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Operation New Vew Community Action Agency Funding Copyrighted January 7, 2019 City of Dubuque Action Items # 4. IT EM T IT LE: Operation New View Community Action Agency Funding SUMMARY: City Manager recommending approval to provide funding assistance to Operation New View CommunityAction Agency. SUGGESTED DISPOSITION: Suggested Disposition: Receiveand File;Approve ATTACHMENTS: Description Type Recommendation to Fund Operation New View-MVM Memo City Manager Memo Staff Memo Staff Memo ONV CashflowAnalysis Options Supporting Documentation THE CTTY OF Dubuque �" ui���eNe�ary DUB E 'il��i;' Masterpiece on the Mississippi Z°°' Z°'Z 2013 2017 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Recommendation to Fund Operation New View DATE: January 3, 2019 The City of Dubuque is one of four local governments that signed a 28E agreement to form Operation New View Community Action Agency in 1985. Operation New View serves a geographic area of Dubuque, Delaware and Jackson Counties; the three counties are the other signatories of the 28E agreement. Operation New View provides the Low-Income Heat Assistance Program, a financial assistance program to prevent people who have fallen on hard economic times from losing their heat in the winter; weatherization assistance to improve homes of low-income people so less energy is wasted; Head Start educational services for pre-school children, and other important community services. After an external audit and review from a peer team of executive directors and financial managers from other lowa community action agencies, it has been determined that Operation New View currently needs $120,000 to meet existing obligations to vendors and to meet payroll. In addition, the agency needs $100,000 to fill the remaining administrative gap in this fiscal year for a total of $220,000 in FY19. If these needs are not met, dissolution of the agency could be a threat. After the last Operation New View Board of Director's meeting, Board Chair Steve Drahozal convened a meeting of representatives from the three counties and the City of Dubuque to discuss how they could collectively meet the $220,000 shortfall, as the agency's service to the area's most at-risk residents is extremely important. After discussion, the elected officials agreed that the best division of the burden would be: City of Dubuque Dubuque Co Delaware Co Jackson Co 35% 35% 15% 15% FY2019 $77,000.00 $77,000.00 $33,000.00 $33,000.00 Under this scenario, the City of Dubuque would provide $77,000 to meet the short-term cash flow needs and FY19 administrative gap of Operation New View. There will be an additional request for funding from Operation New View in FY20 that will be addressed through the upcoming budget process. In addition to the funding from municipalities, Operation New View is working with the lowa Community Action Agency Association and other partners to identify additional sources of future funding to continue to be able to provide services to those in need. Assistant City Manager Cori Burbach recommends City Council approval to fund Operation New View in the amount of$77,000. The funding will come from unbudgeted parking lease revenue from the Diamond Jo Casino. I concur with the recommendation and respectfully request Mayor and City Council approval. �� �� �� Mic ael C. Van Milligen � MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager 2 THE CTTY OF Dubuque �" ui���eNe�ary DUB E 'il��i;' Masterpiece on the Mississippi Z°°' Z°'Z 2013 2017 TO: Michael Van Milligen, City Manager FROM: Cori Burbach, Assistant City Manager DATE: January 3, 2019 RE: Recommendation to Fund Operation New View INTRODUCTION The purpose of this memorandum is to recommend funding for Operation New View in the amount of $77,000. BACKGROUND The City of Dubuque is one of four local governments that signed a 28E agreement to form Operation New View Community Action Agency in 1985. Operation New View (ON� serves a geographic area of Dubuque, Delaware and Jackson Counties; the three counties are the other signatories of the 28E agreement. ONV provides the Low- Income Heat Assistance Program (LIHEAP), a financial assistance program to prevent people who have fallen on hard economic times from losing their heat in the winter; weatherization assistance to improve homes of low-income people so less energy is wasted; Head Start educational services for pre-school children, and other important community services. The organization has helped tens of thousands of low-income people navigate difficult times and, until recently, been able to succeed financially. ONV distributed more than $5.8 million in federal and local funds in their three-county service area last year and served 13,275 individuals with limited incomes. Recently, the organization has experienced funding shortfalls and cash flow difficulties. These financial difficulties are in part due to several changes in staff leadership positions in recent years. All spent funds have been dedicated to providing service to at- risk individuals and families. The ONV Board of Directors recently hired John Wilson to serve as the Interim Executive Director. Wilson has 47 years' experience working in the National Community Action Network, and has assisted agencies across the nation as