AGENDA
ITEM
12 • Wraparound Homeless Rehabilitation Services
• Outreach Specialist
• Library Infrastructure Project.
• Upgrade City Broadband Infrastructure
• Water/Sewer Replacement Projects
On January 4, 2022 the City Calexico City Council directed the City Attorney to create a resolution designating former city employees who performed essential work from March 2020 through June 2021 to be considered for premium pay based on hours worked similar to the compensation received by active city employees.
Fiscal Impact:
Available ARPA Balance, $7,228,591 .00.
Attachments:
Attachment "A" - Public Workshop February 1, 2022 Spending Plan Attachment "B" - Alternative Spending Plan
Attachment "C" - BBK Spending Compliance Memorandum
8121 1.00 102\34629449.1
ATTACHMENT "A"
PUBLIC WORKSHOP
FEBRUARY 1, 2022 SPENDING
.... CA/¢<>v"'" uhd
AMERICAN RESCUE PLAN ACT WORKSHOP
.
TALLER DEL PLAN DE RESCATE AMERICANO
FEBRUARY 1, 2022
TOPICS/TEMAS
• Approved Expenditures/Gastos Realizados • Final Rule Overview /Resumen del Reglamento Final • Proposed Use of ARPA Funds/Propuestas de Uso de las Fondos ARPA • Public Input/Comentarios del Publico
• Next Steps /Siguientes Pasos
APPROVED EXPENSES/GASTOS REALIZADOS
OCTOBER 6, 2021- $1,278,000
• City Council adopted resolution
approving the city's use of ARPA funds
for the replacement of public safety
vehicles and authorizing the issuance
of a request proposal.
• Fire Department: Two (2) Fire Rescue
Ambulances, Three (3) Utility Vehicles
• Police Department: Six ( 6) Ford
Explorer Equipped Patrol Vehicles, Two
(2) Pickup Trucks Equipped Patrol
Vehicles
NOVEMBER 3, 2021- $1,020,396
• City Council adopted a resolution
approving the city's use of ARPA funds
to provide up to $7,000 per full time
and par time eligible employee.
• At the approved date, eligible
employees must be employed (active)
full time and part time employees who
worked between March 17, 2020, and
June 30, 2021.
EXPENSE SUMMARY /RESUMEN DE GASTOS
Unanticipated revenue allocation from the American Rescue Plan Act to the City of Calexico, $9,526,987.00
10 /6/21 Public Safety Vehicles $1,278,000.00
11/3 /21 Premium Pay $1,020,396.00
Current Balance $7,228,591.00
FINAL RULE OVERVIEW /RESUMEN DE REGLAMENTO FINAL
o On January 6, 2022, the U.S. Department of the Treasury issued the Final Rule to implement the Coronavirus State and Local Fiscal Recovery Funds program under the American Rescue Plan. The Final Rule takes effect April 1, 2022.
o Key Changes and Clarification Points - The Final Rule, compared to the Interim Final Rule (May 2021), delivers broader flexibility and greater simplicity in the program, responsive to feedback in the comment process. o Eligible Use of Funds:
• Replace lost public sector revenue, using this funding to provide government services up to the amount of revenue loss due to the pandemic.
• Support the COVID-19 public health and economic response by addressing COVID-19 and its impact on public health as well as addressing economic harms to households, small businesses, nonprofits, impacted industries, and the public sector.
• Provide premium pay for eligible workers performing essential work. offering additional support to those who have and will bear the greatest health risks because of their service in critical sectors. • Invest in water. sewer. and broadband infrastructure, making necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand affordable access to broadband internet.
PROPOSED USE OF ARPA FUNDS/ PROPUESTAS DE USO DE LOS FONDOS ARPA o Priority is to find a nexus of the proposed use of ARPA funds with the City of Calexico Strategic Plan adopted on September 15, 2021.
o Key Objectives from Strategic Plan:
• Develop mutually supportive environment of professionalism that encourages stakeholder partnerships, teamwork and supports city efforts to continually improve services. • Enhance all employee access to needed information to strengthen public services. • Streamline city development and administrative services to assist contractors. o Proposed Uses - Alignment with Strategic Plan
• Upgrades and modernization of information technology infrastructure on public facilities accessed by city employees, business owners and the general public that visits the City of Calexico. • Water and sewer infrastructure projects to complement the Capital Improvement Program that will promote development and investment for housing and business development. • Provide underserved sectors of our community with expanded broadband access.
PROPOSED USE OF ARPA FUNDS/ PROPUESTAS DE USO DE LOS FONDOS ARPA o The City of Calexico received the following proposals from Imperial Valley Equity & Justice Coalition, Calexico Needs Change and Calexico Union Against Corruption (email to City Manager 1/20/22):
• Bonus Program for COVID-19 High-Risk Essential Workers (grocery store workers, warehouse workers, healthcare, and farmworkers)
• Downtown Infrastructure for Essential Workers • Invest in Cooling Stations • Invest in Outreach Capacity to Increase Access to Assistance Programs • Psychiatric Emergency Response Team
• Invest in a "Housing First" Pilot Program
o The City Manager's Office received the following proposals from city employees:
• Airport: Terminal Repair
• Heber Park: Soccer Field, Basketball Court and Fencing • Rodriguez Park: Field/Park Lights, Tennis Court Resurfacing and Fencing • Kennedy Park: Park Lights and Parking Lot Resurfacing • Cordova Park: Soccer Field and Concession Stand
• City Library: Parking Lot Lights and Parking Lot Resurfacing • City Community Center: Parking Lot Lights and Parking Lot Resurfacing • Downtown: Streetlight Infrastructure and Trash Bins
• Emergency Response Equipment: ECG Monitors, Patient Gurneys and Communication System
PROPOSED EXPENSE SUMMARY /RESUMEN DE GASTOS PROPUESTOS
$7,228,591.00
Public Facilities l/T Upgrades $850,000 $6,378,591
City Broadband Infrastructure $450,000 $5,928,591
Indoor Ventilation/Filtration for City Facilities $650,000 $5,278,591 Downtown Infrastructure $750,000 $4,528,591
City Park Infrastructure $1,000,000 $3,528,591
Library /Recreation Infrastructure Projects $350,000 $3,178,591 Emergency Response Equipment $1,000,000 $2,178,591
Water and Sewer Replacement Projects $1,000,000 $1,178,591 Airport Terminal Repair $100,000 $1,078,591
Remaining Funds $1,078,591
NEXT STEPS
o City Council consideration and approval of proposed use of ARPA funds scheduled for the City of Calexico Regular Meeting on February 16, 2022.
