Lincoln City Council: Aldermen discuss use of ARPA funds to support Balloons Over 66 weekend

 

[January 27, 2022] 

Utilization of funding from the American Recovery Plan Act to help support the Balloons Over 66 weekend in Lincoln was the first topic on the Tuesday night Committee of the Whole meeting of the Lincoln City Council.

With all eight members of the council present, a proposal to give the three components of the annual August event a total of $40,000 per year for the next three years was met with no opposition from aldermen. The question will be placed on the Monday, February 7th voting agenda for final approval.

Discussion on the topic began with Mayor Tracy Welch offering an overview of the ARPA program and how it is impacting the city of Lincoln.

The American Recovery Plan Act (ARPA) was signed into law on March 21, 2021 by President Joe Biden. Illinois Governor JB Pritzker then activated the plan for the state of Illinois soon thereafter. The federal ARPA funding was designated with the intent of providing recovery funds to state, local, and tribal government units in response to the impact of Covid 19 on the financial wellbeing of those units and business entities within those jurisdictions.

Welch said that there were four primary categories for which the funds can be used. In addition, there are provisions within the law that permit requests of funding for projects outside the categories, though those requests are not as easily approved as the requests within the categories.

The four primary categories are:

1.) To respond to a public health emergency, negative economic impacts, for aid to impacted industries such as tourism, travel and hospitality.
 

2.) To respond to workers performing essential work during the covid 19 public health emergency by providing premium pay to eligible workers,

3.) For the provision of government services to the extent of a reduction in revenue due to the covid 19 public health emergency relative to revenues collected in the first full fiscal year prior to the emergency.

4.) And, to make necessary investments in water, sewer, and broadband infrastructure.

Welch said that to regulate the eligibility for the funding, the plan established what they are calling NEU’s or non-entitled units. NEU’s are defined as a “city, town or village serving a population of less than 50,000.” In the state of Illinois, he said there are 1,250 such units.

Welch said that Illinois has received $742,000,000 for distribution to the eligible NEU’s. He explained that all the NEU’s were eligible, but the funding had to be requested. He also noted that not all the Illinois NEU’s had asked for the money.

With the requests granted, funding to the NEU’s are divided into two annual payments. The city’s allotment will total $1,840,408.41. The city has already received its first payment in the amount of $920,204.40.

Welch said that the money has been placed in a separate bank account by the city. He said doing so would allow increased transparency in its use, greater accountability of the funds and ease of audit. He added that to date no ARPA funds have been spent by the city.

City Treasurer Chuck Conzo reminded the council that while none of the money has been spent, the council did write in use of ARPA funds for city purposes in the annual budget and appropriations documents.

Welch went on to explain the request that he was putting before the city. He said that the original thought had been to utilize the money for the balloon component only of the Balloons Over 66 weekend. However, after having discussions with Kevin Bateman who is involved with the barbecue side of the weekend, and Michelle Bauer who is involved with the craft beer side, he could see that all three components needed financial assistance to keep the weekend going.

Both the barbecue and craft beer components are attached to official organizations, but the balloon side is managed by an individual, Seth Goodman.
 

To disburse the money directly to the barbecue and craft beer sides is simply done because they have organizations with a treasury. It was a little more difficult to give funding to the balloon side. Therefore, the Logan County Tourism Bureau Board of Directors was approached by Welch to ask if the LCTB would be willing to act as funding administrator on Goodman’s behalf. The board had discussed this at length with many questions as to how the bureau would interact with the balloon event, and how the money would be maintained in a transparent and accountable manner.

It was determined that the board would allow the LCTB to be the fund administrator. Welch said that just as the city is keeping the ARPA funds in a separate account, the three entities involved will also do so.

While the balloon side of the event has expenses that have been paid by Goodman and a small number of sponsors, the barbecue and craft beer sides are fully sponsored by local businesses. Welch said that the past two years have put a strain on all our local businesses, so providing money to all three components of the event will ease the burden on the sponsors without taking anything away from the event.

Welch said he is proposing that the city designate $40,000 per year for three years to the weekend event.

Distribution would be $15,000 to the LCTB for the balloon event, $15,000 to the Up in Smoke committee for the barbecue and $10,000 to the Young Professionals for the craft beer.

Welch said that after the three years, the funding would stop.

