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Home My WebLink AboutReg 2020-05-18 Item 4A - COVID-19 - House Bill 1406 Regarding Revenue SpendingCOUNCIL AGENDA SYNOPSIS ---------------------------------- Initials Meefinga Date Prepared by Mayor's review Council review 05/18/20 SH ITEM INFORMATION ITEMNO. STAFF SPONSOR: STACY HANSEN ORIGINAL AGENDA DATE: 05/18/20 AGENDA ITEM TITLE HB 1406 Rental Assistance Funds Distribution Update CATEGORY ® Discussion ,Utg Date 05118120 ❑ Motion Utg Date ❑ Resolution Utg Date ❑ Ordinance Utg Date ❑ Bid Award Utg Date ❑ Public Hearing Utg Date ❑ Otber Utg Date SPONSOR ❑Council ®Mayor ❑HR ❑DCD ❑Finance ❑Fire ❑TS ❑P&R ❑Police ❑Pik ❑Court SPONSOR'S City Council requested that staff return in mid -May to share data related to residents who SLTMNLARY received rental assistance due to income loss directly related to the COVID-19 crisis. On April 6, 2020, Council determined that as a temporary financial diversion measure, 90% of recaptured HB 1406 funds would temporarily be allocated to the Human Services program to expand and enhance the current rental assistance program. REVIE','ED BY ❑ Trans&Infrastructure ❑ CommunitySvs/Safety ❑ Finance Comm. ❑ Planning/Economic Dev. ❑ LTAC ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: N/A COMMITTEE CHAIR: N/A RECOMMENDATIONS: SPONSOR/ADMIN. Administrative Services/Human Services COMMITTEE Discussion only COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $50,003 $50,003 $50,003 Fund Source: HB 1406 Comments: recaptured state sales tax MTG. DATE RECORD OF COUNCIL ACTION MTG. DATE ATTACHMENTS 05/18/20 Informational Memorandum dated 05/11/20 17 IN City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: City Council CC: Mayor Ekberg FROM: Stacy Hansen, Human Services Program Coordinator DATE: May 11, 2020 SUBJECT: HB 1406 Rental Assistance Funds Distribution Update ISSUE The Council has requested an update on the distribution of HB 1406 rental assistance funds in the City of Tukwila. DISCUSSION During the 2019 legislative session, the state approved HB 1406 which is a local revenue sharing program for local governments. This allows local governments to collect a portion of state sales tax for addressing affordable housing. The tax credit is in place for up to 20 years. All projects funded by HB 1406 must serve those at or below 60% of the area median income (AMI). Homelessness and affordable housing are key issues both in the region as a whole and in the City of Tukwila itself. The revenue available to cities through this bill is a way to begin to address this issue through acquiring, rehabilitating, or constructing affordable housing; operations and maintenance of new affordable housing or supportive housing facilities; or for rental assistance. On April 6, 2020, the City Council approved Resolution 1984 to temporarily distribute HB 1406 funds on a 90%/10% split between direct rental assistance to Tukwila residents and the South King County Housing and Homelessness Partnership (SKHHP). The City recognizes that many residents are being adversely affected by the economic challenges associated with the coronavirus pandemic and temporarily providing the majority of these funds to residents in need of rental assistance will help prevent homelessness within the Tukwila Community. The following chart represents the HB 1406 funds received through the 2020 February sales tax remittances, as well as the totals available for distribution for rental assistance and SKHHP. Because of the coronavirus pandemic, the City is not counting on any additional HB 1406 funds after February given the large-scale shut down of businesses throughout the state and the associated significant slump in sales tax. Because sales tax is remitted to cities two months later than expended, staff will reevaluate available funds once the March sales tax funds are received and provide Council with an update on next steps. $33,129.87 Funds received in 2019 $12,428.53 Funds received for January, 2020 $10,000.53 Funds anticipated for February, 2020 $55,558.93 Total funds anticipated through February, 2020 $50,003.04 90% of total funds for rental assistance $ 5,555.89 10% of total funds available to SKHHP Human Services staff worked directly with Finance staff to develop an internal process to ensure that all HB 1406 funds could go directly to rental assistance with no administration fees via a community nonprofit. Staff have