ATTACHMENT "B"
ALTERNATIVE SPENDING PLAN
Proposed Use
Complete Downtown
Rehabilitation
Essential Worker Relief
Program
Outreach Specialist
Proposed Budget
Detail
• . Shade structures and plants
• Seati ng/loungi ng/eati ng structures
• Additional Restrooms
• Water Stations. Drinking Fountain/ Bottle
Refill
• Min. 1 Public Cooling Station
• Beautifi ca ti on elements
• Trash Bins
• Establishment of Sanctioned Homeless
Encampment and Safe Parking Lot
Direct Payment to essential workers:
grocery, pharmacy, farmworkers. etc.
(as defined by council)
(1) Full-time for 3 years.
Helps individuals and businesses navigate
relief programs at all levels
Works with SBDC to promote new postpandemic business opportunities Budget Estimate
$3.000,000*
$1.000,000
$180,000
Balance
$7,228,591
4.228.591
$3,228,591 $3,048,591
Proposed Budget
1 Proposed Use Detail Budget Estimate Balance
J
Emergency Response Fi re/ Ambulance 11 $1,000,000 'I II $2,048,591 Equipment
- - -" --
Public Facilities l/T Include a Downtown free Wi-Fi zone $1,000,000* $1,048,591 Upgrades as priority for commercial/social
growth
Free Wi-Fi areas from public facilities
as allowed by allotted funds
City Broadband
II
Capacity to support l/r and public JL 450,00C ' ! $598,591 infrastructure Wi-Fi projects Emergency Park Park Restroom and Water Access $500,000 $98,591 Infrastructure
*Denotes Adjustable Spending based on project scale
Project
1st and 2nd
Street
Closure
1st: from
Rockwood
to Heber
2nd from
Imperial to
Heber
Supporting
Agency/Depart
ment
Plann ing and
Public Works
Departments -
City of Calexi co
Adjacent/Supporting Projects
Purpose & Description
• Creates pedestrian friendly dow ntow n zone, reduces veh icle-pedestrian collisions.
Less demand for ambulance by preventing collisions.
• Improves Calexi co public transit ridersh ip. Complementary pedestrian space for incoming trans it center, destination for future 2022 Calexico Microtransit Service users • As Transit Center establishes soon and serves more of the valley, public trans it for w ork w ill become more vi able. This incentivizes usage of pedestrian POE. cutting dow n on overa ll border-related car traffic going through the city and the entire County.
Road maintenance savings for entire County down the road. • New commercial space for new/existing small and microbus iness. Creates Downtow n Small/M icrobusiness incubator zone, accessible for low - income people entering the market.
Makes use of new sidewalk ordinances and blank canvas for new ordinance innovation. • De Facto Park Space with free public Wi -Fi. More space to use coverage so coverage is not w asted . More reason to stick around. more opportun.i ties to shop, generate sales tax.
Promote mental health through outdoor access. Gives people a place to socialize. relax. • More efficient Imperial/2nd street intersection. No traffic light needed, full flow w ith both lanes northbound. More efficient car traffic.
• More efficient Imperial/2nd street intersection reduces emi ssions, good for climate. Setting up for greater public transit adopt ion also good for meet ing Calexi co's Climate Goals • Landing Space for Farmworkers/ Cross-Border students
• Space to implement Bloomberg Art Grant
- --
Project
Wraparound
Homeless
Rehabilitation
Services
SBDC
Reorganization
under County
Adjacent/Supporting Projects
Supporting
Agency/Department
Social Services, Behavioral
Health, Public Health,
Workforce Dev. -
County of Imperial
Supporting non-profit
organizations
County of Imperial
Purpose & Description
• Will create a rehabilitation pathway out of the proposed transitiona l housing projects in the Downtown Plan
• Density (having homeless together in one place) low ers cost of service to the County and allows us to innovate to solve the problem in a more permanent manner
• Works in conjunction with existing and future Homekey Projects fo r next step transitional housing
• Establish permanent SBDC office within City Hall to help formalize local businesses w ith new opportunities created under this plan '
ATTACHMENT "C"
BBK SPENDING COMPLIANCE MEMORANDUM
Bend OR
(541) 382-3011
Indian Wells
(760) 568-2611
Irvine
(949) 263-2600
Los Angeles
(213) 617-8100
Ontario
(909) 989-8584
Ana D. Schwab
(202) 370-5311
[email protected]
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ATTORNEYS AT LAW
1800 K Street NW, Suite 725, Washington, D.C. 20006
Phone: (202) 785-0600 I Fax: (202) 785-1234 I www.bbklaw.com Riverside
(951) 686-1450
Sacramento
(916) 325-4000
San Diego
(619) 525-1300
Walnut Creek
(925) 977-3300
Washington, DC
(202) 785-0600
CONFIDENTIAL
ATTORNEY/CLIENT PRIVILEGE
To:
From:
Date:
Re:
Miguel Figueroa
City Manager
City of Calexico
Ana D. Schwab
Febrnary 25, 2022
Memorandum
City of Calexico' s Proposed Spending Plan - Compliance with ARP A
INTRODUCTION
This memo provides a review of the City of Calexico's ("the City") spending plan for compliance with the American Rescue Plan Act of 2021 ("ARPA"). The projects in the spending plan are classified as (1) eligible, (2) eligible if addressing public health or economic disparities, (3) requiring further clarification or explanation, and ( 4) ineligible. For projects that are not outright eligible, this memo provides guidance for how the City can strengthen compliance with ARP A and Treasury guidelines.
