AGENDA CAPTION:
Title
Consider approval of Resolution 2025-177R, amending a funding agreement with Blanco River Regional Recovery Team (BR3T) allowing for American Rescue Plan Act (ARPA) funds to be applied toward administration of a rental and utility assistance program for residents of the City of San Marcos negatively affected by COVID-19 to increase the funding amount from $250,000.00 to a not to exceed amount of $400,000.00 over a two-year term with an option to extend; revising the Program Policies and Procedures; authorizing the City Manager, or her designee, to execute the appropriate documents to implement the amendment on behalf of the city; and declaring an effective date.
Body
Meeting date: September 16, 2025
Department: City Manager’s Office
Amount & Source of Funding
Funds Required: $150,000
Account Number: ARP-EC 2.2-DEV05-2021; 12073326-56556
Funds Available: Yes
Account Name: BR3T Rental Assistance
Fiscal Note:
Prior Council Action: City Council approved the agreement with BR3T on December 3, 2024 in the amount of $115,000 from American Rescue Plan Act funding. Council amended the agreement on March 4, 2025 to increase the amount to $250,000.
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Background Information:
In December 2024, City Council approved a funding agreement in the original amount of $115,000.00 with Blanco River Regional Recovery Team (BR3T) to administer a rent and utility assistance program for residents. The amount was increased to $250,000 in March 2025 to provide flexibility as additional American Rescue Plan Act (ARPA) funding was identified. This program is less restrictive than their existing programs and includes the following modified guidelines:
- Use the existing Hays County rent assistance program income guidelines, capped at 80% area median income.
- Include the ability to pay the first month’s rent (this helps people who are moving from homelessness or motel into an apartment).
- Eliminate the requirement that the applicant has to demonstrate the ability to pay one month after receiving assistance.
- Eliminate the requirement for a budget meeting.
- Allow payment of 6-months rent.
BR3T has successfully distributed $143,388.55 in assistance since the program began in January 2025. City Council reallocated an additional $77,030.44 toward the program on August 5, 2025, bringing the total amount of allocated funding to $217,418.99.
The purpose of this item is to increase the contract amount with BR3T with a not to exceed amount of $400,000.00, allowing flexibility if any additional funds from ARPA projects could be directed to that purpose without needing to bring this agreement back to Council each time. There is not currently any additional funding identified for this program at this time.
In addition, BR3T identified some additional expenses that are not currently allowed under the assistance program’s existing Policies and Procedures. BR3T’s justification for these changes is also included. We propose to add the following:
Proposed New Eligible Expenses for the Program Policies and Procedures:
- Rental Security Deposits for leases that have a minimum of a 6-month term are eligible expenses. Security Deposits cannot exceed two-months rent. Security deposits should be returned to the tenant at the end of the lease term in accordance with the Texas Property code (if the tenant stays in the rental at least 4 months). Otherwise, they should be returned to BR3T or retained by the landlord (in case of a break in the lease terms).
- One-time Pet Deposits and Pet Fees listed on a lease or lease addendum are allowed. Pet fees and deposits of this nature must not exceed $500 per pet or $1000 for all pets.
- Utility Deposits and connection fees are an eligible expense provided that they are paid to a utility provider for an eligible renter household.
- Application fees and administrative fees are an eligible program expense if used to help a client obtain stable housing. Application fees must be reasonable for the local rental market.
Justification:
Since April 2022, BR3T has been administering a $5 Million TDHCA grant (funded with ARPA funds) that pays security deposits, application fees, utility deposits, and short-term hotel stays. This grant will end September 30, 2025 which will leave San Marcos without this resource.
BR3T’s program is well-established; other organizations and government agencies refer clients to us for services. We would like to continue to be a resource for the community and increase the number of people stably housed in San Marcos.
There is a need for security deposit assistance in our community. We have seen a 78% increase in our deposit and application fee payments from the first 6 months of 2025 ($56,500) over the first 6 months of 2024 ($31,600).
There is a need for both rental assistance and security deposit assistance. For some households facing eviction, moving to a more affordable rental unit is their best option. Paying the security deposit is better for them than paying a rent to keep them in a rental unit they cannot afford. The best solution for some clients who are already in affordable rental units but are facing eviction is to work with the landlord to get the rent paid, prevent the eviction, and keep the household stably housed.
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Recommendation:
Staff recommends approval of the Resolution.