Oakley City Council to Look at $65k Gift Card Pilot Program Using ARPA Funding

On Tuesday, the Oakley City Council will receive an update on the potential use of its American Rescue Plan Act funding including a possible $65k pilot program for gift cards supporting local business.  The city will have $10 million to spend in ARPA funding.

According to the staff report, a rules update by the Federal Government provides greater flexibility in the spending of the ARPA funds since Oakley did not show a loss of revenue—including streets and sidewalk projects, water, sewer, broadband projects as well as staffing to restore or bolster local government employment up to 7.5% above a recipients pre-pandemic workforce baseline.

In a community survey between Dec. 15, 2021 to Jan 16, 2022, 488 responses provided the following:

• A majority of the respondents live in Oakley (98.98% or 483. Six responders skipped this question.)
• 91% of the respondents would participate in a Community E-Gift Card Program designed to promote Oakley businesses and encourage shopping, dining, and services in Oakley. 22.09% would not. (Five responders skipped this question.)
• 14% would like to see the temporary outdoor dining areas/spaces enhanced with more permanent and aesthetic structures. 12.86% would not. (Four responders skipped this question.)
• 491 survey responders ranked their preference for eight eligible ARPA fund uses to be implemented in the City of Oakley (4 responders skipped this question). The results are listed in descending order of weighted average:
  • Support the recovery of local businesses
  • Further improve streets and sidewalks, if approved by pending legislation
  • Improve public infrastructure (stormwater and access to broadband internet)
  • Ensure the City has the resources to continue to provide high quality services
  • Provide financial support to non-profit organizations in the community that help residents who need housing, food, healthcare, childcare, rent, or utility help
  • Provide support directly to households that have been financially impacted by COVID-19
  • Provide one-time premium pay to Police Officers and/or other essential workers
  • Upgrade the City’s technology with software to enhance remote use capabilities

The staff report highlights how many cities in California are using its ARPA funds to assist with implementing a Community Digital Gift Card program to help stimulate the local economy, assist small businesses and provide local savings to residents.

Community digital gift card programs allow residents to purchase gift cards that are only accepted at participating businesses—while promoting “shop local”.

Typically, community digital gift card programs have a resident buy a gift card valued at $50 with the initial investment from the resident being $25 and then they receive a ‘purchase bonus’ amount of another $25 that is paid by the city through ARPA funding. In other words, it is ‘buy one and get
one free’ for residents.

The city could choose between three platforms which are being used by cities such as Factor4, Giverrang and Yiftee.

According to the staff report,  Yiftee, based in Menlo Park in the Silicon Valley, is currently doing community digital gift card programs in many Bay Area and Northern California cities including Alameda, Benicia, Berkley, Brentwood, Cupertino, El Cerrito, Fremont, Hayward, Livermore, Martinez, Merced, Nevada City, Newark, Pleasanton, Sacramento, San Leandro, Selma and South Lake Tahoe. Additionally, the City of Pinole approved a program with Yiftee on December 21, 2021 and is looking to implement it in late January 2022. Lafayette’s City Council has also approved moving forward with a Yiftee gift card program in February 2022. A number of the cities (Benicia, Brentwood, Cupertino, Fremont, and Sacramento) initially funded their community digital gift card programs from the CARES Act and because they have been so successful, have followed up with more ARPA funding for additional rounds. Of the cities highlighted above, HdL provides ARPA support to San Leandro, Pinole and Lafayette.

In fact, 78% of respondents from the Community Survey said they would participate in a community gift card program for local Oakley businesses

Staff recommends that the City Council approve a Pilot Program, utilizing $65,000 in ARPA monies that would include:

• Funding the $1 + 5% delivery fee (purchaser fee) and the $1/bonus gift fee
• A bonus gift card to incentivize use of the program and provide a benefit to all community members
• Branding costs associated with development of the “shop local Oakley” campaign
• Marketing costs for advertisement and promotion of the program and related point- of-sale signage and posters for participating businesses

Use of Fiscal Recovery Funds by the City of Oakley

Oakley does not need to spend its funding until Dec. 31, 2026.  staff is recommending some changes to the preliminary plan for use of the first tranche of ARPA funding of $5,088,595 which are listed below:

• TECHNOLOGY ENHANCEMENTS: including a new Enterprise Resource Planning (ERP) system, new City web site & other possible software enhancements ($3,300,000)
• BROADBAND FEASIBILITY STUDY/FIBER MASTER PLAN: ($50,000)
• CITY EMPLOYEE COVID-19 COSTS: including COVID-19 testing and COVID-19 sick leave ($250,000)
• SOCIAL SERVICE NEEDS IN THE COMMUNITY: including the Food Bank of Contra Costa County, Meals on Wheels, Coco Kids Contra Costa County Child Care Resources and maybe other non-profits ($180,000)
• BUSINESS SUPPORT: Small Business Relief Grants ($235,000), Outdoor Dining and Business Façade improvements’ grants ($700,000) and E-Gift card pilot program to promote ‘shop local’ ($65,000)
• ARPA CONSULTING SUPPORT: ($50,000)
• TOTAL PROPOSED COSTS=$4,830,000

The remaining balance of the first tranche of $5,088,595 in ARPA funds = $258,595 (which is roughly 5% of the first tranche).

Council Meeting Info

• Tuesday, January 25, 2022 at 6:30 pm
• Staff Report: Click here
• Full Agenda: Click here