ARP A SPENDING REQUIREMENTS
The American Rescue Plan Act ("ARPA") was signed into law in March 2021. ARPA contained a section, the Coronavirns State and Local Fiscal Recovery Fund ("SLFRF"), to provide monetary support to local governments to respond to, mitigate, and recover from the COVID-19 public health emergency. In May 2021, the U.S. Treasury released an Interim Final Rule providing further guidance on SLFRF. Under the Statute and Rule, there are six categories of eligible use: 1 I. Support for public health expenditures;
II. Address negative economic impacts caused by the public health emergency; 1 American Rescue Plan Act of2021, Pub. L. No. 117-2, § 603(c)(l); Coronavirus State and Local Fiscal Recovery Funds, 86 Fed. Reg. 26,786 (May 17, 2021) (codified at 31 C.F.R. Part 35) [hereinafter "Interim Final Rule"]; Coronavirus State and Local Fiscal Recovery Funds, 87 Fed. Reg. 4338, 4339 (January 27, 2022) {codified as of April 1, 2022 at 31 C.F.R. Part 35) [hereinafter "Final Rule"].
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111. Replace lost public sector revenue;
iv. Provide premiwn pay to eligible workers;
v. Invest in water, sewer, and broadband infrastructure.
ARPA Funds may be used for costs incwTed after March 3, 2021 until December 31, 2024.
ARP A Funds must be expended by December 31, 2026.2
The City has asked for a review of projects proposed in plans put forth by the City Manager and the Council.
A. Support for public health expenditures
The Interim Final Rule and Final Rule on the ARP A State and Local Fiscal Recovery Funds ("ARP A Funds") can be used to address a broad range of public health needs related to the COVID-19 pandemic. When utilizing funds under this category, recipients must first identify a COVID-19 public health impact on an individual or class (i.e. group) and second, design a program that responds to the identified impact. 3 Treasury has provided a list of enumerated uses under this categmy. Treasury has also provided the ability for recipients to use funds under this category outside of the enumerated uses.4 As this is pe1tinent to this section and Section B of this memorandum, the use beyond those enumerated is discussed in section F of this memorandwn.
When expending funds under this category, there are four subcategories of eligible use: ( 1) COVID-19 mitigation and prevention; (2) Medical Expenses; (3) Behavior Healthcare (such as mental health treatment, substance use treatment, and other behavioral health services); and (4) Preventing and Responding to Violence (each of which has enumerated uses put fmth by treasury). 5
2 Final Rule at 4340. 3 Id. at 4343. 4 Id. at 4392-3; See also U.S. Treasury, Coronavirus State & Local Fiscal RecovelJ' Funds: Ove111iew of the Final Rule, pg. 32 (January 2022) [hereinafter "Overview of the Final Rule"). 5 Overview of the Final Rule, pg. 14-15. - 2 -
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Enumerated uses under COVID-19 mitigation and prevention: 6 ./ Vaccination programs, including vaccine
incentives and vaccine sites
./ Testing programs, equipment and sites
./ Monitoring, contact tracing & public
health survelllance (e.g., monitoring for
variants)
./ Public communication efforts
./ Public health data systems
./ COVID-19 prevention and treatment
equipment, such as ventilators and
ambulances
./ Medical and PPE/protective supplies
./ Support for isolation or quarantine
./ Ventilation system installation and
improvement
./ Technical assistance on mitigation of
COVID-19 threats to public health and
safety
./ Transportation to reach vaccination or
testing sites, or other prevention and
mitigation services for vulnerable
populations
./ Support for prevention, mitigation, or
other services in congregate living
facilities, public facilities, and schools
./ Support for prevention and mitigation
strategies in small businesses, nonprofits,
and impacted industries
./ Medical facilities generally dedicated to
COVID-19 treatment and mitigation (e.g.,
ICUs, emergency rooms)
./ Temporary medical facilities and other
measures to increase COVID-19 treatment
capacity
./ Emergency operations centers &
emergency response equipment (e.g.,
emergency response radio systems)
./ Public telemedlcine capabilities for COVID19 related treatment Enumerated uses under Medical Expenses allow for ARP A Funds to be used for expenses to households, medical providers, or others that incurred medical costs due to the pandemic, including: 7
./ Unreimbursed expenses for medical care
for COVID-19 testing or treatment, such
as uncompensated care costs for
medical providers or out-of-pocket costs
for individuals
./ Paid family and medical leave for public
employees to enable compliance with
COVID-19 public health precautions
./ Emergency medical response expenses
./ Treatment of long-term symptoms or effects
of COVID-19
Enumerated uses under Behavioral Healthcare for services to the general public includes: 8 ./ Prevention, outpatient treatment,
