COLCHESTER — Town officials are divided on whether to use $300,000 of federal coronavirus relief funding to pay for a direct “give back program” for town residents or to give the money to the town’s social services to direct it toward people in need.
In July, Selectman Jason LaChapelle proposed a program that would allow Colchester residents to apply for up to $1,000 per household if they were negatively affected by the pandemic. According to LaChapelle, the money would go to as many households as applied for the funds and be divided evenly, with the amount each person receives depending on the total number of people who applied.
LaChapelle said he wanted this program to provide relief not only to low-income residents, but to the middle class as well. He said he felt that even a limited, one-time payment would mean a great deal to households trying to put food on the table.
“This idea that $1,000 isn’t going to help a family in need I think is … coming from a really privileged position. $1,000 to a family struggling is a massive amount of money,” said LaChapelle.
But other town officials disagreed with the idea of a direct give-back program, saying the funds should be more targeted toward low-income families, or used for town projects.
LaChapelle’s proposal would require using $100,000 in ARPA funds earmarked for Colchester social services, and add an additional $200,000 that would be taken from other projects. LaChapelle said he believed that the unassigned fund balance or the capital reserve could be used to make up for funds that were designated toward fixing the town hall roof or the HVAC system.
First Selectman Andreas Bisbikos said he would support a program giving cash to the middle class. And during an Aug. 14 meeting, he said that with the town’s decision to use the money under the category of “revenue loss,” the Colchester had a “tremendous amount of discretion” on how the program could work.
“We could technically give money to every household in the Town of Colchester if that’s the program that we wanted to move forward on,” said Bisbikos.
Bisbikos said that if the committee were to make any family who made $75,000 or less eligible for funding, they could reach up to 40 percent of Colchester households. He said that anyone in Colchester who made under the median income would be immediately considered to have been negatively impacted by COVID.
At a meeting on July 31, the Board of Selectmen voted to task the ARPA committee, UHY and Social Services to create a “give-back program” to distribute up to $300,000.
LaChapelle said during the July 31 meeting that he did not believe it was fair to expect town residents to show proof of financial harm from the pandemic when businesses received grants through the federal funding without having to offer similar proof.
“It seems like if it was okay for businesses, the way we handled it for businesses, the same exact thing should be fine for the citizens,” said LaChapelle.
But Claire Collins, a consulting senior manager for the accounting firm UHY, which the town has contracted to oversee distribution of the ARPA funds, said the federal guidelines for the funds required people to show proof of hardship, including information regarding taxes and unemployment. She said that UHY had checked business’ financial records “behind the scenes,” which wasn’t possible with individuals.
Collins also said she believed that lump sums that people received through the program would be subject to taxation, and that it could push people into a higher tax bracket, threatening their eligibility for benefits.
She also warned that a direct cash program would restrict how people could spend the money. According to the ARPA guidelines, families would not be able to use the money on food, groceries, clothing, gasoline, loan payments or entertainment. If a person spent money on things that weren’t allowed, that family would have to pay the money back to the federal government.
The money from a direct cash program could be used for medical bills, utility bills, childcare, rent or mortgage payments.
David Koji, chair of the town’s ARPA Committee, said that a direct-assistance program would also mean that the town would have to pay $30,000 to UHY to administer the program.
The other proposal, to allow social services to take charge of the $300,000 and distribute the money, also brought up challenges.
Valerie Geato, the town’s director of social services, said she wasn’t sure if she would be able to spend $300,000 by the 2026 deadline.
Geato said at a meeting on Aug. 14 that additional funding might be used by local social services to support local residents with home improvements required for medical conditions, and car repairs. But she also warned that the department would need a system to pay for these things, and she said that there would need to be clear guidelines regarding who would qualify for assistance.
In the meeting on Aug. 14, Selectwoman Rosemary Coyle and Debbie Bates said they believed Social Services could reach people outside the income guidelines of $75,000. She said that Social Services had helped households making up to $82,000.
“We have a mechanism for screening, we have a mechanism for paying for it, there’s no tax burden … Why would we not want to expand that?” said Coyle. “I want this program to support as many people as we can that find themselves in a difficulty under different circumstances, plus the people that normally need the assistance of social services.”
But LaChapelle cautioned that residents might be reluctant to come to social services for help.
“We can make $5 million available. That money will sit there forever because people aren’t’ going into social services to ask for help because they don’t want to ask for help,” he said.
At a meeting of the ARPA committee on Monday, questions also arose over the necessity of setting aside $300,000. According to a PowerPoint presentation to a meeting of the ARPA committee on Monday, town social services expect to receive a $36,000 grant each year “for the foreseeable future,” but had spent just $7,000 over the past three years on assistance other than funding the food bank and fuel assistance.
“There is no indication that future social service demand would necessitate additional funding outside of current balance and future revenue streams(s),” the presentation noted.
Koji said that the committee could also recommend the town stick with the original allocation of $100,000 for social services and leave the additional $200,000 to the projects it was originally encumbered for.
“We don’t have to scramble to find something,” said Koji.
Geato said she was willing to look at the possibility of using a lump sum to help people with rental assistance, but that giving out funds to people simply based on their income levels was outside the scope of social services.
“The way that we could utilize these funds would be through our normal processes, which is not giving people money because they fall into a certain income category. No part of what we do really operates that way,” said Geato. “That’s not really the nature of social services. We exist to help people meet their basic needs.”
The ARPA Committee will meet next Monday to determine what program recommendation they will make to the Board of Selectmen.