2020-049 CARES ActDate: May 8, 2020 Report No. 2020-049
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Provide updates to the City Council regarding the federal CARES Act and COVID-19 funding
opportunities and requests
BACKGROUND:
The CARES Act of 2020 appropriated coronavirus relief funding for all 50 states and local
governments with populations above 500,000. Within the Act, the State of Texas was eligible to
receive an estimated $11.243 billion for coronavirus response activities while Denton County was
eligible to receive an estimated $145.9 million. The CARES Act does not require state
governments to make their funding directly available to subsidiary local governments. The City of
Denton, and its federal and state legislative consultants, will continue to advocate for all local
governments to be eligible for direct federal funding in future federal legislation in addition to
advocating for the State of Texas to provide direct pass-through CARES Act funding to local
governments with a population under 500,000.
City staff will continue to identify City programs that are eligible to receive these funds, while also
pursuing other funding opportunities as they become available. This recurring report will update
the City Council on the status of CARES Act related funding and additional opportunities that may
have been identified.
DISCUSSION:
The following updates are provided for the week of May 4 through May 8, 2020.
CARES Act Funding From the State of Texas – On May 5, 2020, Mayor Watts joined a Texas
Municipal League initiative for mayors across the state to make a formal request to Governor
Abbott (Attachment 1) to prioritize the creation of guidelines for how local governments with
populations under 500,000 may apply for CARES Act funding through the State of Texas (of
which Texas was granted over $8 billion). The letter notes the impact that COVID-19 has had on
cities regardless of their population size and emphasizes the leading role all cities will play in
sparking economic recovery and leading the state out of the pandemic. This letter was transmitted
to the Governor on Thursday, May 7.
Request for Support for FLEX Act – On Wednesday, May 6, Mayor Watts submitted a letter
(Attachment 2) to the Office of Representative Michael Burgess requesting his support for the
Flexibility for Localities and Eligibility Expansion Act of 2020 (FLEX Act). The FLEX Act is a
bipartisan bill proposing amendments to the recently-enacted CARES Act and its provisions
regarding the $150 billion Coronavirus Relief Fund (CRF), which is providing assistance to states
and to cities and counties over 500,000 population. The bill would explicitly allow the State of
Texas and Denton County to share their CRF funds with Denton and other cities under 500,000
population. It would also modify the CARES Act to allow states and local governments to use
CRF funds to offset lost revenue due to COVID-19. Staff will continue to monitor this legislation.
Date: May 8, 2020 Report No. 2020-049
CARES Act NEA Grant Eligibility – Council Member Meltzer asked if the City of Denton would
be eligible for grants made available through the National Endowment for the Arts (NEA) from
the CARES Act. The NEA released guidelines for the CARES Act grants in early April. To be
eligible for an NEA grant, organizations must:
Be a nonprofit, tax-exempt 501(c)(3), U.S. organizations; units of state or local
government; or federally recognized tribal communities or tribes;
Have received an Arts Endowment award within the past four years;
Meet the NEA legal requirements;
Have submitted final reports for all previous awards received.
Based on the criteria of having to have received an Arts Endowment award within the past four
years, the City of Denton is not eligible to apply directly.
CARES Act Funding from the State of Texas for ESG
The CARES Act (March 27, 2020) included $4 billion to be distributed through the federal
Emergency Solutions Grant (ESG) Program to provide services to help persons that are at-risk of
homelessness or homeless quickly regain stability in permanent housing.
• $38,525,059 in ESG CARES was distributed by HUD directly to several cities and counties
in Texas. Based on formula allocations, the City is not eligible for direct allocations from
HUD.
• $33,254,679 was allocated to the State through the Texas Department of Housing and
Community Affairs (TDHCA). The City is eligible to apply for State ESG funding.
TDHCA allocated $13,329,434 to existing ESG Subrecipients. Denton County Friends of the
Family, Inc. has conditionally been awarded ESG CARES First Allocation funds in the amount of
$225,055.
TDHCA allocated $16,377,511 for Continuum of Care (CoC) lead agencies to award through a
CoC award process. Out of the $16,377,511 allocated to all CoC’s in Texas by TDHCA, there is
$6,928,889 in ESG-CV grant funding available for eligible agencies in the Texas Balance of State
Continuum of Care (TX BoS CoC). After consultation with local agencies and the United Way of
Denton County which is the backbone agency for the Denton County Homelessness Leadership
Team (DCHLT), Community Development has submitted a Letter of Intent to apply for the ESG-
CV funds allocated to the TX BoS CoC lead agency, Texas Homeless Network. Staff will work
with local agencies to apply once the TX BoS CoC releases the ESG-CV grant funding application.
