Chula Vista City Council
July 25, 2023

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July 25, 2023

ITEM TITLE
American Rescue Spending Plan: Amend the American Rescue Plan Act (ARPA) Spending Plan

Report Number: 23-0173
Location: Citywide and Project Specific at 1160 Walnut Avenue Department: Finance
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.

Recommended Action
Adopt a resolution: A) amending the Fiscal Year 2023/24 budget, B) amending the Fiscal Year 2023/24 CIP program budget, C) amending the American Rescue Plan Act (ARPA) Spending Plan; D) establishing CIP project GGV0270 and appropriating $13.0 million for acquisition and renovation of Palomar Motel. (4/5 Vote Required)

SUMMARY
On May 10, 2021, the U.S. Department of the Treasury announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, to provide $350 billion in emergency funding for eligible state, local, territorial, and Tribal governments. The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each jurisdiction to meet local needs, including support for households, small businesses, impacted industries, essential workers, and the communities hardest-hit by the crisis. The se funds also deliver resources that recipients can invest in building, maintaining, or upgrading their water, sewer, and broadband infrastructure.

The City received a total of $57.5 million in American Rescue Plan Act funds, which was appropriated by the City Council with the initial plan presented on August 24, 2021 and the fiscal year 2022-23 adopted budget.

Several amendments to the Plan have since been made by staff to address critical City needs. This action proposes amendments of the ARPA Spending P lan; reallocating $13.0 million in previously appropriated American Rescue Plan Act funds for the purchase of the Palomar Motel and amending the Spending Plan to reallocate various projects to the Revenue Recovery expenditure category.

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ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because the proposed activity consists of a governmental fiscal/administrative activity which does not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.

BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable

DISCUSSION
On May 10, 2021, the U.S. Department of the Treasury (“Treasury”) announced the launch of the Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”), established by the American Rescue Plan Act of 2021 (“ARPA”), to provide $350 billion in emergency funding for eligible state, local, territorial , and Tribal governments. The Treasury also released details on how these funds can be used to respond to acute pandemic response needs, fill revenue shortfalls among these governments, and support the communities and populations hardest-hit by the COVID-19 crisis.

Eligible jurisdictions have been able to access this funding to address immediate pandemic response needs, such as: recover revenue losses, basic emergency needs, bring back jobs, and lay the groundwork for a strong and equitable recovery. These funds present a significant opportunity for our community to meaningfully address the pandemic’s disproportionate toll on people of color, people with disabilities, immigrant communities, low-income households, and other historically marginalized groups, including the homeless population. Treasury released the final rule, a set of regulations for the Coronavirus State and Local Fisc al Recovery funds program, which provides resources to state, local, and tribal governments to respond to the pandemic and its economic effects. The final rule governs the eligible and ineligible use of SLFRF funds.

Eligible Uses:
o Responding to the public health and negative economic impacts of the pandemic (which includes several sub-categories)
o Providing premium pay to essential workers through April 10, 2023 o Providing government services to the extent of revenue loss due to the pandemic, and o Making necessary investments in water, sewer, and broadband infrastructure Ineligible Uses:
o Directly or indirectly offset reduction in net tax revenues o Contribute to rainy day fund, financial reserves of similar funds o Deposits into any pension fund, and
o Payment of interest or principal on outstanding debt instruments incurred prior to March 3, 2021 Treasury has released subsequent updates to final rule guidance, most recently in July 2022 expanding the eligibility of ARPA funding for affordable housing production and preservation; and in June 2023 informing P a g e | 3
recipients that premium pay to eligible workers may not be used effective April 10, 2023 , due to the end of the National Emergency.

ARPA Funds must be obligated (when referencing a recipient’s or subrecipient’s use of funds under a Federal award, “obligated” means orders placed for property and services, contracts and subawards made, and similar transactions that require payment ) by December 31, 2024 and expended by December 31, 2026. Project expenditure reports are submitted to Treasury quarterl y. An overarching Recovery Plan with project updates is submitted to Treasury annually and made available on the City’s website. The 2023 Recovery Plan will be available in late July.

