The village of Oak Park is expecting to receive $38.9 million through the federal American Rescue Plan Act. Village staff is suggesting spending the majority of it to cover the projected $31 million in village revenues lost due to COVID-19. At least one trustee is seeking a wider discussion before spending decisions are made. The suggestion from staff was brought before the village board for discussion at its July 6 meeting.
Under the America Rescue Plan Act, municipalities are able to use their share of funding to recoup financially from the pandemic, according to Village Manager Cara Pavlicek.
“The guidance allows for the village to reimburse itself or recover those funds that we lost when we look at where our revenues were in 2019 as compared to what happened in the village in 2020,” she said.
The village’s share is being dispensed from the federal government in two payments of $19 million, the first of which has already been received. The village has to have the money allocated for spending by the end of 2024 and spent by 2026. Spending will spur long-term recovery based on economic mobility and COVID-19 health equity. Economic mobility pertains to small businesses and individuals impacted financially by the pandemic.
Village CFO Steve Drazner said the $31 million in lost revenue he projected is variable and could change over time,
“I’m trying to give you my best estimate that I can with the information I’ve been given,” said Drazner.
The CFO also said he understood the steepness of using the expected $38.9 million, which he rounded up to $39 million, to recoup lost revenues.
“I do realize that $31 million does seem awfully high – $31 [million] out of the $39 million towards revenues, but those are the numbers that I’m coming up with right now,” he said.
Drazner included certain revenues that do not qualify for the American Rescue Plan Act funds and those that no longer exist, including the defunct school resource officer program, within his lost revenue projection in compliance with guidelines from the U.S. Department of the Treasury.
Trustee Arti Walker-Peddakotla wants to have input from the community, particularly those most impacted by COVID-19, to determine how to spend the American Rescue Plan Act funds.
“I would love to see if we could use some of these dollars for participatory budgeting,” she said.
In a One View submitted to Wednesday Journal (see sidebar) Walker Peddakotla argues this is a “once in a generation opportunity” to rethink and to fund new priorities in the village. She is proposing community meetings to gather input from citizens, especially those most directly impacted by COVID.
Village President Vicki Scaman asked that the village’s community partners, such as the Oak Park and River Forest Chamber of Commerce, be included in spending conversations.
Staff will present the board at its July 19 meeting with a budget amendment that will address revenue recovery for fiscal year 2020, which would take care of some of the village’s immediate needs.
“On July 19, we’re only asking to address the 2020 revenue loss in 2021 for roughly the first six months,” said Pavlicek. “We’re not asking you to lock in the full $31 million projected revenue loss.”
During the fiscal year 2022 budgeting process, the board will have an opportunity to build a process for longer-term issues related to health equity, infrastructure and economic mobility, according to the soon-to-be-departing village manager.
“We do feel that we can’t go into the [fiscal year 2022] budget development process without understanding where we have recovered revenues for 2020,” said Pavlicek. “It will make a difference in what staff can bring forward based upon the board goals.”
As the pandemic evolves, department directors are beginning to understand areas where the village needs additional resources to address such issues within the community as vaccinations, health education and other COVID-19 related concerns.
“Health education is going to be incredibly important moving forward,” said Pavlicek.
“We also have some of the infrastructure issues related to, say, water or broadband and those other items we need to bring forward.”
American Rescue Plan Act includes spending restrictions, to which Oak Park must adhere. The village cannot use the money to pay off village bond debt nor can it be used to fund the unfunded police and fire pension liabilities, according to Drazner. Pavlicek added that certain areas of lost revenue, such as water and sewer revenues, also do not qualify for use of American Rescue Act funding.
“There are a lot of moving parts here,” said Trustee Jim Taglia during the discussion. “It’s a lot to take in.”
In a One View submitted to Wednesday Journal,Trustee Arti Walker Peddakotla says that before the village board commits on spending plans for the $39 million in federal COVID recovery funds it is receiving that there should be community input on ways those impacted COVID would want the money spent. Here is that One View.
Citizens should have a say
The village of Oak Park is slated to receive $38.9 million in American Rescue Plan (ARP) funds from the federal government. ARP specifies that the funds have four authorized uses:
1) Responding to public health needs and economic damage from the pandemic,
2) Providing premium/hazard pay for essential workers,
3) Replacing lost revenue,
4) Investing in necessary water and broadband infrastructure.
At the July 6 board meeting, the village trustees had our first discussion of how to distribute the $38.9 million in ARP funds. Village staff presented a plan where $31 million would go to the village to recover “lost revenue,” and $8 million would go to community partners (such as Housing Forward and Beyond Hunger) and toward the creation of a Business and Not-for-Profit COVID Recovery program.
As a board member, this was my first time hearing of the distribution strategy for the ARP funds. And as I reviewed the documents and listened to the conversation, it became clear that the community had not been consulted on the use of these funds. Additionally, I am not in agreement with the village pocketing over 75% of the ARP funds in the name of “lost revenue.” As discussed during the June 14 board meeting, the downfall in revenue anticipated by the village in 2020 was not as severe as anticipated, resulting in a surplus in our General Fund (See the Comprehensive Annual Financial Report, MD&A page 10, from Agenda Item A, June 14, 2021 Board Meeting). So even though the village lost revenue, it wasn’t as great of a loss as anticipated and certainly not a $31 million revenue loss.
The village has yet to host an open forum inviting community members to share their ideas for how the village’s ARP funds should be invested. These are taxpayer dollars after all, so shouldn’t community members have a majority voice in this discussion? In my conversations with community members, it’s clear that the pandemic has exacerbated already existing issues in our community. From mental and physical health issues, to housing and job insecurity, and lack of access to basic necessities, people in our community are struggling. Everyone should be concerned that our village’s budget is being centered on these discussions over the basic needs of our residents.
The ARP funds offer the village a once-in-a-generation chance to reimagine our community so that everyone has what they need to thrive. We can use the pandemic as a portal to imagine and create a new world. What can we create with ARP funds that doesn’t currently exist? What mental health services could we build so that mental health professionals, not the police, respond to calls for crisis? What public health outreach programs can we create that would proactively address health issues for our residents? This opportunity is not the time to prioritize fiscal conservatism over the needs of our community.
It’s time for you, community member, to demand more from your village government, and ensure that ARP funds are utilized in ways that most benefit our community. Email the board of trustees at firstname.lastname@example.org, or submit your public comment for the next board meeting at email@example.com, and let us know what community initiatives you want to support with the $38.9 million in ARP funds.
Arti Walker-Peddakotla is an Oak Park village trustee.