Item 09 - First Amendment to Emergency Rental Assistance Program Spending Plan

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First Amendment to Emergency Rental Assistance Program Spending Plan and Appropriation Adjustment of $14,026,593.90 July 6, 2021 Page 2 1 8 6 1 In accordance with the statutory provisions in the American Rescue Plan Act of 2021, the Emergency Rental Assistance Program (ERAP) made available $21.55 billion to assist households that are unable to pay rent and utilities due to the COVID-19 pandemic. The funds were provided directly to states, U.S. territories, local governments, and Indian tribes. Grantees must use the funds to provide assistance to eligible households through existing or newly created rental assistance programs. Not more than 15 percent of awarded funds may be used for administrative costs attributable to providing financial assistance, housing stability services, and other affordable rental housing and eviction prevention activities. The remainder of awarded funds must be used for direct financial assistance, including: rent, rental arrears, utilities and home energy costs, utilities and home energy costs arrears, and other expenses related to housing. Funds generally expire on September 30, 2025. As an eligible grantee with a population greater than 200,000, the City applied for a direct allocation of these funds from the Department of Treasury on May 10, 2021, which included an agreement to comply with the statutory requirements summarized above (Exhibit 2). On May 13, 2021, our application was approved by the Department of Treasury. Under ERA2, an “eligible household” is slightly different than ERA1 and defined as a renter household in which: 1.One or more individuals within the household has qualified for unemployment benefits or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship during or due, directly or indirectly, to the coronavirus pandemic; 2.One or more individuals within the household can demonstrate a risk of experiencing homelessness or housing instability; and 3.The household is a low-income family (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)). ERA2 funding is restricted money and the City must account for it in a special revenue fund. Accounting staff has established Fund 177 for this purpose. Staff recommends appropriating the full amount of the ERA2 allocation, due to the short timeline for spending. First Amendment to ERAP Spending Plan This First Amendment to the ERAP Spending Plan achieves three things: 1) it recognizes and appropriates the $14 million in additional ERA2 funds received from the Department of Treasury; 2) it conforms to the statutory requirements of this new funding; and 3) it allows staff to double our capacity to administer these ERAP funds as efficiently and effectively as possible. Specifically, staff recommends allocating $11,922,604.05 to our