Workshop Item Joe Huss, Finance Director/Asst. City Manager
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American Rescue Plan (ARP) Funding Update
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Background
On March 11, the American Rescue Plan Act (“ARPA” or “ARP”) of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, was signed into law. The act is a $1.9 trillion economic stimulus bill that builds upon previously enacted aid measures in 2020. Blaine’s total allocation is $6,793,793, and the first payment of $3,396,896.50, equaling one-half of the total of Blaine’s allocation, has been received. The balance of the allocation is expected by mid-2022.
A staff committee comprising the Finance Director, Public Works Director, Director of Administration, and Economic Development Specialist is reviewing the Act in greater detail and developing a detailed spending plan within allowable and eligible uses in accordance with ARPA.
In developing the spending plan, the committee is researching US Treasury guidelines and resources from organizations such as the Government Finance Officers Association. Eligible uses of ARP funds, and the City’s efforts thus far regarding these eligible uses, include:
• 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. Economic Development Specialist Ruth Tucker is researching this section of the Act and has begun to reach out to Blaine small businesses and non-profits. Further research regarding assistance limits and post-grant reporting requirements is being conducted. Staff is also researching the use of ARP to provide additional business assistance to both Fogerty Arena and the National Sports Center.
• To aid hard-hit industries such as tourism; travel; and hospitality. Staff is looking into partnering with Twin Cities Gateway, the local Tourism Board, to determine what assistance could be provided under this category.
• Replace lost public sector revenue. The guidelines from the Treasury on how to calculate lost revenue are fairly specific. Finance staff are researching how to apply the guidelines to the City’s specific revenue loss experience.
• Provide premium pay for essential workers. Research indicates the City does not employ the types of positions that Treasury guidelines specifically refer to regarding premium pay, but additional research is being conducted.
• Invest in water, sewer, or broadband infrastructure. Treasury guidelines are strict in defining the infrastructure eligible for ARP funds - water, sanitary sewer, storm sewer, and broadband systems. Even under these narrowly defined uses, staff has identified a number of projects that are potentially eligible for ARP funding. Staff is also monitoring potential federal legislation that would provide funding for infrastructure projects outside of, or in addition to, ARP.
It is worth noting that ARP funds CANNOT be used to directly or indirectly offset tax reductions or delay a tax or tax increase, nor are ARP funds allowed to be deposited into a pension fund.
The deadline for committing ARP funds is December 31, 2024, with the deadline for actual expenditure of committed funds being December 31, 2026.
Staff Recommendation
While this item is primarily informational and intended as an update for Council, staff will be seeking Council’s collective disposition on specific uses of ARP funds.
Attachment List
No attachments.