The City received a total of $57.5 mi llion, which was appropriated by the City council with the initial plan presented on August 24, 2021 and the fiscal year 2022 -23 adopted budget. Subsequent to the initial allocation, Spending Plan amendments have been approved by City Council as critical needs increase and are identified in response to the pandemic and to incorporate recent updated guidance from Treasury.

The amendments to date include:

City of Chula Vista - ARPA Spending Plan Amendments
Amendment No. & Description
Resolution
No.

Expenditure Category (EC) &
Project Name Amount
Amendment No. 1
Jacobs and Cushman San Diego
Food Bank allocation to provide
food distribution services.
2021-213
EC 2 - Economic Development: Choose
Chula $(100,000)

EC 2 - Negative Economic Impacts: Jacobs
and Cushman San Diego Food Bank $100,000

Amendment No. 2
Alpha Project - Take Back the
Streets allocation to provide job
training and placement to
previously homeless individuals.
2021-228
EC 2 - Economic Development: Choose
Chula $(100,000)

EC 2 - Negative Economic Impacts: Alpha
Project $100,000

Amendment No. 3
Homeless Supportive Services,
allocation to support the City’s
Homeless Outreach Team to
provide a continuum of services for
homeless, at risk and low-income
households.
2022-032
EC 2 - Economic Development: Choose
Chula $(100,000)

EC 2 - Negative Economic Impacts:

Homeless Supportive Services $100,000

Amendment No. 4
SBCS Domestic Violence, allocation
in the amount of $200,000
approving an associated agreement
with SBCS Domestic Violence
Program to continue providing
therapeutic counseling and crisis
intervention services to adult and
children victims of family violence.
2022-085
EC 6 - Revenue Recovery: University
Innovation $(200,000)

EC 1 - Public Health: SBCS Domestic
Violence $200,000

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City of Chula Vista - ARPA Spending Plan Amendments
Amendment No. & Description
Resolution
No.

Expenditure Category (EC) & Project
Name Amount
Amendment No. 5
Reallocation from the Loma Verde
Community Center (GGV0247) to
the provision of Revenue Recovery -
General Government Services due
to other available funding sources
for this project, as part of the Fiscal
Year 2022-23 Adopted Budget.
2022-121
EC 6 - Revenue Recovery: Loma Verde
Community Center $(2,000,000)

EC 6 - Revenue Recovery: General
Governmental Services $2,000,000

Amendment No. 6
Reallocation from the Revenue
Recovery – General Governmental
Services to the Casa Casillas project
(GGV0262).
2022-257
EC 6 - Revenue Recovery: General
Governmental Services $(1,450,000)

EC 6 - Revenue Recovery: Casa Casillas $1,450,000

Amendment No. 7
A) Reallocation of $600,000 from
the HVAC project (GGV0261),
$400,000 to Casa Nueva Vida
Domestic Violence Shelter; and
$200,000 to the SBCS Domestic
Violence project.

B) Reallocation of $100,000 from
Revenue Recovery – General
Government Services to the Jacobs
& Cushman San Diego Food Bank
project.
2023-038
EC 1 - Public Health: HVAC $(600,000)

EC 1 - Public Health: SBCS Domestic
Violence $400,000

EC 1 - Public Health: Casa Nueva Vida DM
Shelter $200,000

EC 6 - Revenue Recovery: General
Governmental Services $(100,000)

EC 1 - Public Health; Jacobs and Cushman
San Diego Food Bank $100,000

Amendment No. 8
Reallocation from the COVID-19
Testing project to the Homeless
Support Services and Alpha Project
– Take Back the Streets projects.
2023-061
EC 1 - Public Health: COVID-19
Testing/Vaccinations $(200,000)

EC 2 - Negative Economic Impacts: Alpha
Project $100,000

EC 2 - Negative Economic Impacts:

Homeless Supportive Services $100,000

Amendment No. 9
Reallocation from the Revenue
Recovery – General Governmental
Services to the Eucalyptus Park
Renovation project
2023-074
EC 6 - Revenue Recovery: General
Governmental Services $(3,522,558)

EC 2 - Negative Economic Impacts:

Eucalyptus Park Renovation $3,522,558

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Current ARPA Spending Plan and Status of Projects
The following are the City of Chula Vista ARPA Spending Plan Expenditure Categories (EC):
 Public Health (EC -1): To provide resources to meet and address emergent public health needs, including through measures to counter the spread of COVID -19, through the provision of care for those impacted by the virus, and through programs or services that address disparities in public health that have been exacerbated by the pandemic.

o Heating Ventilation and Air Conditioning ($17.9 million) – Not Started:

ARPA funding to replace major components of the HVAC system at Police Headquarters was originally appropriated on August 24, 2021 , in the amount of $18.5 million. The original appropriation amended the fiscal year 2021-22 budget for CIP Project GGV0261 in the ARPA Fund.

The ARPA funding will allow the City to address a major capital need and install a system that allows for a highe r level of air filtration at a key 24/7 public safety facility providing protection against viruses through the enhanced air filtration unit.

The initial scope of the project was a complete replacement of the HVAC system at the Police Headquarters. As we have moved into the design phase and began to work with the consultant it was determined that a repair and replacement of specific failing sections/parts is a more cost -effective approach to updating the HVAC system. Staff is currently working with a contractor on the scope of the project and a revised cost estimate, but it is expected to be significantly lower than the original estimate, leaving monies available for reprogramming.

On March 28, 2023, through Resolution 2023 -038, $600,000 from this project was reallocated within the Public Health Category to fund an existing SBCS Domestic Violence program and to create the new Casa Nueva Vida Domestic Violence Shelter Operations project, leaving a remaining balance of $17.9 million.

 This action requests the reallocation of $ 7.9 million and reducing the CIP budget of HVAC CIP project GGV0261 for the purchase of Palomar Motel.  This action requests the reallocation of $10.0 million CIP budget of HVAC CIP project GGV0261 from the Public Health Category to the Revenue Recovery Category.

o COVID Testing/Vaccinations ($1.04 million) – Completed Projects:

On March 13, 2020, the President declared the COVID-19 pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, tribes, te rritories, and the District of Columbia pursuant to section 501 (b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 -5207 (the “Stafford Act”). Chula Vista was one of the first City’s in San Diego County to proclaim a local emergency due to COVID -19. In response to the disproportionate impact of the pandemic on the South Bay and to better serve P a g e | 6
and protect the community, the City of Chula Vista opened a City-run public COVID-19 testing site, free to Chula Vista and the surrounding communities.

The City allocated $900,000 toward COVID -19 testing and $335,250 toward COVID -19 vaccination programs to hire staff, purchase testing materials (including personal protective equipment), and address miscellaneous costs as they ar ise. Miscellaneous costs included registration system software, paper materials, courier services, etc. After nearly three years, the State of California and the County of San Diego ended the COVID -19 emergency proclamation on February 28, 2023. The City’s testing and vaccinations program came to an end on that same date, leaving a $1.04 million in funds available for reallocation.

On May 23, 2023, through Resolution 2023 -061, $200,000 from these projects was reallocated to the Negative Economic Impacts eligible use category (EC-2), leaving a remaining balance of $ 851,868 available for reallocation. With these projects ending, no additional expenditures related to COVID-19 testing and vaccinations are anticipated.

 This action requests the reallocation of $851,868 to ARPA General Governmental Services under Revenue Recovery and close out of the COVID Testing and Vaccination projects.

o SBCS Domestic Violence ($0.4 million) – In process:

On April 26, 2022, through Resolution 2022-085, the City Council approved the creation of a new ARPA project, reallocating $200,000 from the Revenue Recovery Category to the Public Health Category and delivering critical assistance to victims of domestic violence. The Program provides a Domestic Violence Response Team (“DVRT”) for emergency response via a 24-hour assistance hotline with access to emergency shelters, strengths-based assessments and safety planning for victi ms and their children; individual counseling and group/family counseling; unique therapeutic pre-school (Mi Escuelita); and ongoing case management and support for victims.