Additional Funding Opportunities – Finance staff has also learned this week that the Fire
Department may be eligible for additional CARES act funding through a second round of
disbursement from the Department of Health and Human Services. Staff submitted the application
and supporting documentation this week. Round 2 eligibility and allocation amount will be
determined by looking at the money received from Round 1 and the Fire Department’s total 2019
revenue. Staff will update Council as eligibility and funding details are received. The chart below
provides a summary of grant activity.
Date: May 8, 2020 Report No. 2020-049
ATTACHMENTS:
1. Texas Municipal League Funding Letter
2. Letter of support for HR 6652
STAFF CONTACT:
Stuart Birdseye
Assistant to the City Manager
Stuart.Birdseye@cityofdenton.com
(940) 349-8009
REQUESTOR: Staff initiated
PARTICIPATING DEPARTMENTS: City Manager’s Office, Public Affairs, Economic
Development, Finance
STAFF TIME TO COMPLETE REPORT: One hour
May 7, 2020
Dear Governor Abbott,
First, thank you for your guidance and leadership during this uniquely challenging time. As mayors
from cities across Texas, we fully understand the need to revitalize economic opportunity for all
Texans while also ensuring we are doing all we can to protect public health by stopping the spread
of COVID-19. We stand ready to assist you in this endeavor in every way possible.
On March 27th, President Trump signed into law the Coronavirus Aid, Relief, and Economic
Security Act, which provided over $2 trillion in emergency relief funds to help mitigate the
financial harm caused by COVID-19. Included in the funding was $11.24 billion from the
Coronavirus Relief Fund (CRF), which was split between the state of Texas and local governments
in Texas with populations exceeding 500,000. While the six largest cities in Texas received a direct
allocation of this funding from the federal government, no other Texas city has received CRF
revenue to assist with disaster response. Needless to say, the virus representing our common enemy
at the moment does not acknowledge city boundaries or population distinctions. Every single
Texas city has a role to play in the battle for our state’s health and prosperity.
To that end, we’ve been encouraged to learn that your office is currently establishing a program
for the distribution of a portion of the state’s revenue received from the CRF to cities with
populations under 500,000. This funding is critical to support Texas cities and the services they
are providing on the front lines of the COVID-19 emergency. We ask that you consider allowing
any funds received by Texas cities to be used in the most flexible manner permitted by law. Though
the U.S. Department of Treasury’s guidance prohibits the use of CRF funds for revenue
replacement of budget shortfalls in governments’ budgets, there are ongoing discussions at the
congressional level about potentially expanding permissible CRF expenditures to include revenue
replacement. Should federal legislation allow for increased expenditure flexibility, we request that
any state program follow suit.
However, we are concerned that guidelines on how to apply for that funding have not yet been
released to the public. Cities are now in the midst of preparing budgets, and barring CRF
information, cities are left with making tough budgetary decisions that affect their entire
communities and organization. Furthermore, there is no clear indication on where cities, that are
under the 500,000-population requirement, but fall within a county receiving assistance from the
CRF, should apply for funding. These cities are unsure on whether to work with the state or with
their county on financial assistance. We ask that application guidelines, including a clarification
for cities within a 500,000-population county, be published swiftly so that cities can continue to
plan and provide public services without serious interruption.
Texas cities are in a unique position to both stem the tide of COVID-19 in Texas, and to help spark
our economic recovery. With the necessary resources, we are confident that Texas cities will lead
the state back towards a prosperous and vibrant future.
