Community Engagement Strategies for
Equitable Deployment of American Rescue Plan FundS


The federal response to COVID-19 has proven that public investments can play an important role in minimizing the economic and public health harms of a global pandemic and downturn. 

The Center on Budget & Policy Priorities has documented the anti-poverty and protective forces of several supports that were delivered to individuals and families alongside investments that were made in public institutions and communities during the COVID-19 pandemic.[1] Many of these supports delivered powerful anti-racist outcomes — the expansion of the Child Tax Credit, for example, narrowed the Black/white and Latinx/white poverty gaps by an estimate of more than 40 percent.[2]

The American Rescue Plan (ARP), which passed in March 2021, had additional funding streams that could further the goals of building more resilient communities by dismantling barriers to opportunity for those who historically have been excluded. ARP funds could also build resilience by providing targeted support to the individuals and neighborhoods that have been hardest hit by the pandemic. One such funding stream includes the Fiscal Recovery Funds, which were an unprecedented move by the federal government to shore up the capacity for state and local governments to respond to needs on the ground across the nation.

The ARP’s State and Local Fiscal Recovery Funds are just beginning to be deployed by states and local communities.[3] These federal funds have the potential to drive more equitable outcomes if decision-makers prioritize community engagement and emphasize the lessons gathered from community input.  

Why community engagement?
The ARP legislation and its associated rules have made clear that the intent is for government leaders to engage the community in decisions around allocating funds. The U.S. Treasury specifically provided governments with this guidance: “to engage their constituents and communities in developing plans to use these payments.”[4]

For communities with populations more than 250,000, the reporting requirements include questions regarding the level of engagement. “… Describe how your jurisdiction’s planned or current use of funds incorporates written, oral, and other forms of input that capture diverse feedback from constituents, community-based organizations, and the communities themselves. Where relevant, this description must include how funds will build the capacity of community organizations to serve people with significant barriers to services, including people of color, people with low incomes, limited English-proficient populations, and other traditionally underserved groups.”[5]

Local governments and other leaders who are responsible for disbursing funds must prioritize robust and inclusive community engagement. This is an unprecedented scale and flexibility of ARP funding, and the challenges presented by the pandemic’s disparate health and economic impacts — coupled with systemic underinvestment and exclusion from investment — are best solved by including diverse perspectives.

The evidence is clear that community engagement leads to better outcomes, more efficient and effective investments, and broader public support for the solution over time.[6]

How to engage the community in the American Rescue Plan?
There are several ways to engage the community in allocating ARP funds, both from within and outside local government. From either perspective, it is important to be clear upfront about whether this engagement is intended to inform, involve, or collaborate and how the input provided will be used to develop or decide on solutions.

The approach to engagement will vary depending on the capacity and tools of the community and other factors. However, equity should be a cornerstone of engagement. Local governments and advocates can gain important insights on the issues and the necessary features of successful investment by seeking out the groups who historically have not been included in decisions but who have been impacted the most by the pandemic.

The American Rescue Plan Final Rule provides guidance for engagements based on income, demographics, and the disproportionate harm of the pandemic. Ensuring that your engagement strategy reaches into the hardest-hit communities can be supported by data on Qualified Census Tracts (QCTs), a key neighborhood measure of need in the ARP rules.

Trusted institutions with relationships in the hardest-hit communities can provide an important connection to bring more people into the process. Engaging with these institutions to conduct information gathering and sharing and to co-develop plans for advancing investment proposals is an effective strategy used by communities across the state and nation.

Community Engagement Tools
  • A Model Resolution like the one developed by the Southern Economic Advancement Project can set clear expectations for decision-making regarding the funds.
  • Online surveys of residents like those developed by the City of Durham can provide opportunities for people to share their priorities and identify needs in their communities.
  • Simulators like those developed in the City of Greensboro provide an opportunity for residents to allocate funds to their priorities and to experience the decision-making process in real time with visual aids. Residents can also submit allocations to decision-makers to help inform the process.
  • Public hearings like those conducted in the City of Fayetteville are another tool used to gather community input. These hearings could be hosted by local governments, in collaboration with community organizations, or connected to regular community meetings.
The process of community engagement doesn’t stop with gathering information. Local governments and advocates must continue to share information and communicate how they will use community input in their decision-making. Communities can also provide important information as investments flow about the impact and outcomes resulting from these programs and services.