On March 28, 2023, through Resolution 2023 -038, $200,000 was reallocated within t he Public Health Category from CIP budget of HVAC CIP project GGV0261 to fund the SBCS Domestic Violence program. This project is currently ongoing and is anticipated to be completed by April 1, 2024.

o Casa Nueva Vida Domestic Violence Shelter ($0.4 million) – In Process:

On March 28, 2023, through Resolution 2023 -038, $400,000 was reallocated within the Public Health Category from CIP budget of HVAC CIP project GGV0261 to fund the Casa Nueva Vida Domestic Violence Shelter operations. Casa Nueva Vida offer s the only sho rt-term shelter/housing program for homeless families (with children) in the South Bay region, including victims of domestic violence.

 Negative Economic Impacts/Economic Development (EC-2): To provide resources responding to the negative ec onomic impacts, to households and individuals; small businesses and non -profits; P a g e | 7
State, Local and Tribal governments; and to address the exacerbation of pre -existing disparities, particularly pronounced in certain communities and families of low- and moderate income who were disproportionately affected by the pandemic.

o Jacobs and Cushman San Diego Food Bank ($0.2 million) – In Process:

On November 16, 2021 , City Council approved the reallocation of $100,000 from the Economic Development category to the Pu blic Health category specifically to create a new project. The Jacobs & Cushman San Diego Food Bank has been on the front lines of the Coronavirus crisis since the pandemic hit our community in March 2020. Along with volunteers and a network of nonprofit partners, they have been providing emergency food assistance to individuals and families impacted by the pandemic. With this allocation of funding and working closely with over 35 Chula Vista nonprofit partners, the San Diego Food Bank will ensure that the City of Chula Vista continues to provide assistance to our neighbors in need. On March 28, 2023, through Resolution 2023 -038 City Council approved a reallocation of funds from the Revenue Recovery category in the amount of $100,000 to continue providing crucial nutrition to all Chula Vista residents in need, as individuals and families recover from pandemic impacts through the end of March 31, 2024.

o Alpha Project – Take Back the Streets ($0.2 million) – In Process:

The City’s Homeless Outreach Team conducted a “point-in-time” count in August 2021 that revealed the homeless population had doubled from the last official count in 2019. The significant rise in homelessness is attributed to the impacts of the COVID -19 pandemic and has resulted in a rise of trash and debris in public spaces, including parks and streets.

On December 7, 2021, City Council approved the reallocation of $100,000 from the Economic Development Category to the Negative Economic Impacts Category to fund the Alpha Project (Take Back the Streets), an employment program that provides job opportunities to formerly homeless individuals and assist City staff in maintaining clean and safe public spaces. The program serves as a catalyst for homeless people who are able to work, providing them with immediate transitional employment and training while providing the community with vital services through the removal of over one million pounds of trash and debris.

o Homeless Supportive Services ($0.2 million) – In Process:

On February 8, 2022 City Council approved the reallocation of $100,000 for the creation of the Homeless Supportive Services program. The new program supports the ongoing efforts by the City’s Homeless Outreach Team (HOT) to provide a continuum of services for homeless, at ri sk and low -income households. The program is designed to work in tandem with the City’s housing programs by offering unique, individual assistance required by the homeless individual to reach stable housing and increasing levels of self-sufficiency.

On May 23, 2023, City Council approved the reallocation of $100,000 from the Public Health category to continue supporting the efforts of this program.