inpatient treatment, crisis care,
diversion programs, outreach to
individuals not yet engaged in
treatment, harm reduction & long-term
recovery support
./ Enhanced behavioral health services in
schools
./ Services for pregnant women or infants
born with neonatal abstinence
syndrome
6 Id. at pg. 14. 7 Id. at pg. 15. 8 Id.
./ Support for equitable access to reduce
disparities in access to high-quality
treatment
./ Peer support groups, costs for residence in
supportive housing or recovery housing, and
the 988 National Suicide Prevention Lifeline
or other hotline services
./ Expansion of access to evidence-based
services for opioid use disorder prevention,
treatment, harm reduction, and recovery
./ Behavioral health facilities & equipment
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Enumerated uses under the Prevention and Response to Violence: 9 ./ Referrals to trauma recovery services for
victims of crime
./ Community violence intervention
programs, Including:
• Evidence-based practices like
focused deterrence, with
wraparound services such as
behavioral therapy, trauma
recovery, job training, education,
housing and relocation services, and
financial assistance
./ In communities experiencing increased
gun violence due to the pandemic:
• Law enforcement officers focused
on advancing community policing
• Enforcement efforts to reduce gun
violence, including prosecution
• Technology & equipment to support
law enforcement response
B. Address negative economic impacts caused by the public health emergency The Inte1im Final Rule and the Final Rule on the ARP A Funds can be used to provide direct assistance to households/communities, small businesses, nonprofits, and impacted industries. 10 Under each subcategory of eligible use, Treasury has provided an analysis of impact and disproportionately impacted for each as well as enumerated uses for the impacted and disprop01iionately impacted under each subcategory. 11 Treasury has also provided an additional subcategory to assist recipients with public sector capacity and workforce. 12 a. Assistance to Households and Communities
Treasury presumes the following households are impacted by the pandemic: 13 low-ormoderate income households or communities, defined as those with (i) income at or below 300% of the Federal Poverty Guidelines for the size of the household based on the most recently published pove1iy guidelines or (ii) income at or below 65 percent of the area median income for the county and size of household based on the most recently published data. 14 Further, Treasury
presumes a household or community is impacted if it has experienced unemployment, expe1ienced increased food or housing insecurity, and qualify for Children's Health Insurance Program (CHIP), Childcare subsidies through the Child Care Development Fund (CCDF) Program, or Medicaid.
When providing affordable housing programs, a household or community is presumed impacted if it qualifies for the National Housing Tiust Fund and Home Investment Partnership Programs.
When providing services to address lost instmctional time in K-12 schools, a household or community is presumed impacted if any student lost access to in-person instmction for a significant period of time.
9 Id. 10 Id. at pg. 12.
II Id.
12 Final Rule at 4384. 13 Id. at 4441, 4348. 14 Treasmy has created a tool for detennining Low-and-Moderate Income households to be found at:
https://home. treasury. gov/system/ti les/13 6/SLFRF-LMI-tool.xlsx - 4 -
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Enumerated uses for impacted households and communities includes: 15 ./ Food assistance & food banks
.; Emergency housing assistance: rental
assistance, mortgage assistance, utility
assistance, assistance paying delinquent
property taxes, counseling and legal aid to
prevent eviction and homelessness &
emergency programs or services for homeless
individuals, including temporary residences
for people experiencing homelessness
./' Health Insurance coverage expansion
.; Benefits for surviving family members of
individuals who have died from COVID-19
./' Assistance to individuals who want and are
available for work, including job training,
public jobs programs and fairs, support for
childcare and transportation to and from a
jobsite or interview, incentives for newlyemployed workers, subsidized employment, grants to hire underserved workers,
assistance to unemployed individuals to start
small businesses & development of job and
workforce training centers
./' Financial services for the unbanked and
underbanked
./' Burials, home repair & home weatherization
.; Programs, devices & equipment for internet
access and digital literacy, including subsidies
for costs of access
.; Cash assistance
./' Paid sick, medical, and family leave programs
./ Assistance In accessing and applying for
public benefits or services
./ Childcare and early learning services, home
visiting programs, services for child welfareinvolved families and foster youth & childcare facilities
./' Assistance to address the impact of learning
loss for K-12 students (e.g., high-quality
tutoring, differentiated instruction)
./' Programs or services to support long-term
housing security: including development of
affordable housing and permanent
supportive housing
./ Certain contributions to an Unemployment
Insurance Trust Fund'
Treasury presumes the following households and communities are disproportionately impacted: 16 Low-income households and communities, defined as those with (i) income at or below 185 percent of the Federal Poverty Guidelines for the size of its household based on the most recently published poverty guidelines or (ii) income at or below 40 percent of area median income for its county and size of household based on the most recently published data. Further, Treasury presumes a household or community as disproportionately impacted if it is in a Qualified Census Tract, if they qualify for Temporary Assistance for Needy Families (TANF); Supplemental Nutrition Assistance Program (SNAP); Free and Reduced-Price Lunch (NSLP) and/or School Breakfast (SBP) programs, Medicare Part D Low-Income Subsidies, Supplemental Security Income (SSI), Head Start and/or Early Head Start, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Section 8 Vouchers, Low-Income Home Energy Assistance Program (LIHEAP), and Pell Grants. For services to address educational disparities, Treasury will recognize Title I eligible schools as disproportionately impacted and responsive services that support the school generally or support the whole school as eligible, receiving services provided by Tribal governments, or residing in the U.S. territories or receiving services or these governments.