Community engagement in allocation decisions
Local communities have until December 2024 to allocate Local Fiscal Recovery Funds and until December 2026 to spend the dollars. However, early models are emerging for ways that local governments and communities are pushing community priorities to the forefront of funding decisions in North Carolina and across the nation. Here are some notable examples:  

North Carolina
  • Both the City of Durham and Buncombe County used Requests for Proposal processes to gather ideas from organizations and agencies in the community about how to allocate funds. The guideline for the Buncombe County process can be found here. Request for Proposal processes are often used for a subset of total resources and are best designed with clear criteria, alignment to community-defined goals, and support for organizations or institutions that may not previously have participated in a government contract process.
  • A notable shift in approach took place in Pitt County when the Board of Commissioners paused funding decisions to seek community input after objections from the community. In this case, the efforts of local advocates who showed up to meetings and talked about the range of needs in their communities was an effective way to seek public input before the county commissioners decided how to use funds.[7]

National
  • Charleston, West Virginia, established an advisory council of residents who are charged with making recommendations regarding the allocation of funds to priorities. [8] 
  • New Orleans, Louisiana, adopted a model resolution on the community engagement process and established a stimulus task force charged with deciding the allocation of funds.[9]
  • Lexington, Kentucky, created a clear framework for priorities to be funded with ARP dollars and encouraged full participation from the community through language access at meetings and with materials. In addition, the city has communicated back to community members with quarterly reports and an accessible dashboard on funding decisions.[10]
  • In Gainesville, Florida, leaders use the goals from their racial equity plan to guide decisions around ARP allocations. City leaders can build from the foundation of engagement that was created in developing this framework and connect the dots to previously identified systemic investments.[11]

Early lessons learned
  • Leveraging existing community input processes or community-driven recommendations is proving to be an efficient way to get more people engaged in the process and to follow the evidence around previously identified needs and solutions. This engagement could include using a Health Equity Assessment to drive ARP recommendations for a stronger network of healthy food options in high-need census tracts or building ARP input sessions into regularly scheduled neighborhood council meetings.
  • Transparency in the process can include more people. By being clear about the decision-making process, communities can ensure that people feel informed and empowered to engage in the policy process. Beyond posting on local government websites, providing information in venues that people are most likely to frequent can ensure that the information reaches more community members.
  • Language access is critical to ensuring community input. Some communities have recognized that they must address language barriers to truly pursue community input. Translating materials about the ARP opportunity and having interpretation services available at public hearings and meetings can reduce the barriers to entry for communities that have experienced disproportionate harm from the pandemic.
  • Proposal processes that allow cities or counties to solicit proposals for specific projects can provide new ideas and solutions. Proposal design should ensure that the process allows for small organizations to be included, provides transparency about the criteria used to evaluate successful proposals, and ensures that reporting and compliance are supported with assistance from local governments.

Additional resources & tools
Sources
[1] https://www.cbpp.org/research/poverty-and-inequality/robust-covid-relief-achieved-historic-gains-against-poverty-and
[2] https://www.cbpp.org/research/federal-tax/build-back-betters-child-tax-credit-changes-would-protect-millions-from
[3] https://www.cbpp.org/research/state-budget-and-tax/resource-lists/fiscal-recovery-funds-in-the-american-rescue-plan and https://theseap.org/wp-content/uploads/2022/02/ARP-Toolkit_Spending-Tracker_NC-Report.pdf
[4] Federal Register :: Coronavirus State and Local Fiscal Recovery Funds
[5] https://home.treasury.gov/system/files/136/SLFRF-Compliance-and-Reporting-Guidance.pdf
[6] https://medium.com/changelab-solutions/equitable-community-engagement-34d2542f68fd
[7] https://www.witn.com/2022/02/21/pitt-county-commissioners-decide-american-rescue-plan-act-funding-plans/ and https://www.publicradioeast.org/pre-news/2021-11-09/pitt-county-seeks-public-input-on-spending-millions-in-covid-19-relief-funding
[8] https://www.wvgazettemail.com/news/kanawha_valley/charlestons-american-rescue-plan-panel-finalizes-recommendations/article_bfe6ff4c-551a-525e-b091-c44cca2c9af4.html
[9] https://www.nola.com/news/coronavirus/article_9388c410-9e1f-11eb-851b-13b9a30bb486.html and How will $375M in coronavirus aid get spent in New Orleans? This stimulus task force will decide | Coronavirus | nola.com
[10] American Rescue Plan Act (ARPA) | City of Lexington (lexingtonky.gov)
[11] https://www.gainesville.com/story/news/local/2020/07/23/city-sets-racial-equity-plan-goals/42049927/ and https://www.cityofgainesville.org/CityCommission/CommunityInterests/AmericanRescuePlanActFunds.aspx

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municipal models for assisting historically underutilized businesses

Overview

Historically Underutilized Businesses (HUBs) play a critical role in North Carolina’s local economies. While small-business supports have been front and center in the response to COVID-19, HUBs are most at risk of significant economic losses — or permanent closure — and have faced barriers in accessing state and federal relief (see Sidebar). The good news is that before the pandemic, North Carolina’s local governments already were developing models to support HUBs in their communities and breaking down the barriers that prevent these businesses from getting established and expanding.  

increasing access to capital

For 15-plus years, the City of Charlotte has partnered with Bank of America, Wells Fargo, and others to contribute funds to the Charlotte Community Capital Fund (CCCF). Self-Help Credit Union administers the fund and serves as a third-party lender together with the Carolina Small Business Development Fund (CSBDF). CCCF guarantees up to 85 percent of a loan amount, reducing the collateral that HUBs need to access capital. 