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o Eucalyptus Park Renovation ($3.5 million) – Not Started:

On June 6, 2023, City Council approved the reallocation of $3,522,558 from the Revenue Recovery – General Governmental Services to the Eucalyptus Park Renovation CIP project (PRK0340). Eucalyptus Park was the first park built within the City of Chula Vista, opening to the public in 1927. It is a 19.69-acre community park which serves the northwestern area of Chula Vista and is heavily utilized by the community. Renovating Eucalyptus Park will provide the community with expanded recreation offerings and enhanced amenities. Planned renovations to Eucalyptus Park are estimated to cost approximately $8.7 million. Of this amount, $5.2 million will be funded by a Statewide Park Program grant, leaving a funding shortfall of $3.5 million.

As Treasury issued furthe r guidance in the final rule clarifying that “investments in parks, public plazas, and other public outdoor recreation spaces may be responsive to the needs of disproportionately impacted communities by promoting healthier living environments” the shortfall of $3.5 million for Eucalyptus Park will be funded by ARPA funds. These funds present a significant opportunity for our community to meaningfully address the pandemic’s disproportionate toll on people of color, people with disabilities, immigrant communi ties, low-income households, and other historically marginalized groups, including the homeless population.
 This action requests the reallocation of $3.5 million CIP budget of Eucalyptus Park project PRK0340 from the Negative Economic Impacts Category to t he Revenue Recovery Category.

o Small Business Grant Program ($2.6 million) – Completed:

In summer 2020, as part of inclusive economic development research and pandemic recovery efforts, surveys were sent to residents and business owners to better understand the impacts of the pandemic. Over 576 business owner surveys were received, and 794 community surveys were received which detailed the immediate needs of businesses and the community during the pandemic. The make -up of respondents and their expressed ne eds was used to inform the program framework and requirements for the Chula Vista CARES Small Business Grant Program which funded 279 small businesses.

In summer 2021, a survey was sent to 7,636 businesses with email addresses on file and 180 survey resp onses were received. Most respondents indicated they would like funds to replenish depleted reserves, cover payroll, rent, equipment, and other debt that has accrued during the pandemic.

The City executed an agreement with the San Diego Foundation to adm inister the grant program on the City’s behalf. As the program administrator the San Diego Foundation received the $2.6 million in funding and provided $1.0 million in matching funds, for a total of $3.6 million in total support.

The application period f or business and nonprofits began in August 2022 and closed on October 2022. Total applications received from small business was 848 and 102 from nonprofits. Grant awards of $10,000 each were disbursed to selected applicants during the P a g e | 9
last two weeks of Dec ember 2022 and finalized disbursements during the first quarter of 2023.

o Choose Chula App ($0.1 million) – Completed Project:

Small businesses were disproportionately impacted by the pandemic and providing support to aid in their equitable economic recovery is critical. Staff sought creative ways to bolster a circular economic recovery, increase consumer confidence and provide businesses with marketing support, a key area of help identified in a citywide business survey. To meet those needs, the Choose Chula small business support app pilot program launched June 15, 2021 , with the state-wide reopening.

In the first month of the soft launch, over 100 applications were received resulting in 89 businesses being admitted into the app and there were over 1,500 app downloads. ARPA funds were directed towards technology optimization, administration , and marketing costs for the program as well as funding the rewards budget that rewards app users with digital Chula Points.

o Curb and Sidewalk Café Grants ($0.2 million) – Completed Project:

At the July 13, 2021 , City Council meeting the City Council approved a process to create attractive and accessible curb cafes and sidewalk cafes along the Third Avenue corridor and to offset the cost to permit and construct these facilities and appropriated ARPA funds that are dedicated to a reimbursement grant program for these facilities.

 This action requests the reallocation of $ 51,951 of previously appropriated ARPA funds, to the ARPA General Governmental Services under Revenue Recovery and close out of the project.

 Premium Pay to Essential Workers (EC -3): California Government Code declares all government employees Disaster Service Workers who can be called upon in any emergency. Premium pay is designed to compensate workers that, by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID -19 pandemic.

