City auditor Teri Gage participated in last Tuesday's city council meeting by phone. Mayor Michael Giles requested her insight on how to donate funds to non-profits.
Several community members want to start a boys and girls club in Lovelock. They've asked the City of Lovelock for $100,000.
In 2021, the City of Lovelock received 1.7 million dollars in funds from the American Rescue Plan Act (ARPA).
Gage said there is now about $127,000 remaining. It must be allocated by Dec. 31, 2024, and spent by Dec. 31, 2026.
Gage supported the mayor's contention that the city can't give ARPA funds directly to a nonprofit. Her research showed four separate eligible use categories: support of COVID 19 public health and economic response, premium pay for essential workers, loss of revenue or investment in water, sewer, and broadband infrastructures.
"I don't believe the $100,000 for the boys and girls club would fall under any of these categories," Gage said. But, by her interpretation, the 'loss of revenue' category opened a door for funding the club.
Under 'lost revenue,' cities may use ARPA money to "pay themselves back" for government services impacted by Covid-19, she explained.
That frees up general fund money which can be used for the boys and girls club and other nonprofits.
Some community members brought up the US Treasury Department's Final Rule, effective April 1, 2022. They suggested that according to that guidance, funds can and have been given directly to the Truckee Meadows Boys and Girls Club by Washoe County, Ely, Fernley and other cities. The same holds true across the nation.
Gage said these cities most likely used 'the lost revenue' category. That way ARPA dollars don't go to the nonprofit. Instead, the city frees up money from the general fund so spending is not subject to the same restrictions.
A couple of weeks ago, after several requests, the city gave some community members a four-page handwritten list of where the City of Lovelock's ARPA funds have gone. It did not include a running balance or an indication of how much money was left.
By reviewing the last two years of city council minutes, business owner Corinne Nelsen found that only eight of the dozens of items on that list were voted on and approved by the council.
"I don't know why that's not more of a concern," she said at Tuesday's council meeting. "As an auditor, I'd be concerned about that." Youth advocate Lee Ann Gallagher remarked that out of millions of dollars not a penny went to help young people. Lovelock's kids struggle and too many succumb to life in the age of fentanyl.
Gage also recommended that the $100,000 be parsed out to the Club as needed instead of given in a lump sum. Councilperson Bonnie Skoglie disagreed.
"I'd like to quit stalling," she said. "If they need 100,000 all at once, that's what we ought to do. That's what we agreed to do."
Gallagher explained that the Boys and Girls Club needs two years of operating costs in the bank to open. With a two-year budget of $310,000, the City of Lovelock would pay for about a third of that sum. The recreation board will kick in another 100,000 pending approval by the county commissioners. The supporters have raised $107,000, including a $7,000 grant from the Nevada Resilience Project.
"They need seed money to get started, hire people and get up and running. The most important part of that is, once they're established, they qualify for millions in national funding. That's just a fact. Do your research. Look up boys and girls clubs. There's a ton of information out there," she added.
The Boys and Girls Club would like to start a before and after school program this fall for elementary and middle school kids, eventually expanding to a teen center. Space may be available at a modular building at the elementary school.
Garr also said there should be a resolution that if the Boys and Girls Club does not open, the $100,000 should revert to the city. Further, the club should furnish a full and transparent accounting of how they spend the money.
No handwritten lists without running balances.
The next step was an augmentation of the 2023-2024 budget to free up money from the general fund. The council scheduled a special meeting on Tuesday, July 25 at 5:30 p.m.
The supporters breathed a sigh of relief.
However, on Thursday, July 20, City Clerk Terri Wilcox sent a memo to the council members. It said she could not meet the requirements for the special meeting on July 25.
"We need to publish the notice of the augmentation in the paper and the meeting has to be at least three days after the publication. Then I will need to send proof of publication, the resolution authorizing augmentation, revenue schedules..., expenditure schedules..., to the Department of Taxation and wait for them to approve the augmentation."
Councilperson Bonnie Skoglie has retained the services of Sean Rowe of Mackedon deBraga & Rowe Law, PC to assist the council as it grapples with the ongoing issues. More than one councilmember has reported difficulty getting items on the agenda for discussion and possible action.
As the supporters left City Hall someone remarked, "By the time this is sorted out all the boys and girls will have grown up. We'll have to call it the Men and Women's Club."