put significant protocols in place to ensure the proper INFORMATIONAL MEMO Page 2 documentation is received, such as copies of the lease and landlords' W-9, before processing rental assistance requests. Because staff recognizes that the financial difficulties associated with the pandemic will last for the next few months at a minimum, staff is working to distribute the HB 1406 rental assistance funds in the months of May, June and July, equaling approximately $17,250 in each of these three months. Staff expects to distribute the full $51,832.56 in rental assistance over the next three months. Staff has also temporarily increased the lifetime limit allowed for rental assistance from $700 per family to $1,200 due to the significant nature of the economic realities associated with the pandemic. In addition, for the month of May only, the City has partnered with the Tukwila Children's Foundation (TCF) on the distribution of an additional $9,000. These are one-time funds available to families in need of rental assistance with a child between the ages of 0-21. While TCF has been responsible for distributing their funds, they relied on Tukwila's Human Services staff to do the necessary intake and work with landlords to validate the need for rental assistance. TCF funds do not count toward the City's lifetime limit and have been leveraged to "patchwork" with City funds to help families close the gap in their rent responsibilities. City staff also works with clients to identify other potential rental assistance funding sources when available, such as the King County Bar Association, Refugee Women's Alliance and others. The Human Services program also provides approximately $4,400 a month on rental and utility assistance as a part of its general fund budget. All three of these programs — HB 1406, TCF and general fund — equal nearly $30,000 in the month of May. As of May 11, 2020, $28,000 of the $30,000 has been committed. This funding reflects direct assistance to 23 families in Tukwila, averaging just over $1,200 per family. Families served come from a variety of backgrounds, from new arrivals recently settled in Tukwila, to single adults to families with disabled children. Most families are experiencing either significant hours lost at their jobs or unemployment all together and come from a variety of industries — i.e. hospitality, "gig" sectors, construction. The graph below illustrates the timeframe May 1, 2020 through May 12, 2020. It includes number of households (and individuals), which funding sources were used for the `patchwork' of rental assistance. The City has served 21 households with a combined dollar amount (from all three funding sources) of $25,947. Five of the households were single adults. The range of need was from $585 to $5400. Households served were originally from a wide range of countries, including all over Africa, Asia, many Spanish-speaking countries, Afghanistan, Pacific Islands and the US. All II11ei 'wl Assistance1406 funds TCF # of households 14 12 # of individuals 30 34 Single adults 4 households/total 14/$15,914 12/$8,269 spent household average $1,137 $689 Types of 4 employment Hospitality Human Services General Fund 2/$1765 $883 20 https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Human Services/Info memo - HB1406 Rental Assistance Funds Dist. Update.docx INFORMATIONAL MEMO Page 3 Uber/Lyft/Transp. 8 Airport 3 Self Employed 2 Service 3 (Construction) While the state is working to open up the economy and therefore many jobs will come back online, we expect this to be a slow reopening, with affected employees receiving less hours than usual as things ramp up. In addition, staff recognizes that whenever individuals go back to paid employment they will be working on paying next month's rent, not the total that has accumulated since their employment was interrupted in March with the Stay Home, Stay Healthy order. Staff expects to distribute the remaining $34,500 in HB 1406 in June and July. Should there not be a need for these funds, Council will determine its distribution. As agreed to at the April 6, 2020 Council meeting, staff will return to Council once the pandemic is over to determine the appropriate long-term distribution of HB 1406 funds between rental assistance and SKHHP. https://tukwilawa.sharepoint.com/sites/mayorsoffice/cc/Council Agenda Items/Human Services/Info memo - HB1406 Rental Assistance Funds Dist. Update.docx 21