Premium pay can be thought of as hazard pay by another name. Treasury’s final rule emphasized the need for recipients to prioritize premium pay for lower income workers and requires specific justification for how it responds to the needs of these workers. In addition, employers were both permitted and encouraged to use Coronavirus State and Local Fis cal Recovery Funds to offer retrospective premium pay, recognizing that many essential workers have not yet received additional compensation for work performed. As noted above, due to the end of the National Emergency, Treasury has updated its guidance and effective April 10, 2023 , ARPA funds may no longer be used for premium pay to eligible workers.

o Premium Pay to Essential Workers ($3.55 million) – Completed Project:

Since March 2020 City employees were called on to respond to the pandemic in both their normal work duties and a variety of activities that are outside of their normal duties (food distribution, COVID testing and vaccination scheduling and site management). Essential P a g e | 10
Worker Premium is to recognize workers performing essential duties during th is public health emergency. Due to the end of the National Emergency, Treasury has updated its guidance and effective April 10, 2023 , ARPA funds may not be used for premium pay to eligible workers, this program has therefore been completed and reporting fi nal expenditures of $2.5 million.

 This action requests the reallocation of $1,096,000 previously appropriated ARPA funds to the ARPA General Governmental Services under Revenue Recovery and close out of the Premium Pay to Essential Workers project.

 Infrastructure (EC-5): To assist in meeting the critical need for investments and improvements to existing infrastructure in water, sewer, and broadband, the Fiscal Recovery funds provide funds to make necessary investments in these sectors. Allowing for a broad range of necessary investments in projects that improve access to clean drinking water, improve wastewater and stormwater infrastructure systems, and provide access to high-quality broadband service.

o Broadband Design ($0.9 million) – Not Started:

As part of stakeholder engagement for the development of the City’s Digital Equity & Inclusion Plan (DEIP), the City of Chula Vista hosted multiple workshops with key community stakeholders to better understand the local digital divide and to uncover oppor tunities for collaboration on digital equity projects. The first workshop was conducted in July 2019 and included over 50 attendees throughout the San Diego region, including community -based organizations, academic institutions, regional agencies, private businesses, and city staff. In January 2020, the city conducted the second workshop. At this workshop, the City was able to gain feedback from practitioners that advocate on behalf of the needs of a wide group of the city’s population and tailor strategies for the DEIP. The list of workshop attendees included the regional public agencies, academic institutions, non -profits and private sector, including SANDAG, Port of San Diego, San Diego Airport, City of Carlsbad, Chula Vista Elementary School District, T-Mobile, AT&T, Verizon, Cleantech San Diego, Computers 2 Kids, and the San Diego Futures Foundation. This item will begin implementing the City’s Digital Equity and Inclusion Plan and Telecommunications Master Plan by getting engineering and construction documents prepared that will be able to provide high-speed WIFI to the public at all City facilities in the future. Staff will look to future grant opportunities of the proposed Federal infrastructure bill to fund construction.

 This action requests the reallocation of the Broadband Design project GGV0263, from the Infrastructure Category to the Revenue Recovery Category.

 Revenue Recovery (EC-6): An eligible use of ARPA funding is the replacement of revenue loss of local governments due to the COVID-19 public health emergency. This use ensures continuity of vital government services by filling pandemic-caused budget shortfalls. ARPA fund recipients ca lculate and report revenue loss annually according to the formula outlined in the final rule, supporting those entities that experience a lagged impact of the crisis on revenues. Per the final rule, upon update, any prior revenue loss election will be superseded.

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The City has calculated and submitted to Treasury updated revenue loss amounts annually using audited financial data and reported the following revenue loss: Calendar Year 2020 $31.9 million; Calendar Year 2021 $30.2 million and most recently for Calendar Year 2022 $57.7 million.

Importantly, once a shortfall in revenue is identified, recipients will have broad latitude to use this funding to support government services, up to this amount of lost revenue. As of the April 2023 reporting period, the City’s revenue loss amount has surpassed the total awarded amount and therefore is allowed to use the entirety of ARPA funds under the revenue Recovery eligible use category.