15 Overview of the Final Rule, pg. 18. 16 Final Rule at 4348-9, Overview of the Final Rule, pg. 19. - 5 -
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Enumerated uses for disproportionately impacted households and communities includes: 17 ./ Pay for community health workers to help ./ Improvements to vacant and abandoned households access health & social services properties, including rehabilitation or ./ Remediation of lead paint or other lead maintenance, renovation, removal and hazards remediation of environmental contaminants,
./ Primary care clinics, hospitals, integration of
health services Into other settings, and other
investments in medical equipment & facilities
designed to address health disparities
./ Housing vouchers & assistance relocating to
neighborhoods with higher economic
opportunity
./ Investments In ne ighborhoods to promote
improved health outcomes
demolition or deconstruction, greening/vacant Jot
cleanup & conversion to affordable houslng7
./ Services to address educational disparities ..
Including assistance to high-poverty school
districts & educational <1nd evidence-based
services to address student academic, social,
emotional, and mental health needs
..t Schools and other educational equipment &
facilities
b. Assistance to Small Businesses
Treasury has defmed a small business as one that has no more than 500 employees, or if applicable, the size standard in the number of employees established by the Small Business Administration for the indush-y in which the business concern or organization operates and is a small business concern as defined in section 3 of the Small Business Act (which includes, among other requirements, that the business is independently owned and operated and is not dominant in its field of operation. 18
Treasury presumes a small business is impacted if it experienced a decrease in revenue or gross receipts; financial insecurity; increased costs; capacity to weather financial hardship; or challenges covering payroll, rent or m01igage, and other operating costs. 19 Recipients may utilize other factors it deems appropriate and in line with the statute, mles, and accompanying guidance to determine if a small business is impacted. Enumerated assistance to an impacted small business includes loans or grants to mitigate financial hardship, such as support for payroll and benefits, costs to retain employees, and mortgage/rent/utility, and other operating costs; and technical assistance counseling, or other services to support business planning. 20 Treasury presumes a small business is disproportionately impacted if is operating in a qualified census tract, operated by a Tribal government or on Tribal lands, or is operating in a U.S.
Tenitory.
2 1 Enumerated assistance to a disproportionately impacted small business includes:
rehabilitation of commercial prope1iies, storefront improvements, and fac;ade improvements; technical assistance, business incubators and grants for start-up or expansion costs for small businesses; or support for microbusinesses including financial, childcare, and transp01iation costs. 22
17 Overview of the Finale Rule, pg. 20. 18 Final Rule at 43 77 . 19 Id.
20 Id ..
21 Id.
22 Overview of the Final Rule, pg. 22.
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c. Assistance to Nonprofits
Treasury defines an eligible nonprofit as one who is a 50l(c)(3) or a 501(c)(19) tax exempt organization.23
Treasury presumes a nonprofit is impacted when considering the following factors:
decreased revenue (i.e. from donations and fees); financial insecurity; increased costs (i.e. uncompensated increases in service need); capacity to weather financial hardship; or challenges covering payroll, rent or mortgage, and other operating costs. 24 Recipients may utilize other factors
it deems appropriate and in line with the statute, rnles, and accompanying guidance to determine if a small business is impacted. Enumerated assistance to impacted nonprofits include: loans or grants to mitigate financial hardship; or technical or in-kind assistance or other services that mitigate negative economic impacts of the pandemic.25
Treasury presumes a nonprofit is disproportionately impacted if it operates in a qualified census tract; is operated by a Tribal government or on Tribal lands; or operates in a U.S. telTitory.26 Assistance to disproportionately impacted nonprofits is at the discretion of the recipient as long as the assistance is related and reasonably proportional to addressing the disproportionate impact.27 d. Assistance to Impacted Industries
Treasury does not provide a distinction of impacted or disproportionately impacted industries. Recipients have the ability to define an impacted industry, either nalTowly or broadly, but is encouraged to define it nalTowly and discrete industries for assistance. 28 Treasury states that if the industry is in the travel, tourism, or hospitality industries (including Tribal development districts, then the industry is deemed impacted.
29 If the industry is not one of the previous
categories, the industry may be considered impacted if it experienced at least eight percent employment loss from pre-pandemic levels or the industry is experiencing comparable or worse economic impacts as the national tourism, travel, and hospitality industries as of the date of the final rnle, based on the totality of economic indicators or qualitative data, and if the impacts were generally due to the COVID-19 public health emergency. 30 Assistance under this category is limited to businesses, attractions, and Tribal development districts that were operating prior to the pandemic and were affected by the required closures and other efforts to mitigate the COVID-19 pandemic. 31 Enumerated assistance to impacted industries 23 Final Rule at 4381. 24 Id. at 4450.
25 Id ..
26 Id. at 4380.
21 Id.
28 Id. at4381.
29 Id.
30 Id. at 4382. 31 Id.at4381.
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are: aid to mitigate financial hardship, such as supporting payroll costs, lost pay and benefits for returning employees, support of operations and maintenance of existing equipment of facilities; technical assistance, counseling, or other services to supp01t business planning; COVID-19 mitigation and infection prevention measures. 32
e. Public Sector Capacity and Workforce
Treasury has included public sector capacity and workforce as an eligible use under the negative economic impact category.
