Elgin finalizing loans for social service agencies
The city of Elgin expects to start accepting applications next month by mid-December or sooner for its emergency loan program to social service agencies.
The city has committed $775,000, including $150,000 to fund the Ride in Kane program. That would leave $625,000 for one-time loans designed to be a "short-term financial Band-Aid" for agencies whose ability to operate is in jeopardy due to the lack of state payments, senior management analyst Laura Valdez-Wilson said. The city council is expected to cast a final vote to approve the program Dec. 2.
The zero-interest loan would be available to organizations that have 501(c)3, or federal nonprofit status, and serve Elgin residents. The agencies would repay the city once the state adopts a budget and begins disbursing funds. If the agencies default on the loan, they'd have to pay 9 percent interest and any city costs if the matter goes to collections, Corporation Counsel Bill Cogley said.
A committee would review the applications and recommend how to disburse the funds; that would be reviewed by City Manager Sean Stegall - primarily from a financial perspective - before approval by the city council.
Councilman Toby Shaw said he wants to see a list of all the applicants, including those who were rejected, before disbursing the loans.
Councilman John Prigge said he endorses the loan idea but fears council members could pressure Stegall to pick certain agencies. "We're too close. We need to be out of it," he said.
Stegall said the city council could amend Elgin's procurement ordinance to exempt the loan program from council approval. However, Stegall also said he doesn't think he'd be subject to pressure, and "you can't make the wrong decision because whoever you pick is needy."
Councilman Rich Dunne said the review committee should not include social service agencies' board members. The committee will include Valdez-Wison, Elgin senior planner Sarosh Saher and United Way of Elgin President Lynne Bosley, and possibly two more members, Valdez-Wilson said. United Way receives no state funding so there would be no conflict of interest, she explained.
City officials initially considered having United Way manage the loan program, then decided to do that internally. Bosley agreed it should be managed by the city. "The more we started digging into it, the more it made sense," she said.
Elgin is planning to fund the loan program from reserves, but it's also planning to use some - or all - of an equivalent $775,000 in yearly Community Block Development Grant money to fund city projects, Mayor David Kaptain said. In the past, the city typically awarded to social service agencies the federal grant money, designed to improve living conditions in low- and moderate -income areas.
The vast majority of block grant funds have been used by the agencies for capital projects, which should take a back seat to funding operations in the current crisis, Mayor David Kaptain said. Also, the city's project - such as making public facilities compliant with the Americans with Disabilities Act - would benefit all residents, he said.
Some agencies, however, traditionally use block grant money for rent, such as PADS of Elgin homeless shelter.
PADS Executive Director Dennis Hewitt said he's not planning to apply for an emergency loan from the city because the agency is doing OK despite the lack of state funding. Also, it's crucial for his clients to continue receiving substance abuse and other mental health services from agencies that really need help right now, he said.
But not getting state money and block grant funds in 2016 would be worrisome, Hewitt said. "Put the two together and after a year, it will be difficult."
While deciding how to disburse the emergency loan likely won't be an easy task, the city's initiative is "fabulous," Bosley said.
"I think it's very forward-thinking of the city to be concerned that these critical health and human services need to continue regardless of what happens in Springfield."