Iowa City City Council to allocate more American Rescue Plan Act funds to city nonprofits

After allocating American Rescue Plan Act funds to three programs before May, the City Council will start allocating money to assist Iowa City’s nonprofit organizations.


Gabby Drees

Executive director Mazahir Salih looks at a presentation at an Iowa City City Council meeting at City Hall in Iowa City on Tuesday, May 3, 2022.

Emily Delgado, News Reporter

The Iowa City City Council is deciding on allocating additional American Rescue Plan Act funds, directing city staff to find ways to use the federal grant to support local nonprofits.

The City Council discussed using the funds for nonprofits to aid residents negatively affected by COVID-19 financially, including the Center for Worker Justice of Eastern Iowa and Shelter House.

Currently, three projects are using the funds:

  • Direct payments to adults who were excluded from initial COVID-19 relief
  • Payments to Forest View Mobile Home Park residents for relocation.
  • Community Mobile Crisis and Food Bank

“I think there was a lot of discussion here with some  consensus that we do want to make sure that we have an application process that is open to the public. We want to be very transparent and communicative about this process,” Mayor Bruce Teague said at the council’s Tuesday work session.

Iowa City will allocate between $500,000 to $1.5 million from its American Rescue Plan Act funds to this program. Not including the funding of nonprofits, the city currently has $14.7 million in American Rescue Plan Act funds.

City Manager Geoff Fruin said the City Council will wait for staff reviews of the urgent needs category before making its decision on how to spend the funds with nonprofits.

“I would suggest that you allow us to come back with a look at this urgent needs category,  allow staff to give you a recommendation on a process,” Fruin said. “I’d recommend the lower end and the $500,000 because we’re already over on two of those other categories,”

The Forest View mobile home park relocation program received $1.2 million from the American Rescue Plan Act funds — close to going over the original budgeted amount for this program, which was $1.5 million.

The City Council also started discussions on other potential funding initiatives, including using the American Rescue Plan Act funds to prevent evictions in the city.

“We’re currently trying to work to create an eviction prevention proposal that would probably last two to three years,” Fruin said.

City staff estimates an eviction prevention program in 2022 would cost nearly $1 million. When the council initially planned to delegate the first half of American Rescue Plan Act funds in May 2021, an eviction prevention program would have cost between $1 to $2 million, in order to conserve American Rescue Plan Act funds.

“We’re probably looking at the lower end of that range closer to the $1 million as opposed to the $2 million, but from a staff standpoint and talking with some of the nonprofit housing providers, we do think eviction prevention, additional eviction prevention efforts will be necessary, despite the state’s commitments,” Fruin said.

The city is also looking to use American Rescue Plan Act funds for programs providing financial support to businesses owned by minorities, affordable housing initiatives, and public infrastructure.

The City Council discussed the possibility of using American Rescue Plan Act funds to support the Center for Worker Justice of Eastern Iowa’s efforts to address wage theft in Iowa.

The center sent a letter to the city council on April 18 asking it to allocate $17,000 annually.

The council gave direction to city staff to put together an agreement to help the Center for Worker Justice, but it is unclear if the council will use American Rescue Plan Act funds for the program.

Teague said the council will wait on staff recommendations before making a decision regarding the Center for Worker Justice’s letter.

“It does appear that this council wants to treat that as a separate kind of item, which is what I’m hearing,” he said. “I’ve seen a lot of nodding of heads to direct staff to move forward with the agreement on that, all right, so that’s great.”

Fruin said the council will vote on the next use of American Rescue Plan funds as soon as the city staff comes back with proposals.

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