Oak Park’s village board Monday narrowly passed — a 4-3 vote — a budget amendment that would allow for the allocation of $14 million in federal American Rescue Plan Act funds to reimburse the village for lost revenues during the COVID-19 pandemic.
While residents took to public comment to ask the village board for a chance to provide input regarding fund allocation, Village President Vicki Scaman, who supports having community involvement in future federal COVID funding conversations, stressed the urgency in passing the amendment.
“We will have opportunity as we continue to go through our budget process and continue to look at this funding to engage our community, but if we don’t pay ourselves back as a municipality for some of our lost revenue then we will simply not have money to implement our goals,” she said. “Plain and simple.”
So far, Oak Park has received $19 million, about half of the $38.9 million it expects to receive, in COVID funds. None of the newly allocated $14 million will be spent until U.S. Department of the Treasury has approved the allocation.
The amendment itself is worth about $16 million in total, with the $2 million not covered by federal funds consisting of carryover from previous years and new funding requests from staff. The majority of the $14 million will go toward reimbursing the village’s general and parking funds, the latter of which will receive about $3.9 million and currently has a negative cash balance due to the pandemic. The parking fund also has bond issues that need paying in the amount of almost $2.5 million, according to Oak Park Chief Financial Officer Steve Drazner.
“We really need to move ahead and start allocating some of this money to the different internal funds,” said Trustee Jim Taglia, prior to the vote.
Taglia said budget discussions for the upcoming fiscal year begin next week, therefore presenting a need to address lost revenue in funds with deficits so as to keep the village’s property tax levy reasonable.
Village Manager Cara Pavlicek, who is leaving for a post in Northbrook next month, reiterated what she said during the May 24 meeting, stating that a large portion of the $38.9 million in COVID funds Oak Park is set to receive would need to go toward recouping revenue losses due to COVID-19 so that the village remains a fiscally stable organization.
“But for this fiscal year, we did indicate that the $17 million in cuts that were done in ’21 relative to the pandemic – to cut positions that were vacant, to cut capital projects and other items, we knew that we would never recover those unless there was some sense of federal funding for that,” she said.
Those cuts allowed the village to make payroll and avoid laying off members of staff.
The village is also still spending a large sum of money on the ongoing pandemic response, according to Pavlicek. Village staff intends to bring to the board a recommendation Aug. 2 for another chunk of COVID funds for use in continued aid for individuals and businesses in the village.
The bigger picture items related to health equity and infrastructure, such as broadband and lead water pipes, were not ranked as immediate needs by staff, according to Pavlicek, as those take longer to determine and address
Pavlicek shared a “significant” concern that the village would remain in a negative fiscal position if federal COVID funds were not used to cover the deficit in the parking fund. Funds from the village’s general fund would need to be diverted to cover parking bonds otherwise.
As the village doesn’t have to have the federal COVID funds committed for spending until 2024 and spent in full by 2026, Trustee Arti Walker-Peddakotla wanted to wait to distribute funds until the community has had a chance to provide feedback.
“I understand that we need to recover some of the money that we lost during the pandemic,” Walker-Peddakotla said. “However, I would argue that we should not be distributing any of these funds right now because we haven’t had any community input.”
With the upcoming budget discussions for the next fiscal year, Pavlicek advised the board not to wait too long before allocating funds.
Drazner said the board shouldn’t wait any longer than a couple of months before deciding as a lack of action can create a “domino effect” with other funds that would have to be used in place of COVID funds, which Walker-Peddakotla said was helpful.
“If we can wait a couple of months, let’s have a community forum before we distribute any of these funds,” she said.
She clarified that she wasn’t against the village using federal COVID funds to recoup revenue. She just wanted to hear from the community first before distributing funds.
Trustee Lucia Robinson suggested passing the current amendment but earmarking some future portion of the federal funding until there is a community discussion, which Scaman supported.
After clarifying what motions were on the table, the board ended up voting on the amendment as written, which passed 4-3 with Taglia, Scaman, Robinson and Trustee Susan Buchanan voting yes. Walker-Peddakotla, Trustee Chibuike Enyia and Trustee Ravi Parakkat dissented. The board agreed to allow community input in future discussions on how to allocate the federal COVID funds.