The specific uses of these funds are identified in the following section. These funds are not allowed to fund the following:
o Directly or indirectly offset reduction in net tax revenues; o Contribute to rainy day fund, financial reserves of similar funds; o Deposits into any pension fund;
o Payment of interest or principal on outstanding debt instruments incurred prior to March 3, 2021;
o Premium Pay to Essential Workers after April 10, 2023.

 Operational Support
o Development Services Fund Revenue Replacement ($1.0 million) – In Process:

This funding will be used to offset personnel and contract costs incurred by the Development Services Fund in providing public services. Such services include providing permitting and code information to the general public, as well as processing and issuing various permits and conducting related inspections. Funds also will be used to digitize permit records, increasing ease of access to public records, and to support continued automation efforts, increasing permitting efficiency.

o Covid Premium Pay (Non-Safety) ($2.60 million) – Completed Project:

California Government Code declares all government employees Disaster Service Workers who can be called upon in any emergency. Since March 2020 City employees were called on to respond to the pandemic in b oth their normal work duties and a variety of activities that are outside of their normal duties (food distribution, COVID testing and vaccination scheduling and site management). Essential Worker Premium is to recognize workers performing essential duties during this public health emergency. Amounts were negotiated with labor groups and disbursed to essential workers per the various memorand a of understanding (MOUs).

Effective April 10, 2023 , ARPA funds may not be used for premium pay to eligible workers , the project has therefore been completed and reporting final expenditures of $2.35 million.

 This action requests the reallocation of $247,750 previously appropriated to the ARPA General Governmental Services under Revenue Recovery and close out of the COVID Premium Pay project.

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o New positions/Public Works Project Management– In Process:

A number of new positions, as detailed in the table below, were added to the General Fund staffing to permanently support operations and the delivery of projects. These positions are funded initially by unrestricted reimbursement from ARPA. The position in the Information and Technology Department of 1.0 Cyber Security Analyst was filled in September 2022. This position is critical to manage and protect the citywide network as we begin to implement the Telecommunications Master Plan, to significantly strengthen the City’s information security posture and ensure alignment with the National Institute of Standards and Technology (NIST) to help thwart cyber security threats su ch as Ransom Ware attacks on the City’s critical infrastructure. The annual estimated cost for this position is $156,820.

The position in the Finance Department of 1.0 Sr. Management Analyst was filled in June 2021. The position is coordinating ARPA repor ting and compliance requirements on behalf of the City. Ensuring APRA spending complies with all applicable program rules, providing technical support to other City departments, coordinating reporting to the Department of Treasury and assisting with related program audits. This position also serves as a permanent central grant coordinator. The annual estimated cost for this position is $141,994.

The positions in Public Works were added due to the time constraints associated with ARPA monies and the need to deliver projects at a faster pace and to address high priority projects.

A Project Management team was established in the Public Works Department in order to centralize project management, c reating a more efficient project delivery method. The Project Management team is comprised of 1.0 Building Services Manager, 2.0 Building Project Managers, and 1.0 Management Analyst.

Given the spending deadlines associated with the ARPA funding requiring prompt project delivery, additional positions were added to support the increase in the Capital Improvement Program and not affect service delivery of other projects, including Measure P and the Bayfront development. The following positions and associated equipment were added to the Construction Inspection Section: 1.0 Senior Civil Engineer, 2.0 Associate Engineers, 1.0 Senior Building Inspector and the reclassification of an existing Senior Engineering Technician to 1.0 Senior Fiscal Office Specialist. These positions wi ll be funded by reimbursements from various projects being delivered under ARPA, Measure P and the Bayfront development. The required equipment is estimated at $160,000 dollars, funded by unrestricted reimbursement from ARPA to the General Fund.