33 Recipients are able to use ARP A funds for three eligible areas to increase capacity and workforce: (i) public safety, public health, and human services staff; (ii) government employment and rehiring public sector staff; and (iii) effective service delivery. 34 The use of ARP A Funds for public safety, public health, and human services staff allows recipients to cover payroll and covered benefits for this category of workers, limited to the portion of the employee's time spent responding to the COVID-19 public health emergency. The Final Rule lays out specific guidelines for the types of employees that would qualify under each category. 35
Under this subcategory, recipients may use ARP A Funds to hire government employees up to pre-pandemic levels; provide additional funds for employees who experience pay cuts or were furloughs; to avoid layoffs; provide worker retention incentives; and pay for ancillary administrative costs related to hiring, support, and retention. 36 Lastly, under this subcategory, Treasury permits recipients to use ARP A Funds to address effective service delivery. The use of these funds may be used to improve efficiency of public health and economic programs through tools such as program evaluation, data, outreach, and administrative needs caused or exacerbated by the pandemic. 37 C. Replace lost public sector revenue
ARP A allows recipients to utilize ARP A Funds to replace lost public sector revenue. 38 To detennine the amount permissible under this category, recipients have two options: (i) elect the standard allowance of $10 million or (ii) calculate actual revenue Joss at four distinct points in time. 39 Once a decision is made on which method a recipient is utilizing, the selection is in place for the entirety of the program.
32 Ove111iew of the Final Rule, pg. 25. 33 Final Rule at 4383 . 34 Id. at 4387. 35 Id. at 4384. 36 Id. at 4386. 37 Id. at 4388-9. 38 Id. at 4339. 39 Overview of the Final Rule, pg. 9. - 8 -
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If a recipient chooses the standard allowance, the amount is $10 million, no more.
However, the amount may be less if the recipient's total award was less. The recipient may elect the standard allowance, and utilizing this category up to the amount ofrecipient's award. 40 If recipient elects to calculate actual revenue loss at four points in time, the recipient is to calculate the actual lost revenue at four points in time - either the end of each calendar year or the end of the recipient's fiscal year, then the recipient is to utilize the formula provided in the Interim Final Rule: 41
( 1) Identify revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue.
(2) Estimate counterfactual revenue, which is equal to base year revenue [(l +growth adjustment)A(n/12)], where n is the number of months elapsed since the end of the base year to the calculation date, and growth adjustment is the greater of 4.1 perfect and the recipient's average annual revenue growth in the three full fiscal years prior to the COVID-19 public health emergency. (3) Identify actual revenue, which equals revenues collected over the past twelve months as of the calculation date.
( 4) The extent of the reduction in revenue is equal to the counterfactual revenue less actual revenue. If actual revenue exceeds counte1factual, the extent of the reduction in revenue is set to zero for that calculation date.
For either election, the enumerate use is general government seivices. 42 General
government se1vices are considered "generally any se1vice traditionally provided by a government, including construction of roads and other infrastructure, provision of public safety and other services, and health and education seivices."43 This includes, but is not limited to: construction of schools and hospitals; road building and maintenance and other infrastructure; health se1vices; general government administration, staff, and administrative facilities; environmental remediation; provision of police, fire, and other public safety seivices.44 4 ° Final Rule at 4402-3. 41 U.S. Department of Treasury, Coronavirns State and Local Fiscal Recovery Funds, 31 CFR § 35, II, C; See also Overview of the Final Rule, pg. 9. 42 Ove111iew of the Final Rule, pg. 9. 43 Jd.
44 Jd.
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D. Provide premium pay to eligible workers
To aclmowledge the heightened risk essential workers perform and performed, recipients may utilize ARP A Funds to provide these essential workers premium pay.45 The Final Rule provides a list of eligible workers for this category, while also broadening the list of eligible workers who can receive premium pay without a recent justification. 46 Those eligible receive
premium pay in addition to wages or compensation and may be done in installments or lumpsums.47 Premium pay may be up to $13/hour and may not exceed $25,000 for any single worker during the program.48
There are three steps a recipient must unde1iake when utilizing this category: 49 (1) Identify an eligible worker. Eligible worker is defined as one who is "needed to maintain continuity of operations of essential critical infrastructure sectors." In addition to the list provided by Treasury, the chief executive of the recipient may designate additional non-public sectors as critical "so long as doing so is necessary to protecting the health and wellbeing of the residents." The list of eligible workers from Treasury is:
./ Health care
./ Emergency response
./ Sanitation, disinfection & cleaning
"' Maintenance
./ Grocery stores, restaurants, food
production, and food delivery
./ Pharmacy
./ Biomedical research
./ Behavioral health
./ Medical testing and diagnostics
./ Home and community-based health care
or assistance with activities of daily living
./ Family or child care
" Social services
./ Public health
./ Mortuary
./ Critical clinical research, development,
and testing necessary for COVID-19
response
./ State, local, or Tribal government
workforce
./ Workers providing vital services to
Tribes
./ Educational, school nutrition, and other
work required to operate a school
facility
"' Laundry
./ Elections
./ Solid waste or hazardous materials
management, response, and cleanup
./ Work requiring physical Interaction with
patients
" Dental care
./ Transportation and warehousing
./ Hotel and commercial lodging facilities
that are used for COVID-19 mitigation
and containment
(2) Verify the worker perf 01ms/performed essential work. To be essential work, the work must be in person (no telework permitted) and it involves either regular, in-person interactions with patients, the public or coworkers of the individual performing the work or regular physical handling of items that were 45 Final Rule at 4396-7. 46 Id. at 4339.
41 Id.
48 Id. 49 Overview of the Final Rule, pg. 35-6.
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handled by, or are to be handled by patients, the public, or coworkers of the individual performing the work.
