Reroute of COVID-19 funds approved

Ocala City Councilmember Jim Hilty listens during an Ocala City Council meeting at City Hall. [Bruce Ackerman/Ocala Gazette file photo]

The city of Ocala is making changes to how it plans to use certain federal funds it received to help with COVID-19 relief. On May 20, City Council members approved a substantial amendment to the Community Development Block Grant, rerouting $200,000 in COVID-19 relief funds from microenterprise support to a new rental assistance strategy. The strategy is aimed at addressing pressing housing needs.

The funds, part of a $422,871 allocation to Ocala through the CARES Act by the U.S. Department of Housing and Urban Development, prompted amendments to the city’s 2019-2023 Five-Year Consolidated Plan and the 2019-2020 Annual Action Plan to administer these CDBG-CV funds. These funds previously supported initiatives such as microenterprise assistance, educational programs for low- and moderate-income students impacted by the pandemic, Meals on Wheels and broadband infrastructure to expand internet access in LMI communities.

According to Ocala City Council member James Hilty, the decision to shift $200,000 to rental assistance was driven by both logistical challenges and community needs.

“A couple of things led to the decision to recommend the $200,000 of CDBG-CV funding be reallocated to rental assistance. Originally the city had contracted to do a second micro-business loan program with the Ocala Metro Chamber & Economic Partnership. However, after completing the first loan program, the CEP elected not to do a second one,” Hilty said.

“The city then reached out to Greater Ocala Community Development Corporation to carry out the micro-business loan program. This grant is distributed on a reimbursement basis; after GOCDC received a considerable decline in their donations, the organization contacted the city to inform us that it would not be financially feasible for them to execute the micro-business loan program,” he continued.

The reallocation responds to stark economic and social conditions in Ocala.

“Forty-four percent of renters in Marion County are cost burdened; they are spending more than 30% of their gross income on housing costs. Of the cost-burdened renters, 54% of them are spending over half their income on housing costs,” Hilty said.

He further highlighted the scarcity of resources for housing support.

“From Oct. 1 until April 30, there was very little money available to assist low- to moderate-income households with assistance to move into housing units or to assist struggling families to remain in units they currently occupied,” he explained.

Additionally, Hilty pointed to a three-week closure of the county’s largest homeless emergency shelter earlier this year due to active COVID-19 cases, which left no local funding to assist those facing eviction or attempting to exit homelessness. The rental assistance program aligns with HUD’s requirement that CDBG-CV funds address the impacts of the COVID-19 pandemic.

“The CDBG-CV grant must be used in a manner that will respond to the coronavirus or provide funding to prevent the spread of the virus. Rental assistance activities meet that HUD criteria by assisting individuals and families from being housed in potentially overcrowded conditions that could lead to the spread of the coronavirus,” Hilty said.

The assistance will focus on preventing homelessness by covering past-due rent amounts and providing security deposits for those exiting housing insecurity, though it cannot be used for utility costs. Eligibility is limited to city residents with household incomes at or below 80% of Marion County’s area median income, with applications processed on a first-come, first-qualified basis.

Other potential uses for the funds were considered, including rehabilitation and reconstruction of privately owned properties, property acquisition for housing and new housing construction. However, according to Hilty, because of construction costs, it was determined that the best return on investment would be to assist with rental assistance.

The amendment process adhered to federal regulations under 24 CFR 91.05(c)(2) and the city’s Citizen Participation Plan, with waivers enabled by the CARES Act. A public hearing, originally scheduled for May 6 was held May 20, allowing community input before the council’s approval. With the council’s approval, the city is now positioned to implement the rental assistance program, supporting vulnerable residents in navigating pandemic recovery and housing insecurity.

Residents can review the approved amendments to the Consolidated Plan and Annual Action Plan on the city’s website at ocalafl.org