This story was originally published in the Nebraska Examiner.
OMAHA — The jostling over hundreds of millions of dollars in public funds approved last year for North and South Omaha will pick up in the Legislature again this week.
Public hearings are scheduled Tuesday and Thursday before two different legislative committees and are expected to set off more debate over how the money is parceled out.
Representatives of several nonprofits say they are somewhat baffled over the process, believing that roughly six months of work that had been done recently by a state-hired consultant had set the course.
That consulting team, led by the Olsson firm, was under contract to be paid $1.7 million in public funds to host community meetings, provide technical assistance, analyze and score hundreds of applications and ideas submitted for economic development projects in North and South Omaha.
The team in January recommended that a slate of 35 groups or coalitions be awarded portions of $225 million from the overall $335 million Economic Recovery Act approved last year. About $125 million of the $225 million was recommended to go to building projects, employment-related and other initiatives proposed by North Omaha groups; the remaining $100 million was recommended for ventures aimed at building up South Omaha.
Also known as Legislative Bill 1024, the Economic Recovery Act was funded largely through the federal COVID-19-related American Rescue Plan Act. While the act was adopted last year, the distribution of funds to particular groups to carry out the initiatives had yet to be hammered out.
But Sen. Terrell McKinney of Omaha, a member of a special legislative committee overseeing the North-South grant process, and Anthony Goins, director of the Nebraska Department of Economic Development, which later is to play a key role, said the Olsson recommendations were just that: recommendations.
To what extent the Olsson recommendations might be followed remain uncertain, as amendments to pertinent bills were still being refined Sunday. Even then, some changes and additions to the lineup of grantees are expected to occur as a bill makes its way through the legislative process and, later, through a more formal application process governed by the DED, said McKinney and Goins.
New elements
McKinney said members of the special committee received a lot of feedback from people upset, for example, that an application for a Malcolm X memorial project was not among the Olsson recommendations for a grant.
He said an amendment would direct $20 million toward the museum.
In addition, there will be a new recommendation of $20 million for qualified health centers. Also, $15 million would go to fund a program manager to monitor projects as they are implemented.
McKinney said he, and likely other lawmakers, will be requesting more funding from the Legislature that could do even more to advance economic development in North and South Omaha.
This is an unprecedented amount of community engagement. This is an unprecedented amount of money.
– State Sen. Tony Vargas of Omaha
He said the amendments better defining a proposed disbursement plan should be ready in time for a public hearing on Legislative Bill 531, which begins at 1:30 p.m. Tuesday before the Legislature’s Urban Affairs Committee.
A public hearing on Legislative Bill 785, also introduced by McKinney, is to be held Thursday at 1:30 p.m. before the Appropriations Committee.
Both pertain to the North and South Omaha grants. McKinney said the strategy was to ensure that at least one of the measures advances from committee for debate by the full Legislature.
DED involvement
If a bill is approved by the Legislature and is signed into law, the Department of Economic Development will request formal grant applications from the North and South Omaha groups that represent both nonprofits and for-profit entities, said McKinney.
He said no groups beyond those that applied during the consultant phase are to be considered.
DED’s Goins said the Olsson consulting team went through its “due diligence” and “did a good job of whatever process they went through.” But it is not the final say, he said.
“At the end of the day, these are a lot of dollars,” said Goins.
He said his department is preparing for its role in reviewing grant requests from North and South Omaha groups to “ensure that those dollars are distributed to projects that will create a true economic return.”
Meanwhile, Goins said, his department is still trying to hire roughly 40 additional people to monitor the deluge of ARPA-related projects that have come under its watch in the last couple of years.
“This money came to us extremely quickly,” said Goins, adding that the department’s budget, formerly $100 million has surpassed $1 billion.
‘A lot of growth’
He noted that the challenge is exacerbated in a tight labor market. “We have to scale up to be able to manage this money.”
The additional 40 hires would add to the previous staff of about 100, Goins said.
“It’s a lot of growth,” he said. “We are working our butts off.”
State Sen. Tony Vargas of Omaha, another member of the special legislative committee overseeing the North-South grants, said he will work to ensure that the Olsson report is followed as closely as possible.
Vargas said that while people, including himself, might have prioritized different grantees, he stands by the process that the special legislative committee laid out.
“We gave them the parameters, the ideals, the core values,” he said of the consulting team. A slate of recommendations was issued. “Which is what we paid them to do. We should follow through.”
The Olsson group hosted its first community forum last August to try to better understand the needs of North and South Omaha and to answer questions from groups interested in funding for a project.
Concern by some
The consulting team said it reviewed 367 ideas and applications before whittling a proposed priority slate to 35 groups or coalitions. Some of those recommended grantees were coalitions representing several entities with a common purpose.
Cesar Garcia of Canopy South, a nonprofit recommended to oversee the largest grant amount south of Dodge Street, said he is concerned that the application process might essentially be reopened and that South Omaha projects could be trimmed or squeezed out. South Omaha agencies have held a few joint events recently to urge lawmakers to follow the Olsson recommendations.
“Our experience is that all of the organizations that went through the process put a lot of energy and resources into the last several months,” he said. “They’d be losing trust of organizations that went through the process.”
An earlier forum in North Omaha questioned the consultant’s process and challenged why certain projects or groups were recommended over others submitted by more well-known and proven entities.
Underlying the angst is that ARPA funds come with a deadline to be used by the end of 2026.
‘Unprecedented’
Vargas said he can understand the frustration and confusion.
The entire process is unprecedented, he said.
Other state, county and city ARPA funds were allocated in different ways, and without as much community input. Vargas said that never before has he seen a legislative activity or grant process seek as much community engagement as the distribution of the North and South Omaha ARPA funds.
The special legislative committee was intentional in trying to gain as much participation from North and South Omaha representatives as possible, he said, and the feedback, even the negative feedback, was expected.
“This is an unprecedented amount of community engagement,” he said. “This is an unprecedented amount of money.”
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