(3) Confirm the premium pay responds to the eligible worker's eligible work during the COVID-19 public health emergency. Recipient may provide premium pay without a written justification if: (i) the eligible worker is earning (with premium pay) at or below 150 percent of their residing state or county's average annual wage for all occupations, as defined by the Bureau of Labor Statistics' Occupational Employment and Wage Statistics, whichever is higher, on an annual basis; or (ii) eligible worker receiving premium pay is not exempt from the Fair Labor Standards Act overtime provisions.
50 Premium pay may not be used to reimburse the recipient for premium pay or hazard pay already given to the worker. Further, a volunteer may not be an eligible worker. Lastly, elected officials may not receive premium pay.5 1
E. Invest in water, sewer, and broadband infrastructure Recipient may utilize ARP A Funds for eligible water, sewer, and broadband investments.52 Water and sewer projects are eligible if they are eligible for the Clean Water State Revolving Loan Fund and the Drinking Water State Revolving Loan Fund. 53 In addition, the Final Rule permits the use of funds for stormwater infrastrncture, residential wells, lead remediation, and certain rehabilitations of dams and reservoirs if it is found to be necessary, as defined by the final rule. 54 Necessary is defined by the Final Rule as (1) responsive to an identified need to achieve or maintain an adequate minimum level of service, which may include a reasonable projection of increased need, whether due to population growth or othe1wise, (2) a cost-effective means for meeting that need, taking into account available alternatives, and (3) for investments in infrastrncture that supply drinking water in order to meet projected population growth, projected to be sustainable over its estimated useful life. 55
The Final Rule expands the use of funds for broadband infrastrncture. 56 There are three steps a recipient must undertake when utilizing funds for broadband infrastrncture: (i) identify an eligible area for investment; (ii) design a project to meet high-speed technical standards; and (iii) require emollment in a low-income subsidy program. 57
50 Id. pg. 36.
5I Final Rule at 4400. 52 Id. at 4339. 53 Overview of the Final Rule, pg. 37-8. 54 Id.
55 Final Rule at 4408. 56 Id. at 4339. 57 Id. at 441 8. - 11 -
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An eligible area for investment is one without access to a reliable wireline 100 Mbps download and 20 Mbps upload, additional areas may be identified as those with lack of access, lack of affordable broadband, and/or lack of reliable service. 58 When pursuing a project outside of the 100/20 parameters, the recipient must ensure that the funds are used to address an identified need for an additional broadband investment that is not met by existing federal or state funding commitments and also ensure the funds will not be used for costs that will be reimbursed by other federal or state programs.59
A recipient must require providers of an ARP A broadband project to household to participate in the FCC's Affordable Connectivity Program or provide access to a broad-based affordability program to low-income consumers that provides benefits similar to the FCC's Affordable Connectivity Program. 60
F. Uses beyond those enumerated
As discussed in Section A and Section B of this memorandum, Treasury has provided enumerated uses for the public health expenditure and negative economic impact categories, and for uses beyond those enumerated, Treasury has provided a framework for recipients: 61 Step 1. Identify COVID-19 public health or 2. Design a response that addresses or economic impact responds to the impact
Analysis Can identify impact to a specific • Types of responses can include a • household, business or nonprofit or to program, service, or capital a class of households, businesses or expenditure
nonprofits (i.e., group) • Response should be related and • Can also identify disproportionate reasonably proportional to the harm impacts, or more severe impacts, to a • Response should also be reasonably specific beneficiary or to a class designed to benefit impacted I individual or class
When utilizing ARP A Funds beyond an enumerated use, recipients must ensure that the use is reasonably proportional and related to the identified impact. Treasury has defined reasonably proportional as "the scale of the response compared to the scale of the harm, as well as the targeting of the response to beneficiaries compared to the amount of the hmm experienced. "62 58 Id.
59 Overview of the Final Rule, pg. 39. 6
° Final Rule at 4418. 61 Overview of the Final Rule, pg. 32. 62 Id. pg. 34. - 12 -
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G. Capital expenditures
The ARP A Final Rule states that a capital expenditure project "must be related and reasonably proportional to the pandemic impact identified and reasonably designed to benefit the impacted population or class.63 The below identifies when a written justification is or is not required for a capital expenditure: 64
If a project has and the use is enumerated by Treasury and the use is beyond those total capital as eligible, then enumerated by Treasury as eligible, expenditures then
of
Less than $1 No Written Justification required No Written Justification required million
Greater than or
equal to $1 Written Justification required but
million, but recipients are not required to submit as
less than $10 part of regular reporting to Treasury Written Justification required and million recipients must submit as part of regular
Written Justification required and reporting to Treasury $10 million or recipients must submit as part of regular more reporting to Treasury H. Restriction on the use of funds
ARP A Funds may not be used by deposit into any pension fund; to service debt or replenish financial reserves; to satisfy a settlement or judgment (unless the settlement requires recipient to provide a service or incur other costs that are an eligible use of ARP A funds, then the funds may be used for that); and may not use the funds for projects that conflict with the purpose of ARP A and its accompanying guidance - for example programs or conditions that may worsen the public health crisis. 65
63 31 C.F.R. § 35.6(b)(l)(ii). 64 Overview of the Final Rule, pg. 30. 65 Id.. pg. 41-2. - 13 -
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ANALYSIS OF CITY'S SPECIFIC SPEND-PLAN
(1) Eligible
• Essential Worker Relief Program
This would be eligible if done within the parameters of the premium pay eligible use category of ARP A. 66
• Emergency Response Equipment
• Update Traffic Patterns
• Airport Terminal Repair
These would be eligible if done as general government services, utilizing the lost revenue category. 67
(2) Eligible if Addressing Public Health or Economic Disparities • Indoor Ventilation/Filtration for City Facilities
This may be an eligible expense if it is addressing public health and a response, mitigation, and prevention of COVID-19. 68
• Recreation Infrastructure Projects
This may be an eligible expense if it is addressing a negative economic impact for disproportionately impacted communities.
