City of Alexandria, Virginia
________________
MEMORANDUM
DATE: DECEMBER 4, 2024
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER /s/
FROM: KATE GARVEY, DIRECTOR, DEPARTMENT OF COMMUNITY AND
HUMAN SERVICES
DOCKET TITLE:
TITLE
Consideration of the Release of the $550,000 from FY 2025 Contingent Reserves for the five-month extension of DCHS’ Alexandria Recurring Income for Success and Equity (ARISE) program.
BODY
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ISSUE: Consideration of the release of the $550,000 general fund dollars, appropriated by the City Council in the FY 2025 budget to bridge the completion of the ARISE program.
RECOMMENDATION: That City Council:
1. Approve the release of the $550,000 budget allocation to extend the ARISE guaranteed income payments to all participants for an additional five months through the end of FY 2025; and
2. Maintain the program’s infrastructure for the remainder of the fiscal year.
BACKGROUND: The ARISE guaranteed income program began in February of 2023. It was funded using $3 million of American Rescue Plan Act (ARPA) dollars to provide $500 cash payments to 170 eligible residents and to carry out rigorous research of the program. The research focuses on the impact of the $500 a month on the following areas: mental and physical well-being, housing, food and transportation stability, labor market participation, sense of hope in the community, and child outcomes in the households with children. Narrative change was another component and stated communication goal of the program. Expressly educating the community about why and how people experience poverty and the approaches, systems, and policies that improve equity and, economic stability and mobility.
The funding of the program was scheduled to end in February 2025. During the FY2025 Budget process, City Council approved $550,00 to be held in FY 2025 General Fund contingent reserves to allow for the program to continue through the entire fiscal year.
DISCUSSION: The additional allocation has allowed staff to develop best practice transition plan and support of current ARISE participants as the program comes to an end in June of 2025. Staff are learning from the experiences of other guaranteed income pilots around the country and getting input from ARISE participants to design a thoughtful transition process from the $500 per month. Transition input from participants involves two aspects: structure of payments during the five-month extension period and the supports that may be helpful during the months leading up to and after the final payment.
In terms of the payment structure during the final five months of the program, insights from other guaranteed income pilots across the country suggest that adjusting to the loss of monthly payments can be psychologically hard for participants. Based on this insight, each ARISE participant will determine for themselves which payment structures they would like to choose. Participants will receive the same total amount of money by the end of the five months ($2,500).
The first option is for participants to maintain the payments at the current rate of $500 per month as follows:
|
February 2025 |
March 2025 |
April 2025 |
May 2025 |
June 2025 |
TOTAL |
|
$500 |
$500 |
$500 |
$500 |
$500 |
$2,500 |
The second option is structured so that participants experience a $25 decrease each of the first four months of the five-month extension, to allow their budgets to adjust more slowly over time, with a larger payment in the final month to provide a greater cushion in the final month for the transition. That structure would look as follows:
|
February 2025March 2025April 2025May 2025June 2025TOTAL |
|
|
|
|
|
|
$475 |
$450 |
$425 |
$400 |
$750 |
$2,500 |
The overall proposed budget for $550,000 allocation:
|
Expenditure |
Explanation |
Cost |
|
Direct Costs, Payments to Participants |
170 participants to receive a total of $2500 |
$425,000 |
|
Fees, MoCaFi, Payment Platform |
4% of total funds disbursed |
$17,000 |
|
Operations |
Personnel and infrastructure |
$108,000 |
|
TOTAL |
$550,000 |
FISCAL IMPACT: There is $550,000 currently held in FY 2025 general fund contingent reserve for this purpose and therefore there will be no additional impact to the City’s operating budget. Authorization by the City Council will increase the DCHS general fund budget in the amount of $550,000.
ATTACHMENT: PowerPoint Presentation
STAFF:
Alethea Predeoux, Deputy City Manager
Lesa Gilbert, Director, DCHS Center for Economic Support