Sincerely,
Eddie Daffern, TML President
Mayor, City of Staples
Martha Castex-Tatum, Vice Mayor Pro Tem
City of Houston
Steve Adler, Mayor
City of Austin
Dee Margo, Mayor
City of El Paso
Jeff Williams, Mayor
City of Arlington
Dan Pope, Mayor
City of Lubbock
Karen Hunt, TML President-Elect
Mayor, City of Coppell
Ron Nirenberg, Mayor
City of San Antonio
Betsy Price, Mayor
City of Fort Worth
Joe McComb, Mayor
City of Corpus Christi
Ginger Nelson, Mayor
City of Amarillo
Harry LaRosiliere, Mayor
City of Plano
Jeff Cheney, Mayor
City of Frisco
Scott LeMay, Mayor
City of Garland
Joe Zimmerman, Mayor
City of Sugar Land
Rick Stopher, Mayor
City of Irving
George Fuller, Mayor
City of McKinney
Chris Watts, Mayor
City of Denton
Ron Jensen, Mayor
City of Grand Prairie
James D. Yarbrough, Mayor
City of Galveston
Toby Powell, Mayor
City of Conroe
Jane Hughson, Mayor
City of San Marcos
Kenny Phillips, Mayor
City of Mobile City
Henry Wilson, Mayor
City of Hurst
Linda Martin, Mayor
City of Euless
Cecelia Cissy Gonzalez-Dippel, Mayor
City of Floresville
Larry Vernon, Mayor
City of Eastland
Laurie Blanco, Mayor
City of Dalworthington Gardens
Tom Daly, Mayor
City of Selma
Roy Tovar, Mayor
City of Waelder
Don Denbow, Mayor
City of Corsicana
GeoJan Wright
GeoJan Wright, Mayor
City of Coffee City
Flora Brady, Mayor
City of Andrews
Gerald Joubert, Mayor
City of Forest Hill
Lynn Ramsey
Lynn Ramsey, Mayor
City of Shamrock
Bill Blackburn, Mayor
City of Kerrville
Andrew S. Friedberg, Mayor
City of Bellaire
Michel J. Bechtel, Mayor
City of Morgan’s Point
Dr. Ambrosio Hernandez, Mayor
City of Pharr
Michael Barnhart, Mayor
City of Lake Dallas
Manny Baeza, Mayor
City of Marfa
Susie Houston
Susie Houston, Mayor
Town of Laguna Vista
Lane Horwood
Lane Horwood, Mayor
City of Sterling City
Dorothy Welch
Dorothy Welch, Mayor
City of Splendora
Steve Spicer, Mayor
City of Jamaica Beach
Lynda Lynn
Lynda Lynn, Mayor
City of Electra
Garry Manitzas
Garry Manitzas, Mayor
City of Fair Oaks Ranch
Glen Smith
Glen Smith, Mayor
City of Palacios
Keith Short
Keith Short, Mayor
City of McLendon-Chisholm
Cathy Young, Mayor
City of Chillicothe
David Rutledge
David Rutledge, Mayor
City of Bridge City
Jim McInnis
Jim McInnis, Mayor
City of Hamilton
Thomas G. Kolupski, Mayor
City of Seabrook
Jim McKenzie, Mayor
City of Sweetwater
Scott Neu, Mayor
City of Lindsay
Trey Mendez
Trey Mendez, Mayor
City of Brownsville
Stephen Mason, Mayor
City of Cedar Hill
Doyle Robinson
Doyle Robinson, Mayor
City of Panhandle
Pam Frederick
Pam Frederick, Mayor
City of Bullard
Gilbert Gomez, Mayor
City of Robstown
Paul Johnson
Paul Johnson, Mayor
City of Jonestown
BJ McGinnis
BJ McGinnis, Mayor
City of Blanket
David Suarez, Mayor
City of Weslaco
Roger Shugart
Roger Shugart, Mayor
City of Brazoria
Billy P.Davis
Billy P. Davis, Mayor
City of Crowley
Cathy Skurow, Mayor
City of Portland
Gary Chumley
Gary Chumley, Mayor
City of Gatesville
Stephen L. Santellana, Mayor
City of Wichita Falls
Lisa B. Pierce
Lisa B. Pierce, Mayor
City of Kirby
David R. Turner
David R. Turner, Mayor
City of Odessa
Martin Heines, Mayor
City of Tyler
George R. Haehn
George R. Haehn, Mayor
City of Buda
Ritch Wheeler
Ritch Wheeler, Mayor
City of Shenandoah
Dale Ross, Mayor
City of Georgetown
Carl Marino
Carl Marino, Mayor
City of Fayetteville
Galen Mansee
Galen Mansee, Mayor
City of Stagecoach
Mary Moore
Mary Moore, Mayor
City of Pearsall
William D. Sciscoe, Mayor
City of Dish
Andrew L. Smith
Andrew L. Smith, Mayor
City of Hillsboro
Emmanuel Wealthy, Mayor
City of Wilmer
Thurman Bill Bartie, Mayor
City of Port Arthur
Jeff Jordan, Mayor
City of Kaufman
Nancy Moore
Nancy Moore, Mayor Pro Tem
City of Tye
Charles Bujan
Charles Bujan, Mayor
City of Port Aransas
Joe Chow, Mayor
Town of Addison
Trudia Preston
Trudia Preston, Mayor
City of Goliad
Frank George
Frank George, Mayor
City of Kirbyville
Mark Groneman
Mark Groneman, Mayor
City of Vega
Bob Bruggeman, Mayor
City of Texarkana
Anita Rodriguez, Mayor
City of Yoakum
Luis D. Carrera
Luis D. Carrera, Mayor
City of Cockrell Hill
Brenda Gunter, Mayor
City of San Angelo
Jason Tabor, Mayor
City of Santa Fe
Nancy Ruckstaetter
Nancy Ruckstaetter, Mayor
City of Log Cabin
Bruce Archer
Bruce Archer, Mayor
City of Mesquite
