What’s at stake in McHenry County if federal funding freeze reinstated, from roads to housing for veterans

Before a federal judge paused President Donald Trump’s executive order freezing federal grants and loans, social service agencies and government leaders in McHenry County scrambled to determine what it could mean for programs here.

Officials from those agencies spoke about the confusion caused by the order, which was rescinded by federal authorities – at least for now – amid lawsuits from Illinois and other states.

Money from the federal government helps pay for a wide-ranging number of projects around the county, from roadwork and housing to social service programs and health care.

For example, federal grants have funded or are earmarked to fund portions of the Randall Road project in Crystal Lake and Lake in the Hills, homeless veteran housing programs at Veterans Path to Hope, construction of the Taylor Place apartments in McHenry, and many other programs that serve residents. McHenry County officials proudly touted their contribution of $1 million to the new Longmeadow Parkway bridge over the Fox River near Algonquin so it would not have to be a toll bridge. but that was federal money too.

In 2023, according to McHenry County records, the county government alone received about $22.5 million in federal grant dollars – almost 10% of the county’s total spending of $263 million that year.

Much of the federal dollars spent in 2023 – the most recent year for which data is available – were related to the COVID-19 pandemic. The pandemic spurred the American Rescue Plan Act, sending federal monies to local government.

Federal grant funding flows to other county programs, including the court system.

In October, the McHenry County courthouse received $1.3 million from the federal Substance Abuse and Mental Health Services Administration for its Dialectical Behavior Therapy program and $1.6 million for assisted outpatient treatment. The programs identify defendants who could benefit from mental health services, McHenry County Court Administrator Dan Wallis said. So far, it is unknown how a possible freeze or federal spending cuts will affect the programs.

“It requires SAMHSA to do an analysis and provide that information back to budget management prior to Feb. 10,” Wallis said Tuesday before the freeze was announced. “So, we’re in a position where we kind of wait and see.”

The 22nd Judicial Circuit Office of Special Projects administers, coordinates and monitors the Adult Drug Court, Mental Health Court, DUI Court and Domestic Violence Court programs.

“Specialty courts, drug courts [and] mental health courts have always had favor in Washington, D.C.,” Wallis said. “It’s certainly our hope that that favor continues.”

The grants were set to cover salaries and training costs for the programs. If a freeze were to result in any delays, the county would use the general fund budget and reimburse later, Wallis said.

“I have no reason to believe we would have to lay off anybody or any type of action would be needed to be taken at this point,” he said. “The specialty courts, they have shown via research and best practices that they do change behavior, they do save lives.”

Other agencies that work with at-risk residents said they planned to continue operating and serving clients, but a funding freeze could put some of the organizations' programs in jeopardy.

Speaking to a reporter Tuesday before the judge’s pause, John Buckley, executive director of Independence Health and Therapy in Woodstock, said his agency plans to keep operating and serving clients. Some services the organization provides are funded through Medicaid and the Older Americans Act, Buckley said, adding that he was trying to get more information.

“I don’t know” what is going to happen, Buckley said.

His isn’t the only agency unsure what a funding freeze could mean.

Frank Samuel, CEO of McHenry-based Pioneer Center for Human Services, said half of his agency’s $1.7 million budget for homeless services is publicly funded. It wasn’t clear exactly how a possible freeze could affect the social service agency.

Although the cities that the Pioneer Center serves also provide support, for which Samuel is grateful, residents don’t realize the cost of programs, such as transitional housing to the homeless, which is expensive.

Social service agencies aren’t the only ones grappling with the potential effects of the funding freeze.

Harvard has some road projects planned and grants that officials were going to apply for that are backed through the state but federally funded, City Manager Lou Leone said. He’s emailed the City Council to let it know he is monitoring the situation.

In the fall, Harvard won a no-cap grant from the Illinois Environmental Protection Agency (typically in the $60,000 range) to create a master plan for its drinking water and sanitary sewer systems. The grant is a pass-through from the federal government, and it’s now uncertain whether that grant will come through, Leone said.

“That grant was set to be side by side with the road master plan we are hoping to finish this year,” Leone said.

Wonder Lake also was relying on grants to fund its project linking water and sanitary from the Stonewater subdivision down McCullom Lake Road to Hancock Drive, Village President Dan Dycus said.

“Most of the funding is approved from the IEPA in the form of loans while a smaller portion is in the form of ARPA and other grants,” Dycus said Tuesday.

A portion of the now-rescinded funding freeze memo from the Trump administration indicated that the feds may want repayment of the ARPA grants that were distributed during the Biden administration.

Dycus added before the freeze reversal that although there were concerns about “so-called clawbacks of already awarded but yet-to-be-paid grants, this has yet to be confirmed.”

Other municipalities said they also were watching warily for whatever the next moves might be when it comes to federal assistance.

“It’s too early to tell what, if any, funding will be impacted for the city of McHenry. However, we are closely tracking information from the federal and state governments, as well as our regional council of government,” McHenry City Administrator Suzanne Ostrovsky said Tuesday.

Cary Mayor Mark Kownick, who is on the boards of the Metropolitan Mayors Caucus and the Illinois Municipal League, said those organizations are gathering information from municipalities to get a bigger picture of the potential effects of any spending freezes or cuts.

“It is going to have an impact, but we’re trying to figure out exactly how,” he said. “This is super fluid right now.”

In Woodstock, City Manager Roscoe Stelford said city staff had been communicating with the Illinois Department of Transportation. City officials still are trying to figure out things such as the Illinois Transportation Enhancement Program grant the city applied for. Construction to widen Route 47 through the heart of Woodstock is scheduled to kick off this summer.

At a Tuesday evening meeting of the McHenry County Mental Health Board, Executive Director Leonetta Rizzi noted that the federal funding freeze had been put on hold. Still, she said she was trying to help service providers who rely on federal dollars to determine their next moves.

Rizzi said the board heard back from Crystal Lake-based Veterans Path to Hope, where officials were very worried about the freeze. The organization receives about 50% of its budget from federal dollars, Rizzi said.

A Veterans Path to Hope official could not be reached for comment, but the organization’s website indicates that a U.S. Department of Labor grant funds its Homeless Veterans Reintegration Program, which is meant to help veterans find employment.