Council moves forward with arts funding plan, promising relief for nonprofit grant applicants

Following the recommendations of the Arts Commission, City Council has approved funding for cultural arts programs with plans to significantly expand its nonprofit relief grant program. That’s good news for the program’s applicants, who can all expect to see checks by the end of the year.

Continuing its effort to support institutions impacted by Covid-19, Council unanimously supported a commitment to invest $6 million in federal relief money toward fulfilling budgeting needs of the Economic Development Department’s Cultural Arts Division. Included was a direction from Alison Alter, Council member and Audit & Finance Committee chair, proposing to add $500,000 from the city’s reserve fund, which will return for a vote in December.

The Cultural Arts relief grant program, created using emergency federal funds this past summer, offers participating organizations a $20,000 grant to alleviate hardships incurred by the pandemic. Anticipating no more than 100 recipients, Council approved $2 million in funding for the program’s second round back in July, but later found it had severely underestimated community needs.

Hoping to assist all eligible organizations that applied for the program, the Arts Commission has returned to Council several times to request further funding. Despite securing an additional $1 million during the budgeting process, commissioners found they were still unprepared to meet this ambitious target.

To close the funding gap, Council is poised to allocate another $500,000 from its reserves – a move Alter said they agreed to during the budgeting process but never made official. Lacking a fully formulated plan, Council opted to hold off and seek further guidance from the Arts Commission, which has historically seen success in circulating relief money.

Now, due to limitations on the use of reserve funds, Council will have to wait until December to formally amend the budget per the Arts Commission’s recommendations.

Austin’s cultural arts programs have been uniquely impacted by the pandemic, as the hotel tax that has historically funded them has taken a major hit from decreased tourism. Additionally, the pandemic arrived during the department’s transition to an equity-focused model that has presented its own set of challenges.

While the EDD acknowledges there is still uncertainty over tax revenue, Director Sylnovia Holt-Rabb says preliminary assessments have been promising.

“This plan will completely fund 218 nonprofit arts organizations as well as provide ARPA funding to our current cultural contractors,” Holt-Rabb said. “As you know, the arts community has taken a big hit and is definitely in need. We’re prepared to expedite payment to these organizations so that they will receive payment before the end of the year.”

Under the proposed framework, $5,300,373 will go toward fulfilling the Cultural Arts Division’s core and cultural heritage contracts; $420,000 will fund the nonprofit grants program; and the remaining $225,627 will be set aside for adjustments and miscellaneous expenditures.

“Our recommendation to use remaining ARPA arts funds for emergency relief grants instead of backfilling Hotel Occupancy Tax funds for cultural contracts is based on the critical need to provide immediate relief to artists and arts organizations,” wrote the Arts Commission in its recommendation to Council.

“Use of ARPA funding is less restrictive than HOT, and artists and organizations require flexibility to negotiate the continuing Covid impact. We have echoed the urgency articulated by Council to do all that is possible to get those funds out the door as swiftly as possible.”

Council and staff will continue monitoring shifting variables, but can depend on ARPA dollars to provide the lion’s share of relief to the arts community. The use of reserve funds will return for a formal vote on Dec. 9.

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