Frank Moreno
Frank Moreno, Mayor
City of Crystal City
Cyndie Rathbun, Mayor
Town of Rancho Viejo
Nick Sanders
Nick Sanders, Mayor
Town of Trophy Club
Phyllis Santleben
Phyllis Santleben, Mayor
City of Castroville
Harold D. Chandler, Mayor
City of East Tawakoni
Royking Potter, Mayor
City of Shallowater
Victor A. Contreras, Mayor
City of Marion
Janice Whitehead
Janice Whitehead, Mayor
City of Sealy
Curtistene S. McCowan
Curtistene S. McCowan, Mayor
City of DeSoto
Andy Williams
Andy Williams, Mayor
City of Nolanville
Clarence Burns
Clarence Burns, Mayor
City of Linden
Todd Purcell, Mayor
City of Dripping Springs
Lindsey L. Webb, Mayor
City of Abernathy
Oscar Trevino
Oscar Trevino, Mayor
City of North Richland Hills
John Packer, Mayor
City of Marble Falls
Bruno Lozano, Mayor
City of Del Rio
James C. Samples
James C. Samples, Mayor
City of Hughes Springs
Sam Miller
Sam Miller, Mayor
City of Sudan
Becky Ames
Becky Ames, Mayor
City of Beaumont
Jerry B. Dittrich, Mayor
City of Benbrook
Leroy Hughes
Leroy Hughes, Mayor
City of San Augustine
Johnnie Hauerland, Mayor
City of Meridian
Terri Brown, Mayor
City of Marshall
Sara Post Meyer, Mayor
City of Cuero
Ray Smith, Mayor
Town of Prosper
George Rivera
George Rivera, Mayor
City of Palm Valley
Allyson Crenshaw
Allyson Crenshaw, Mayor
City of Robert Lee
Lewis Ivey
Lewis Ivey, Mayor
City of Diboll
Geronimo M. Gonzales, Mayor
City of Brownfield
Tom Simons
Tom Simons, Mayor
City of Hereford
Mark Turner
Mark Turner, Mayor
City of Wills Point
Benjamin Gomez, Mayor
City of San Benito
Scott Anderson
Scott Anderson, Mayor
City of Patton Village
Merle Aaron, Mayor
City of Humble
Jose Segarra, Mayor
City of Killeen
Scott Cain, Mayor
City of Cleburne
Jim Olk
Jim Olk, Mayor
City of Lucas
cc: Texas Congressional Delegation
Texas State Senate
Texas House of Representatives
Governor Strike Force to Open Texas
Office of the Mayor
215 E. McKinney St., Denton, TX 76201 (940) 349-7717
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May 6, 2020
The Honorable Michael C. Burgess
United States House of Representatives
Washington, DC 20515
Via Email: rachel.huggins@mail.house.gov
Dear Representative Burgess:
I am writing to urge you to cosponsor and support the “Flexibility for Localities and Eligibility
Expansion Act of 2020” (FLEX Act), a bipartisan bill proposing amendments to the recently-enacted
CARES Act and its provisions regarding the $150 billion Coronavirus Relief Fund (CRF), which is
providing assistance to states and to cities and counties over 500,000 population. As you know, Denton's
population is below this threshold, and as a result we didn't receive any direct allocation these funds.
Representative Don Bacon introduced the FLEX Act (HR 6652) with ten original cosponsors, including
your colleague, Representative Michael McCaul. This bipartisan legislation would amend the CARES
Act by giving state and local governments additional flexibility in how funds can be used, including
addressing revenue shortfalls due to COVID-19. The current law and associated Treasury Department
guidance prohibits state and local governments from using CRF funds to offset lost revenues, a funding
eligibility granted by Congress in the CARES Act to airlines and airports, among others. Representative
Bacon’s bill would also explicitly allow the state and Denton County to share their CRF funds with
Denton and other cities under 500,000 population.
In Denton, in addition to closed business and dramatic declines in consumer and business spending, we
have closed facilities, canceled events, programs, and other activities, all of which have adversely
impacted city revenues as well as our budget. Enactment of this legislation would allow for cities,
including Denton, to offset revenue shortfalls in taxes and fees collected, intergovernmental transfers,
and dedicated revenue streams pledged for bond payments for the March 1-December 30, 2020 period.
These changes, if adopted, would significantly strengthen our efforts to deal with the financial effects of
COVID-19.
Thank you for your consideration of our request to cosponsor HR 6652, and we thank you for your
continued efforts on behalf of the City of Denton.
Sincerely,
Chris Watts
Mayor