Providing technical assistance 

The City of Winston-Salem created an Office of Business Inclusion and Advancement in 2016. The office provides technical assistance, certification support, and access to contracting opportunities for businesses owned by people of color and women.

Within the last year, the City of Durham established an Equity and Inclusion Department to provide technical assistance to and increase contracting with Underutilized Business Enterprises (UBEs). This department also will assess racial equity and inclusion efforts throughout city government.

​Expanding markets and contracts 

The City of Asheville’s Business Inclusion Office works to ensure that businesses owned by people of color have the certification and information they need to compete for city contracts. 

​Without an explicit focus on ensuring equitable access to capital and small-business supports, policies intended to help could worsen preexisting inequities for HUBs in particular. North Carolina’s local communities should consider developing model programs and policies that explicitly seek to engage with businesses owned by people of color and to support their recovery from this economic crisis. Many communities already have begun this work in their COVID-19 response (see lists below). 

​Municipal small-business supports during COVID-19

NORTH CAROLINA MODELS

Recovery Task Force
  • In Charlotte, the mayor and City Council will assemble a Community Recovery Task Force to support and assist families and businesses as they plan for the future. The task force will focus on challenges in the areas of small business, housing, and the airport.

Loan and Grant Funds
  • The Buncombe County Tourism Jobs Recovery Fund, authorized by the NC General Assembly and administered by Mountain BizWorks, was created by the Buncombe County Tourism Development Authority with $5 million in occupancy-tax revenue dedicated to tourism product development.
  • Durham established a Small Business Recovery Fund, with $1 million each from the city, Durham County and Duke University. Home businesses, food trucks, and independent contractors are all eligible. The fund is administered by the CSBDF. 
  • Orange County’s Emergency Small Business Funding Program provides grants up to $5,000 per business. The Board of County Commissioners approved $300,000 for the first round of funding — which also included loans — and $410,000 for the second round of funding.
  • The City of Raleigh established a fund to provide grants up to $10,000 to local, independently owned small businesses. CSBDF administered the program.

NATIONAL MODELS
  • Tampa, FL — One Tampa: Relief Now, Rise Together helps residents and small businesses with rent, mortgages, and utilities.
  • Minneapolis, MN — City Council has dedicated more than $5 million for Minneapolis residents and businesses that have been hit hardest (includes immigrant and mixed status families).
  • Austin, TX — City Council approved allocating $15 million from the Emergency Reserve Fund to establish the City’s Relief in a State of Emergency Fund for Austin residents (includes immigrant and mixed status families). 
  • Hayward, CA — The Community Relief Fund directs charitable donations to residents and businesses. The focus will be on those experiencing a loss of earnings without paid sick leave or access to unemployment benefits.
  • Chattanooga, TN — Created a resource support and stabilization fund for small business owners and displaced workers. 
  • Newark, NJ — Created a program to help commercial property owners and their tenants remain solvent and avoid evictions or foreclosures.

​Considerations for equitable program design

  • Prioritize those who are most in need. Several NC funds require applicants to have seen at least a 25 percent decline in revenues due to COVID-19. Orange County gives preference to businesses that have not been able to access funds elsewhere.
  • Partner with CDFIs (Community Development Financial Institution) that have an established relationship with communities of color, instead of relying on relationships with traditional lenders. (Source)
  • Consider a mix of loans and grants. Loan programs face fewer legal hurdles in North Carolina and may be implemented on a shorter timeline. Grants may be more widely accessible to those who don’t qualify for loans and may supplement a loan program if private funds are available. (Source)
  • Ensure equity in the application process. In Durham, the CSBDF will market the program, provide technical assistance with applications, and select recipients randomly rather than a first-come, first-served basis.

​Design flaws can prevent aid 
from flowing to businesses 
that are most in need

The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) expanded access to small-business loans through the SBA (Small Business Administration) and the Paycheck Protection Program. Design flaws prevented HUBs from accessing and benefiting from these supports.

• Loans depended on businesses having preexisting relationships with financial institutions, which prevented underbanked Black- and immigrant-owned businesses from accessing urgently needed funds.

• Loans were made on a first-come, first-served basis. Many financial institutions put wealthier business customers at the front of the line, which diverted funds from the smaller local shops that are hit hardest by reduced consumer demand.

