Workshop Item - Joe Huss, Finance Director/Asst. City Manager
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American Rescue Plan (ARP) Funding Discussion
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Background
At the City Council Workshop on January 3, 2022, staff updated Council on the status of the City’s American Rescue Plan project. Staff reviewed with Council the broad categories of eligible uses of ARP funds as well as the changing landscape of ARP guidelines and regulations. Council provided staff with feedback on their preferred uses of ARP funds, which centered around business assistance and funding water, sanitary sewer, and storm sewer infrastructure.
A reminder of the general categories of eligible uses of ARP funds:
• Assistance to households, small businesses, and non-profits to aid in the public health emergency response and address negative economic impacts caused by the emergency.
• To aid hard-hit industries such as tourism; travel; and hospitality.
• Replace lost public sector revenue.
• Provide premium pay for essential workers.
• Invest in water, sewer, or broadband infrastructure.
Worth noting also is that ARP funds cannot be used to directly or indirectly offset tax reductions or delay a tax or tax increase or be deposited into a pension fund.
In the January workshop, Council reviewed updated Treasury Department guidelines and provided consensus direction to staff to follow the recommended “go slow” approach as the actual effects of the updated guidelines were evaluated. Specific updated guidelines that staff was reviewing were (1) the use of ARP funds for designated infrastructure projects, such as nationally significant freight and highway projects; and (2) the use of ARP funds for the provision of government services up to a minimum of $10,000,000. Following that direction, staff, with the assistance of consultants from Baker Tilly, has compiled a schedule of potential uses of ARP funds.
Draft Schedule of Uses
At the Spring Retreat, staff will present the current schedule of potential ARP uses for Council review and discussion. To date, the City has received one-half of its total ARP allocation of $6,793,793, with the second distribution scheduled for mid-year 2022. Currently, identified projects total $9,550,000 and exceed the city’s ARP allocation by $2.76 million. Categorically, the projects break down as $2.3 million for water utility projects; $4.7 million for sanitary sewer projects; $2 million for assistance to the National Sports Center; and $500,000 for small business assistance.
Staff Recommendation
Following Council’s review and direction at the retreat, staff will compile an ARP spending Plan to be approved by Council. The following steps would then be to execute and monitor the plan as it is being executed.
Attachment List
Schedule of potential ARP uses