Rick Hoefle was the first to speak when Welch was finished. He said that he was fully behind this request from the mayor.

He went on to say that it was very good that the city could help support such an important weekend without dipping into its general fund. He said using the ARPA funding to help the three groups was an ideal situation.

Hoefle went on to add that it was the people of the community, the groups involved, Goodman, and the local sponsors who picked up the ball and brought the weekend back after it fell apart with the loss of the local Chamber of Commerce.
 

Steve Parrott asked what would happen if the covid emergency rose up again and communities were forced to not hold public activities for a year. Would the city keep the money or give it to the three groups anyway for future use. Welch said he thought that if something like that happened, the city would have to discuss it and let the council make the final determination on what to do.

Parrott also said he would like to see each of the entities provide an annual audit document to the city for the ARPA funding.

Bateman spoke on behalf of the barbecue group saying that the group has an accountant and a two-signature policy for checks. He said they learned from the missteps of the event predecessors and have established a system that is very transparent, accountable, and utilizes only funds on hand, with no “robbing Peter to pay Paul.” Therefore, he felt that the group could easily provide audits for the ARPA funds.

He went on to say that in 2020, there was no barbecue event. In 2021 the barbecue and other activities returned to the same weekend as the balloons and did so with great success. He said that the barbecue had been scaled back due to available funds and he would like to see it re-grow. Therefore, even with the help from the ARPA, fundraising to support the barbecue will continue as usual.

Bateman went on to say that the real benefit of the ARPA funding would be to the businesses that have in the past offered sponsorship. He noted that all those businesses want to continue their sponsorships, but they are struggling too. While they may pledge for the coming years, they may not be able to give as they have in the past. Knowing that the weekend has extra funding is going to be very helpful for everyone.

Michelle Bauer was not present for the meeting, but the consensus between Welch and Bateman was that the craft beer group would also be able to provide accountability and an annual audit of the ARPA funds.

The tourism bureau is accustomed to working with transparency and accountability and can also provide annual audits.

Welch told the council that in addition to the barbecue, the money designated to that group would go toward the Dock Dogs event also. He said the committee would not be requesting additional funding from the city for Dock Dogs this year, if the ARPA money is approved.
 

Tony Zurkammer asked if the full $120,000 would be distributed at one time, or would the city do three distributions of $40,000 per year. Welch said that the council would approve the three year distribution, but payments would be made annually.

Wanda Lee Rohlfs asked if the three entities could provide annual budgets ahead of the event. It was noted that Bauer and Bateman could do that easily.

Seth Goodman was in the galley and said that he can give an approximation. He said the issue for setting down a concrete budget would be not knowing for sure how many balloons will arrive for the event. He added that a lot of the money spent is directly related to the balloons, motel stays for pilots, propane for balloons and the like.

He added that under the current conditions of the weekend, with the lift off locations and the glow location, he has to cap the event out at 30 to 35 balloons.

Goodman said one area where he has been unable to accommodate the balloonists is in the traditional “show up gifts” and/or competition prizes. He said the majority of the events held for balloons include first a very nice gift bag for each pilot, and secondly a competition with prizes given. Balloonist like these two components and are more likely to come to an event that offers them.

Rohlfs commented that the reason she wanted to see budgets and accounts was to help her get a visual of what will happen when the funding is gone and what the three entities will need to keep going beyond the next three years.

During the course of the conversations it was also mentioned that the art show will be back in 2022 and there is also a new activity being planned that will be a kids fun day event in one of the county-owned parks in the downtown area.

It was also mentioned that there is a need for a central location where information about all three components of the event can be obtained. Bauer had wondered if that could be established. Welch said that perhaps the LCTB could help with that as well.
 

[It should be noted that the LCTB has been the information station for the event in years past. In 2020 and 2021 the LCTB had to limit its activities due to the reduction in tourism tax revenue. The LCTB is also in recovery mode, and is cautiously taking steps to return to its normal practices of supporting local tourism events.]

Generally speaking, the aldermen who participated in the conversation appeared to be highly supportive of the request from Welch, and those who did not speak also offered up no objections.

Because January is a five Monday month, there will be no council meeting on January 31st. The next voting session of the council will be Monday, February 7th. The question for ARPA funding for the Balloons Over 66 weekend is expected to be on that voting agenda.

[Nila Smith]