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Municipal models for assisting HUBs
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more resources and models

  • https://nextcity.org/daily/entry/leveling-the-playing-field-in-city-contracting
  • https://www.governing.com/cityaccelerator/blog/cities-purchase-power-people-color-minorities-lc.html
  • https://www.governing.com/cityaccelerator/blog/How-Can-Cities-Boost-Minority-Owned-Businesses-By-Buying-from-Minority-Owned-Businesses.html
  • https://www.entrepreneur.com/article/345149

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REntal assistance is especially necessary during a public health crisis

Overview

Even before the COVID-19 pandemic, North Carolina was experiencing a housing affordability crisis. Due to years of underinvestment in public housing, exclusionary zoning codes, and stagnant wages that have not kept up with the cost of living, nearly half of all renters in our state were considered cost-burdened in 2018, which means they paid more than 30 percent of their income to housing costs. The precariousness of this situation leaves families on the edge of homelessness. In 2016, North Carolina’s statewide eviction rate of 4.61 percent was 2.27 percentage points above the national average. Of the top 25 cities with the highest eviction rates nationwide, five were in North Carolina.

The pandemic has made it clearer than ever that housing and health are inextricably tied. During a time when North Carolinians need to limit their movement and stay home to reduce the spread of the virus, families find themselves on the edge of eviction. One in five renters statewide is behind on their rent, and a statewide moratorium on evictions expired on June 20, 2020.  

​As the state works to stabilize communities and move toward recovery, policymakers can learn from ongoing efforts to provide affordable housing in local communities throughout the state.

Eviction diversion programs

  • The Durham Eviction Diversion Program is a partnership between Duke University, Legal Aid of North Carolina, and city and county governments. The program provides individuals who are facing eviction with free advice and support, ranging from emergency financial aid to legal counsel. Evictions have been avoided in approximately 80 percent of cases. 

Bonds to expand and preserve affordable housing supply

​Zoning policy changes

  • In Charlotte, the Housing Charlotte framework lays out strategies for promoting mixed-income developments, which include updating the zoning-density bonus programs and encouraging the inclusion of mixed-income housing through the rezoning process.  
  • In Durham, the Expanding Housing Choices plan aims to incrementally increase affordable housing by allowing additional and more varied housing, including duplexes and accessory dwelling units, in neighborhoods near downtown.
In the context of the COVID-19 pandemic, cities across the nation have established rental assistance funds and implemented policies to keep families housed and healthy during this crisis. Direct financial assistance to families — and especially to those who are excluded from federal aid — will be important to minimize lasting harm from the pandemic. 

Housing assistance actions related to COVID-19

  • Atlanta, GA: Residents who live in units owned or subsidized by Atlanta Housing and who have lost income as a result of the coronavirus pandemic are eligible for an assistance program. The city also approved legislation allocating $22 million in CARES Act funds to grant programs preventing evictions and homelessness. 
  • Austin, TX: City Council increased its funding for rental assistance from $1.2 million to almost $24 million (includes immigrant and mixed-status families). 
  • Charlotte, NC: City Council approved $8 million in CARES Act funds for mortgage and rental assistance.  
  • Chattanooga, TN: The City of Chattanooga’s COVID-19 Emergency Rent and Utility Assistance Program created a support and stabilization fund for small-business owners and displaced workers. 
  • Clearwater, FL: The City of Clearwater created a rental, mortgage, and utility assistance program to support households impacted by COVID-19. The one-time assistance helps households for up to three months with utility, rental, and mortgage payments. 
  • Fayetteville, NC: Fayetteville is leveraging Community Development Block Grant funds from the CARES Act for emergency housing assistance. Qualified low- and moderate-income citizens may be eligible to receive up to $2,000 toward rent, utilities, or mortgage payments.
  • Greensboro, NC: United Way of Greater Greensboro and City of Greensboro Virus Relief Task Force announced that $457,356 had been awarded to 16 local nonprofits (including five housing organizations) to help people impacted by COVID-19.
  • Hayward, CA: A community relief fund was formed to receive and direct charitable donations to sustain and protect local residents and businesses during the COVID-19 health emergency; the focus is on those experiencing loss of earnings without paid sick leave or access to unemployment benefits.
  • Knoxville, TN: Using $1.55 million in CARES Act funds, Knoxville created a housing assistance program to help nearly 570 renter households and 140 homeowners.
  • Minneapolis, MN: City Council and city leadership dedicated more than $5 million for Minneapolis residents and businesses that were hit hardest (includes immigrant and mixed-status families).
  • Pittsburgh, PA: Urban Redevelopment Authority of Pittsburgh established a Housing Stabilization Fund to provide short-term assistance to workers who have experienced a reduction in hours and are facing a financial hardship in paying rent and utilities.

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Rental assistance during a public health crisis
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