• Downtown Free WiFi Zone
• Free WiFi in Public Facilities
This is an eligible expense if the broadband connection is for those who are disproportionately negatively impacted by the COVID-19 public health emergency. It would be important for use under this category for the City to document how the use aligns with the statute and Final Rule and their intentions.
66 31 C.F.R. § 35.6(c).
67 31C.F.R.§35.6(d). 68 Final Rule at 4350.
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(3) Requiring Further Clarification or Explanation
• Complete Downtown Rehabilitation including pedestrian friendly downtown zone and new commercial space for new/existing small and microbusinesses This may be an eligible expense but the specific actions under this broad category would need to be identified.
Treasury enumerated an eligible use in disproportionately impacted communities includes the development of "neighborhood features that promotes improved health and safety outcomes, such as parks, green spaces, recreational facilities, sidewalks, pedestrian safety features like crosswalks, projects that increase access to health foods, sh·eetlights, neighborhood cleanup, and other projects to revitalize space."69 Of pmticular note, Treasury states that general infrastrncture development, including street or road constrnction, remains generally ineligible and as such sidewalks and pedesh"ian safety should be the prominent component of use under this category.
Treasury acknowledges that constrnction may be ancillary to the prominent, but that specifically "a project that predominantly involves street construction or repair to benefit vehicular traffic would be ineligible. "70
Treasury recognizes that vacant or abandoned properties leads to an increase in public health disparities and higher rates of crime. 71 Therefore, Treasury pe1mits the following: (i) rehabilitation, renovation, maintenance, or costs to secure vacant or abandoned properties to reduce their negative impact; (ii) costs associated with acquiring and securing legal title of vacant or abandoned properties and other costs to position the prope1ty for current or future productive use; (iii) removal and remediation of environmental contaminants or hazards from vacant or abandoned properties, when conducted in compliance with applicable environmental laws or regulations; (iv) demolition or destruction of vacant or abandoned buildings (including residential, commercial, or industrial buildings) paired with greening or other lot improvements as patt of a strategy for neighborhood revitalization; (v) greening or cleanup of vacant lots, as well as other efforts to make vacant lots safer for the surrounding c01mnunity; (vi) conversion of vacant or abandoned properties to affordable housing; (vii) inspection fees and other administrative costs incurred to ensure compliance with applicable environmental laws and regulations for demolition, greening, or other remediation activities. 72 As noted above, there are specific uses that are enumerated for assistance to small businesses in disproportionately impacted communities, which may be a component of this section. With more specifics from the City, this may be an eligible use. 69 Id. at4373 .
10 Id. 71 Id. at 4374. 72 Id.
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• Wraparound Homeless Rehabilitation Services
This may be an eligible expense under the addressing negative economic impact on impact communities category. Since this use is not enumerated, the City will need to pe1fonn a non-enumerated use analysis. To understand whether or not the use would be enumerated, it is imp011ant to get a more specific plan for this use. • Outreach Specialist
The Final Rule allows for the City to bolster public sector capacity and ability to deliver services. In order to determine the eligibility, it is important to understand the full time employment levels of the City pre-pandemic and how this role would or would not fit m.
• Library Infrastructure Project
In order to determine the eligibility of this spend-plan, more specifics of this specific item is required.
• Upgrade City Broadband Infrastructure
In order to determine the specific eligibility category for this item, some more specifics are required. If the infrastrncture is to assist the city in providing services there is the ability for the City to utilize ARP A funds. If there is another purpose, it may still be eligible, but more specifics are required.
• Water/Sewer Replacement Projects
As long as the water/sewer replacement projects are Clean Water State Revolving Loan Fund or Drinking Water State Revolving Loan Fund eligible than this would qualify.
73 As describe above, if the project is not eligible in the SRF programs, it may be eligible if it fits under the expanded definition. Without knowledge of the specific projects sought to be done under this category, more analysis cannot be provided. ( 4) Ineligible
Based on the information provided by the City of Calexico, each proposed project has an opportunity to be eligible at this time.
73 31 C.F.R. § 35.6( e ).
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CONCLUSION
Based on a review of the American Rescue Plan Act, the Interim Final Rule, the Final Rule, and the accompanying guidance, the following projects would be eligible for use of ARP A Funds:
• Essential Worker Relief Program
• Emergency Response Equipment
• Update Traffic Patterns
• Airport Terminal Repair
Based on a review of the American Rescue Plan Act, the Interim Final Rule, the Final Rule, and the accompanying guidance, the following projects would be eligible for use of ARP A Funds provided the City makes finding that the projects are designed to address public health and/or economic disparities:
• Indoor Ventilation/Filtration for City Facilities
• Recreation Infrastructure Projects
• Downtown Free WiFi Zone
• Free WiFi in Public Facilities
The following projects require fmther clarification or explanation to determine eligibility:
• Complete Downtown Rehabilitation including pedestrian friendly downtown zone and new commercial space for new/existing small and micro businesses • Wraparound Homeless Rehabilitation Services
• Outreach Specialist
• Library Infrastructure Project
• Upgrade City Broadband Infrastructure
• Water/Sewer Replacement Projects
Thank you for the opportunity to assist the City with this matter. Should the City have any additional questions or would like to review any of the above further, please do not hesitate to let us know.
Ana D. Schwab
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