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    16.    
City Council Regular
Meeting Date: 10/28/2020  

SUBJECT:
CARES ACT - COVID-19 FUNDING UPDATE
RECOMMENDATION:
Receive and file CARES Act - COVID-19 funding update.
BACKGROUND/ANALYSIS:
The COVID-19 pandemic has impacted City operations by reducing revenue generated by consumer and business activity and creating costs associated with COVID-19. To offset the impacts of the pandemic, the City of Chino Hills has received coronavirus related funding from several sources, including the federal government, the State of California, and the County of San Bernardino (County).
 
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law on March 27, 2020. The $2 trillion economic relief package provided economic assistance to workers, families, businesses, states, and industries in response to the health and economic impacts of the COVID-19 pandemic. It also set up a $150 billion relief fund to provide direct U.S. Treasury allocations to states and eligible units of local government, which included counties and cities with populations over 500,000. Cities with populations below 500,000, did not receive this direct funding, but instead were allocated additional Community Development Block Grant Coronavirus (CDBG-CV) funds.
 
Subsequently, on June 30, 2020, Governor Newsom signed the 2020 Budget Act for California, which distributed state CARES Act funds to counties and cities with populations less than 500,000. This allocation was calculated as follows: $225 million for cities with populations above 300,000, $275 million for cities under 300,000 population and $1.3 billion for counties.
 
In July, as part of the 2020 Budget Act, the City of Chino Hills was allotted $1,017,515 in direct CARES Act Coronavirus Relief Funds (CRF) through the California Department of Finance. Recently, the County redistributed $1,017,515 of their CRF funding to Chino Hills bringing the total direct CRF funding received by the City to $2,035,030. The County has also recently released a notice of funding availability to cities for infrastructure projects which is currently being evaluated by staff.
 
The U.S. Treasury has provided guidelines and eligible expenditure categories for the use of all CARES Act funds. Eligible costs must be necessary expenditures incurred due to the public health emergency with respect to COVID-19; not accounted for in the budget most recently approved as of the date of enactment of this section for the State or government; and incurred during the period that begins on March 1, 2020, and ends on December 30, 2020. Expenditure categories include payroll and benefits for budgeted personnel and services diverted to a substantially different use, payroll and benefits for public health and safety employees, improving telework capabilities of public employees, personal protective equipment, and public health expenses. Funds cannot be used to backfill lost revenue.
 
The City must account for the use of the state funds by submitting an electronic report through a grant portal detailing the expenditures for each applicable category based on the time they were incurred. The County funds are distributed on a reimbursement basis and the City will submit invoices for County review and approval before being reimbursed for costs incurred. The City has directed the $2,035,030 in CARES Act – CRF monies towards funding portions of the City’s necessary expenditures incurred for public health expenses; payroll for recreation staff whose job duties were redirected towards COVID-19 education and compliance activities such as monitoring parks, trails, and other City facilities; and payroll for public safety employees. These eligible categories are where the City incurred the majority of COVID-19 related expenses.
 
Additionally, the City received two rounds of CDBG-CV funding administered by the Department of Housing and Urban Development (HUD). The first allocation was for $245,261 and the second allocation was for $413,747, totaling $659,008. The first round of CDBG-CV monies have been allocated towards the City’s Microenterprise Business Grant Program, which has assisted 21 businesses so far. After receipt of the second allocation, the City Council directed staff to develop a modified Business Grant Program that could support larger businesses. Also, pursuant to the City Council’s direction, staff is exploring a senior meal delivery program. These programs must meet federal CARES Act and HUD guidelines, and requires a Substantial Amendment to the City’s CDBG 2019-2020 Annual Action Plan
 
Lastly, the Federal Emergency Management Agency (FEMA) released a Request for Public Assistance Grant Program in March in response to the national emergency declaration for the COVID-19 pandemic. Expenses eligible for reimbursement must be eligible emergency protective measures that are necessary to protect public health and safety pursuant to public health guidance. Applicants are required to submit project applications through the FEMA grant portal. Staff has submitted approximately $13,000 in eligible expenditures to the Federal Emergency Management Agency (FEMA) for reimbursement through the Public Assistance Grant Program. These expenditures are primarily purchases of PPE.
 
Staff will continue to monitor availability of federal, state, and county funding to assist the City in minimizing the financial impacts of COVID-19.
ENVIRONMENTAL (CEQA) REVIEW:
This proposed action is exempt from review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., "CEQA") and CEQA Guidelines (Title 14 California Code of Regulations §§ 15000, et seq.), because it does not involve any commitment to a specific project which could result in a potentially significant physical impact on the environment; and, constitutes an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. Accordingly, this action does not constitute a "project" that requires environmental review (see specifically 14 CCR § 15378(b)(4-5)).
FISCAL IMPACT:
None

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