they transition leadership and address capacity issues, including three Community Action Agencies in lowa. The organization is also receiving training and technical assistance from the lowa Community Action Association and other organizations in the agency's service area to improve its immediate and long term financial capacity and position. DISCUSSION After an external audit and review from a peer team of executive directors and financial managers from other lowa community action agencies, it has been determined that ONV currently needs $120,000 to meet existing obligations to vendors and to meet payroll. In addition, the agency needs $100,000 in this fiscal year to fill the remaining administrative gap, for a total of$220,000 in FY19. If these needs are not met, dissolution of the agency could be a threat. After the last ONV Board of Director's meeting, Board Chair Steve Drahozal convened a meeting of representatives from the three counties and the City of Dubuque to discuss how they could collectively meet the $220,000 shortfall, as the agency's service to the area's most at-risk residents is extremely important. Several scenarios were considered to divide the financial burden. They included: 1) an even split between the four municipalities, with each paying 25°k of the total $220,000; 2) distribution of the burden based on the representation of the four municipalities on the ONV Board, as identified in the 28E agreement forming the organization. This representation is City of Dubuque — 11 .2°k, Dubuque County — 44.4°k, Delaware County — 22.2°k, and Jackson County — 22.2°k; 3) a split based on population of the four municipalities; or 4) a split based on estimated service ONV provides in each of the four municipalities. After discussion, the elected officials agreed that the best division of the burden would be a combination of options 3 and 4. This hybrid model would be as follows: Hybrid Proposal (Split between Option 3 Population & Option 4 Service Estimates City of Dbq Dbq Co Del Co (15°k) Jackson Co (15°k) 35°k 35°k FY2019 $77,000.00 $77,000.00 $33,000.00 $33,000.00 In addition to the funding from municipalities, ONV is working with the lowa Community Action Agency Association and other partners to identify additional sources of future funding to continue to be able to provide services to those in need. BUDGETIMPACT Under this scenario, the City of Dubuque would provide $77,000 to meet the short-term cash flow needs and FY19 administrative gap of ONV. This number is in addition to the already-budgeted Purchase of Service amount ($19,756) and Engine House payment ($25,000). There will be an additional request for funding from ONV in FY20 that will be addressed through the upcoming budget process. 2 Budget Director Jennifer Larson has identified a source of funding for the $77,000. The FY19 funding will come from unbudgeted parking lease revenue from Diamond Jo Casino. REQUESTED ACTION I respectfully request City Council approval to fund Operation New View in the amount of$77,000, in addition to the approved Purchase of Service and Engine House payments. Cc: Jennifer Larson, Budget Director Steve Drahozal, ONV Board Chair John Wilson, ONV Interim Executive Director 3 Operetion New View Financial Assistance Analysis Immediate Need: $120,000.00 before 2/1/18 Remaining Admin Gap in ONV FY19: $150,000.00 by 9/30/18 Impact to government organizations: Need in FY2019 $220,000.00 Need in FY2020 $200,000.00 Option 1.Even split,4 ways Ciry(25%J Dbq Co(25%J Del Co (25%J lackson Co(25%J FY2019 5 ss,000.o0 5 ss,000.o0 5 ss,000.o0 5 ss,000.00 Szzo,000.00 Fvzozo 5 so,000.o0 5 so,000.o0 5 so,000.o0 5 so,000.00 Szoo,000.00 Total Payment 5 ios,000.o0 5 ios,000.o0 5 ios,000.o0 5 ios,000.00 Option 2.Split according to 28E Agreement City(11.2%) Dbq Co(44.4%) Del Co(22.2%) Jackson Co(22.2%) FY2019 $ 24,640.00 $ 97,680.00 $ 48,840.00 $ 48,840.00 $220,000.00 Fvzozo 5 zz,aoo.00 5 ss,soo.00 5 aa,aoo.00 5 aa,aoo.00 Szoo,000.00 Total Payment $ 30,480.00 $ 186,480.00 $ 93,240.00 $ 93,240.00 Option 3.Split by population City (30%) Dbq Co(51%) Del Co(9%) Jackson Co(10%) FY2019 $66,000.0 $112,200.0 $19,800.0 $22,000.0 $220,000.00 Fvzozo 60 000.o Sioz,000.00 is 000.00 zo 000.o Szoo,000.00 Total Payment $126,000.0 $214,200.0 $37,800.0 $42,000.0 Population based on 2017 US Census estimate City of Dubuque 58276 30% Dubuque County 97041 51% DelawareCounty 17153 9% lackson County 19366 10% 191836 100% Option 4.Split by service estimate(based on conversation with John Wilson) City(40%) Dbq Co(30%) Del Co(15%) Jackson Co(15%) Povertyrate: Povertyrate: Povertyrate: 16.3% 9.8% 9.3% Poverty rate:11.7% FY2019 $88,000.0 $66,000.0 $33,000.0 $33,000.0 $220,000.00 FY2020 80 000.0 60 000.00 30 000.00 30 000.00 $200,000.00 Total Payment $168,000.0 $126,000.0 $63,000.0 $63,000.0 Option 5.Hybrid Proposal(Split between Option 3 Population&Option 4 Service Estimates) City(35%) Dbq Co(35%) Del Co(15%) Jackson Co(15%) Povertyrate: Povertyrate: Povertyrate: 16.3% 9.8% 9.3% Poverty rate:11.7% FY2019 $77,000.00 $77,000.00 $33,000.00 $33,000.00 $220,000.00 FY2020 70 000.00 70 000.00 30 000.00 30 000.00 $200,000.00 Total Payment $147,000.00 $147,000.00 $63,000.00 $63,000.00 *Fiscal years referenced are for municipalities and run luly 1-lune 30. ONV operates on a separate fiscal year, Oct 1-Sept 30.