Austin Council OKs $18 million in relief for childcare facilities, small businesses, nonprofits

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AUSTIN (KXAN) — On Thursday, Austin City Council took directed federal pandemic relief dollars awarded to the city to Austin nonprofits, small businesses and childcare facilities.

The council’s action’s Thursday allocated an initial portion of $18 million from the federal CARES Act funding for revolving loans and grants while also directing city manager Spencer Cronk to start up a program where people can apply for these funds. City leaders and staff will now be working on creating applications for this program and choosing local partner organizations to help distribute the money.

Council Member Jimmy Flannigan, who sponsored the council items, explained that while the city has created COVID-19 relief programs through emergency reserve funds in the past few months, these actions are the first the city is taking to direct federal dollars awarded to Austin through the CARES Act.

“What we’re creating is a pilot program, kind of a rapid prototype,” he explained.

These city actions set up a program for three new funds:

  • The CLEAR Fund (Commercial Loans for Economic Assistance & Recovery) program which is offering a total of $11 million in loans and grants to small businesses.
  • The ANCHOR Fund (Austin Nonprofit & Civic Health Organizations Relief) which is offering $6 million in grants for Austin nonprofits.
  • The Childcare Support Fund which is offering $1 million in grants for Austin childcare centers.

Childcare Support Fund

To qualify for the Childcare Support Fund, childcare facilities have to serve families that receive childcare subsidies, have at least a 2-star rating under the Texas Rising Star System, have not already received Payroll Protection Plan money through the CARES Act and have been impacted by COVID-19 disruptions.

As of Sunday night, childcare and daycare facilities in Texas are only able to provide care to the children of essential workers. As businesses in Texas begin to reopen yet schools remain closed, many workers in Texas have faced challenges and confusion over childcare.

Sunday evening, Texas Gov. Greg Abbott’s office told KXAN of the state’s childcare facilities, “we are working as fast as we can to open them to others while ensuring that [they] are opened safely.

Flannigan explained that council made sure to include child care in this recent relief effort because, “what we do know is until we get a clearer and better guidelines for providing child care we need to make sure that every childcare provider we have stays open, stays available when reopening comes.”

Council Member Alison Alter, who co-sponsored the council actions, explained that the goal with the Childcare Support Fund is to make sure the places which care for children have the support they need to weather whatever re-opening brings.

“Any successful reopening strategy for our city requires access to high-quality childcare,” Alter told KXAN. “The Childcare Support Fund is designed to provide childcare centers the financial support they need to address the significant challenges they face on both the cost and revenue sides, so they can re-open.”

Flannigan explained that during the pandemic, the council has been getting calls from community members about the need to offer extra support for child care providers, but he noted, “we’ve been hearing that need for a long time pre-pandemic. Childcare is a very important in our community.”

CLEAR Fund for small businesses

The Commercial Loans for Economic Assistance & Recovery Fund is designed to offer economic injury loans, grants and technical assistance for local and small businesses in the city that have been impacted by COVID-19.

$10 million of that fund will be allocated for a revolving loan or grant program using the criteria for the city’s Economic Injury Bridge Loan Program. An additional $1 million in grant funding will be available for businesses to cover expenses related to safe compliance with orders to reopen.

To receive this award, businesses will have to show their commitment to retain the employees on their payroll.

ANCHOR Fund for nonprofits

The Austin Nonprofit & Civic Health Organizations Relief fund will offer grants to help nonprofits in Austin impacted by COVID-19 disruptions.

Out of the total $6 million available in this fund, $2 million will be reserved for organizations in Health and Human Services sectors, $1.25 million will be reserved for Workforce Development & Social/ Legal Services, $1.25 million will be reserved for groups working in education, $1 million will be reserved for arts and culture, and $500,000 will be reserved for groups focused on environment and animals.

In order to qualify, groups must be classified as a public charity with tax exempt 501(c)(3) status, they must have at least one 990 on file with the IRS, and they must be locally based while also doing work primarily within the City of Austin.

The city’s resolution says that these funds cannot be used for endowments or memorials, nonprofit hospitals and higher education institutions, private foundations, legal expenses by or against the organization, capital campaigns, support benefiting primarily for-profit members, and “fraternal, sectarian and religious organizations where the funding is intended to principally benefit members/adherents and to fund inherently religious activities.”

What happens next

Applications for these programs are not available yet, city leaders will need to put the programs together in the coming weeks. On Thursday, council directed the Austin city manager to begin rolling out the program “as soon as possible” and to return to council with an update on the program by May 21.

“Where we’re at now, I believe on May 21, I believe staff will have the items ready to allocate the federal dollars to the right bucket, at which point we’ll be able to re-fund emergency reserves that have been spent thus far that comply with the treasuries rules,” Flannigan explained.

Though Flannigan said the rules from the U.S. Department of Treasury are in flux, with the CLEAR, ANCHOR, and Childcare Support funds the city is “being very clear that this is to be spent within the guidance of the CARES Act.”

“This is intended to be low-barrier, we want folks to be able to access these resources quickly,” Flannigan said of the program. Flannigan is hopeful that the city will have applications created for these programs ironed out within the next few weeks.

“We want to get money out quickly because people’s needs are immediate,” he said.

A city spokesperson explained to KXAN Sunday that the program specifics are not available yet, but city staff has been working to create program proposals and applications. The city says all of those details will be announced publicly once they are available

For organizations that need immediate help, the city says you can find updated information on the city’s economic recovery as well as resources for businesses and nonprofits here. Additionally, the city says in the Small Business Resource Directory, you can filter by “Disaster Relief” and find a list of government and community resources for small businesses and nonprofits impacted by the pandemic.

These recent council actions also allow the city to partner in creating a “Regional Economic Dashboard.” The dashboard will track not just the dollars behind the new program city council green-lighted, it will also track COVID-19 response dollars set aside by federal, state and local government, in addition to private fundraising dollars.

Flannigan believes this dashboard will be important “for busineses to know, for nonprofits to know upfront that every piece of this will be published and transparent and in as real time as we can.”

“That should help eliminate the vast majority of bad actors,” he said.

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