used for a combination of additional homeless assistance related to COVID-19 and or future testing.
City Staff will return to City Council to provide an update on the use of these funds including details on expenditures in the fall of 2020.
BACKGROUND
In February 2020, the City initiated a response to the coronavirus pandemic. The City has continued to work to ensure the well-being of its employee and the community. The City has also taken a number of actions as part of its response. Following best practices, the City has and will continue to plan and prepare to address the impacts.
In July 2020, the State Department of Finance announced that the City would be eligible for an allocation of $1,003,970 from the Coronavirus Relief Fund. Federal law specifies that the funds may only be used for unbudgeted costs incurred between March 1, 2020 and December 30, 2020. All funds must be spent by the end of the year.
DISCUSSION
City Activities and Expenditures Related to the COVID-19 Emergency
The City’s response to the COVID-19 emergency has been focused on three crucial areas: the health and well-being of employees, the health and well-being of the community, and measures to mitigate the economic impact of COVID-19 to the community.
While this work is critical, the City has made significant expenditures as part of the response. Staff is carefully tracking all expenditures in order to apply for reimbursement from the Federal Emergency Management Agency (FEMA). The City Manager previously reported to City Council about COVID-related expenditures on May 19, 2020. Below is an update on expenditures as of August 21, 2020:
Health and Well-Being of Employees Serving the Public
The City has had to make a number of operational changes since the start of the COVID-19 pandemic in order to ensure the health and well-being of City employees and to ensure the City’s ability to continue to provide services to the community. The total cost to-date of the items purchased in this category is estimated currently at $380,000. These purchases have included (not all inclusive):
• Protective equipment for Police and Fire department employees
• Ready-made meals for firefighters so they did not need to shop for groceries
• Increased housekeeping services at City facilities including fire stations
• Hand sanitizer and cleaning supplies for use in both City facilities and vehicles
• Disposable masks and cloth masks
• Equipment and software to support virtual meetings and remote work
• Portable outdoor sinks for the Police
• Equipment and staff time to fog/disinfect City facilities
• Sneeze guards for public counters
In addition to direct costs, the City Council previously authorized the provision of three weeks of “COVID-19 leave/pay” to all City employees. Employees who were unable to work due to childcare or medical issues related to COVID-19 or did not have work were able to use this time to continue to be paid. Employees who do not use this time during the COVID-19 emergency will have up to two years to use this time.
Full-time employees who were unable to work remotely, and did not have work to perform onsite but remained available to work have been placed on paid administrative leave after exhausting their COVID leave. As of the August 21, 2020 pay date, employees Citywide have used an estimated 8,509 hours of paid administrative leave. Currently the City does not have any employees receiving administrative leave.
The City has also implemented the Families First Coronavirus Response Act (FFCRA). FFCRA provides for two weeks of emergency sick leave and 12 weeks of childcare leave. As of the August 21, 2020 pay date, approximately 64 employees have used the emergency sick leave and 22 were on childcare leave. Most of these employees on childcare leave were using it intermittently while working some hours.
Health and Well-Being of the Community
The total cost to-date of the items purchased in this category is estimated currently at $110,000. These expenses have included (not all inclusive):
• Setup and operation of FEMA-provided trailers to provide housing for up to eight unhoused residents who are non-symptomatic for COVID-19
• Five portable toilets and 17 handwashing sanitizer stations place throughout the community
• Public services available on-line and by phone
• Community outreach promoting the general health and well-being of the community
• Support for testing site
• Support for the slow streets initiative on Park Street and Webster Street
Although the trailers were provided at no cost to the City via FEMA, the setup cost was approximately $8,000, and the monthly operating cost is $10,451. If the trailers are in use for nine months the cost would be an estimated $95,000 through December 2020. The City followed the EOC planning guideline to set up the FEMA trailers to ensure compliance with FEMA policy. This cost is associated with limited management of the site and does not include wrap around services.
Measures to Mitigate the Economic Impact of COVID-19
• Rent deferral for tenants in City-owned facilities
• Deferment of payments for business licenses and transient occupancy tax (TOT)
• $600,000 in small business grants for local businesses
• Implementation of an Emergency Ordinance putting a temporary moratorium on commercial and residential evictions and other renter protections.
The deferral of payments is not an expenditure and will only be a cost to the City if the current tenants do not make back rent payments or do not pay back TOT.
Coronavirus Relief Funds
The City is now eligible to receive $1,003,970 in Coronavirus Relief Funds. The City is recommending this funding be used as follows:
• $250,000 to reimburse the General Fund for the small business grant program.
• $250,000 to reimburse the City for expenses that will not be reimbursed by FEMA such as the cost of providing the Families First Leave (estimated $200,000 to date), increased unemployment expenses and public safety salaries. The $250,000 will not cover these costs but will provide some financial relief.
• $300,000 to fund economic support for small businesses including a second round of grant awards to support retention of Alameda businesses as well as funding for business districts to develop outdoor dining in compliance with the Public Health Orders.
• $100,000 to increase temporary shelters for homeless individuals.
• $103,970 to be used as a contingency fund to support unforeseen needs such as a testing facility, additional assistance for temporary shelters related to COVID-19 impacts or other impacts of COVID-19.
Staff will return to City Council in the fall to provide an update on the use of Coronavirus Relief Funds.
ALTERNATIVES
1. Approve a Report on City Activities and accept the recommendation for the use of Coronavirus Relief Funds.
2. Approve a Report on City Activities.
3. Provide different direction on the use of Coronavirus Relief Funds.
FINANCIAL IMPACT
The proposed action would accept $1,003,970, representing the City’s allocation of State Coronavirus Relief Funds, and appropriate the funds to the General Fund. The State requires that Coronavirus Relief Funds be used for unbudgeted costs, and that the costs must be incurred (not encumbered) by December 30, 2020.
No matching funds are required to accept the State allocation of Coronavirus Relief Funds.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
Approval of the Report on City Activities is exempt from review under the California Environmental Quality Act Section 153 (not a project); and Section 15061(b)(3) (no significant environmental impact).
CLIMATE IMPACT
There are no climate impacts associated with this action.
RECOMMENDATION
Adopt a resolution amending the Fiscal Year 2020-21 Budget to accept $1,003,970 in State Coronavirus Relief Funds and amend the Fiscal Year (FY) 2020-21 Budget to increase revenue and expenditures appropriations by $903,970 in the General Fund and by $100,000 in the Human Services Fund in order to offset costs associated with the City’s response to the Covid-19; and
Pandemic; and approve a report on City activities and expenditures related to the COVID-19 emergency.
CITY MANAGER RECOMMENDATION
The City Manager recommends allocating the $1,003,970 with $500,000 allocated to incurred expenses and $503,000 allocated to future COVID-19 impact relief efforts as outlined in the analysis.
Respectfully submitted,
Nancy Bronstein, Human Resources Director and Interim Finance Director
By:
Jennifer Tell, Budget Manager
Nancy Bronstein, Acting Finance Director
cc: Eric Levitt, City Manger