Explanation
BACKGROUND: This legislation authorizes the amendment of Ordinance No. 1569-2023, passed by Columbus City Council on June 12, 2023, to authorize the modification of the grant agreement, to allow for an increase in the advance amount that was originally established, and to declare an emergency.
Ordinance No. 1569-2023, passed by Columbus City Council on June 12, 2023, authorized the Director of the Department of Development to execute a grant agreement with the Tony R Wells Foundation to provide rental, utility, and other assistance to residents in the Columbus metropolitan area affected by the COVID-19 pandemic. The ordinance states that advances will be paid in increments of $2,000,000.00 at a time, and that when $1,200,000.00 has been disbursed, the Wells Foundation can request another advancement.
Due to expedited process that has been created for the ERA program as well as the record high number of eviction filings, the City is issuing a much higher volume of assistance payments on a weekly basis than was anticipated when the original contract was established. In order to ensure that we can continue to help residents avoid eviction and make payments to landlords in a timely manner, it is necessary to increase the advance amount that was established in the original contract. When the grantee has disbursed at least $1,000,000.00 in payments (originally $1,200,000.00) they may request the next advance which is being adjusted to $4,000,000.00 per advance (originally $2,000,000.00). The City has established ACH payments with this vendor to ensure that funds are transferred quickly and there is minimal disruption of payments.
Emergency action is requested to increase the advance amount in the contract which in turn provides funding to eligible recipients who are in immediate need of financial support to prevent eviction or loss of utilities. The eviction and housing instability rate has reached historic levels therefore the immediate intervention and supportive services will help residents in need with their housing and utility instability crisis thus allowing them to remain in their homes.
FISCAL IMPACT: No additional funding is necessary.
CONTRACT COMPLIANCE: the vendor number is 038668 and expires 06/22/2025.
Title
To amend Ordinance No. 1569-2023, passed by Columbus City Council on June 12, 2023, to authorize the modification of the existing grant agreement, to allow for an increase in the advance amount, and to declare an emergency. ($0.00)
Body
WHEREAS, the Director of the Department of Development executed a grant agreement with The Tony R Wells Foundation to provide rental, utility and other assistance to residents in the Columbus metropolitan area affected by the COVID-19 pandemic; and
WHEREAS, a record high number of eviction filings has caused the City to issue a much higher volume of assistance payments on a weekly basis than was originally anticipated;
WHEREAS, an emergency exists in the usual daily operation of the Department of Development to address the continued impacts of the COVID-19 health emergency to assure that assistance is provided to those residents affected in a timely manner;
WHEREAS, the Director of the Department of Development requests that Ordinance No. 1569-2023 be amended to allow for an increase in the advance amount; and
WHEREAS, an emergency exists in the daily operation of the Department of Development in that it is immediately necessary to amend Ordinance 1569-2023, passed by Columbus City Council on June 12, 2023, to allow for the increase of the advance amount in the contract in order to help provide funding to eligible recipients to help address the housing and utility instability crisis which will then allow residents to remain in their homes; NOW THEREFORE,
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the Background of 1569-2023 be amended to read:
BACKGROUND: This legislation authorizes the Director of the Department of Development to execute a grant agreement with the Tony R. Wells Foundation dba The Wells Foundation in an amount up to $26,125,000.00 of U.S. Department of Treasury Emergency Rental Assistance 2 (ERA 2) funds to act as a Fiscal Manager for the disbursement of ERA funds to eligible recipients as part of the department’s ERA 2 Investment Strategy and to authorize an agreement start date of June 1, 2023.
The Wells Foundation, a non-profit philanthropic organization, is a “contractor” under federal uniform guidance rules and the agreement that will be used by the department is the city’s Grant Agreement because funds are being advanced.
Ordinance 2275-2021 authorizes the City of Columbus to accept and appropriate up to $90,537,806.23 of federal Emergency Rental Assistance (ERA 2) program funds, as passed by the Consolidated Appropriations Act of 2021. Federal guidelines allows for payment of eligible expenses starting March 3, 2021.
Of this amount, $26,125,000.00 will be used for an agreement with The Wells Foundation to partner with local non-profit agencies and other program service providers and act as the program Fiscal Manager to disburse funding directly to eligible recipients of the ERA program. Disbursements will be to landlords, utility companies, and other service providers on behalf of eligible recipients.
The City has disbursed approximately $23 million of the $90.5 million of ERA 2 funds received from the U.S. Department of Treasury as a result of the COVID-19 emergency. This is in addition to the $38.3 million of ERA 1 funds disbursed. The remaining $67.5 million of ERA 2 funds will be disbursed under two programs: Investment Strategy and Innovations Strategy.
The department’s ERA 2 Investment Strategy program will require a number of agreements/contracts with various entities and legislation will come before City Council as the agreements/contracts are needed. Similar to how prior ERA funds were contracted/expended, the department shall work with various non-profit agencies to inform the public that these funds are available and the non-profit agencies will provide intake/application services. There are other entities involved that will provide “operation services” (web site hosting, eligibility determination, monitoring, fraud investigation, software platform, etc.) as well. Instead of giving funds directly to the non-profits to disburse to eligible recipients, the department would contract with The Wells Foundation to hold and disburse the funds. The U.S. Department of Treasury has encouraged jurisdictions to look at ways to expedite payments by centralizing payment processing as one of their best practices.
The department will put in place a number of risk reduction and monitoring procedures to safeguard the funds under this agreement. First, funds will not be advanced all at once. Instead, $2,000,000.00 $4,000,000.00 will be advanced at a time. When $1,200,000.00 $1,000,000.00 has been disbursed, The Wells Foundation can request another advancement. This will continue until the funds have been disbursed. Next, the department will contract with consultants to provide federal monitoring services and fraud investigation services. The Wells Foundation will also be required to provide Commercial Crime Insurance. The Wells Foundation shall provide 1099s as required under law.
Emergency action is requested to set up the infrastructure for the Investment Strategy Program as soon as possible in order to provide funding to eligible recipients who are in immediate need of financial support to prevent eviction or loss of utilities as well the city needing to expend these federal funds by December 2025.
SECTION 2. That the existing Background to 1569-2023 is hereby repealed.
SECTION 3. That the Director of Development is hereby authorized to modify the grant agreement with the Tony R. Wells Foundation dba The Wells Foundation to conform to the modifications made to 1589-2023.
SECTION 4. That for the reasons stated in the preamble hereto, which is hereby made a part hereof, this ordinance is hereby declared to be an emergency measure which shall take effect and be in force from and after its passage and approval by the Mayor, or ten days after passage if the Mayor neither approves nor vetoes it.