Elgin leaders consider loan program for social service agencies

Elgin city officials are pushing an emergency loan program to help social services agencies in dire need of funding due to the state's budget crisis.

"The last two years I have said that the state of Illinois is going to fail social services in this community," Mayor Dave Kaptain told city council members at Wednesday night's committee of the whole meeting. "That day has come."

The city is considering allocating $775,000 for the program. The money would come from general fund revenues, said Laura Valdez-Wilson, the city's senior management analyst.

It would cost the city $30,000 to administer the program, with $750,000 being awarded to agencies based on need. Only agencies facing program or staffing cuts because state funding was withheld due to the budget impasse would be eligible to apply, she said.

Per the proposal, the city would award zero-interest loans that would have to be paid back when the state resumes owed payments to those agencies.

City officials propose partnering with United Way of Elgin to review grant applications. If approved by the city council, funds would be available to agencies in January, officials said.

"This loan program is kind of an experiment. We don't know exactly what's going to happen," Valdez-Wilson said.

The program stems from ideas presented at a human services summit held last month attended by about 200 nonprofits, government representatives and funders.

According to a United Way of Illinois survey of 544 social service agencies statewide, 34 percent of agencies reported being forced to make cuts to services in July. That number grew to 84 percent by October. Meanwhile, the state has a backlog of $8.5 billion in payments, Valdez-Wilson said.

Elgin agencies surveyed were owed more than $1.8 million collectively by the state, she added.

Many agencies will have to consider collaborations and efficiencies, and sharing human resources and volunteer management systems, she added.

In coming weeks, officials will discuss the city's role in dealing with this problem and whether there should be a community-based nonprofit advisory board.

City council members were receptive of the loan program idea as long as there is proper oversight. They suggested partnering with townships and the county for help funding it.

Councilwoman Tish Powell said the city needs to first establish the guidelines and criteria for who is eligible for funding, prioritizing agencies that provide critical services to low-income residents, such as child care, hunger, homelessness and mental health.

"It's not just a blank check that we'll be writing to these agencies," she said. "This is not just an Elgin problem. Our agencies may be housed in Elgin, but they serve people outside of our community. That's where the township and county help comes in. We should not bear the sole responsibility for providing those services."

Kaptain stressed the city needs to move on this quickly because these agencies need funding now.

"The goal is to have the funding available for them Jan. 1," he said. "We will come back and review it in six months. We have created a fundamental change in how we are going to fund not-for-profits in this community."