Department Position FTE
Public Works
Building Services Manager 1.0
Building Project Manager 2.0
Management Analyst II 1.0
Engineering/ Capital Projects
Senior Civil Engineer 1.0
Associate Engineer 2.0
Senior Building Inspector 1.0
Finance
Senior Management Analyst 1.0
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Department Position FTE

Information Technology
Chief Information Security Officer 1.0
TOTAL FTE Changes 10.0

o Administrative Expenses - San Diego Foundation ($0.1 million) – In Process:

The City entered in agreement with the San Diego Foundation to administer the Small Business Grant program on the City’s behalf and agreed upon a fee of $180,000 for program administration which included: a) administration of the grant program to provide d irect grants to economically disadvantaged and at -risk businesses and to nonprofits serving the City of Chula Vista or its residents; b) ensuring a process to obtain accurate and complete applications for grants, document applicant’s compliance with eligib ility requirements, and approve applications meeting the eligibility requirements; c) issuing or directing payments to awardees for approved applications and maintaining records of all payments.

o General Governmental Services – Not Started:

Funds made available for the provision of governmental services (to the extent of reduction in revenue due to the public health emergency) are intended to support direct provision of services to residents. Per Treasury’s final rule guidance, government services include, but are not limited to, maintenance or pay -go funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services.

 This action requests the reallocation of funds to the General Governmental Services expenditure of various ARPA projects that have been completed and have remaining budget; and the creation of new projects that will b e funded by this expenditure category.

 Infrastructure
o Main Street Fiber ($0.3 million) – Completed Less Than 50%:

The funding will allow the City to connect City facilities (Otay Recreation Center, Animal Shelter and Public Works Facility) to the existing fiber infrastructure located at City Hall. This will allow the future opportunity to provide free high speed wireless internet access to the public at the Otay Recreation Center.

o Telegraph Canyon Culvert Repair ($6.15 million) – In Process:

The need for Telegraph Canyon Channel improvements was identified as part of the Measure P Sales Tax Fund asset management program. Through assessment of risk (probability and consequence of failures), activitie s were prioritized and communicated regarding urgency and the financial and resource requirements. The Telegraph Canyon existing storm drain system is not adequate to convey water during a 100 -year peak flow event requiring P a g e | 14
significant drainage improvements to be made to protect both private and public facilities.

The project has started, the Advance Planning/Environmental and Design phase began using the last of the Telegraph Canyon Channel Drainage Impact Fee Funds. ARPA funds will allow those phases to complete as well as to construct the first Segment of improvements.

o Loma Verde Community Center ($2.0 million) – Completed Less Than 50%:

The project demolished and reconstruc ted the existing recreation center to provide the following: a new multi -purpose gymnasium, dance rooms, crafts room, fitness room, classroom space, game room, hard courts, restrooms, changing rooms, staff offices, lifeguard staff room, break room, new pool m echanical equipment, wet and dry storage, replacement pool and associated pool deck area. The Measure P Citizens Oversight Committee (COC) identified and recommended funding this project with the Measure P Sales Tax Fund. ARPA funding was allocated to supplement staff time costs to the General Fund as a secondary funding source. The project end date is anticipated in Summer 2023, and a projected total ARPA staff time expenditure amount of $235,000.

 This action requests the reallocation of $1,765,000 to the ARPA Revenue Recovery:

General Governmental Services expenditure category.

o Casa Casillas ($2.45 million) – Completed less than 50%:

The project is to develop the former YMCA space that supports an opportunity for the Chula Vista Arts Community to showca se their talent, grow their skills and support gatherings, where the community feels welcome and can experience art and culture. The focus of the building will be to create intergenerational collaborative opportunities while also supporting the development of opportunities for artists in residence.  Economic Development
o Public Arts Grant ($0.4 million) – Completed Project:

The Public Arts Grant served two purposes, the first to support the local artists who were directly impacted by the loss of the City of Chula Vista’s Performing Visual Arts Grant. Funds were disbursed to artists within the Chula Vista community, similarly to the visual arts grant program, to create/perform art within our community. The goal was to continue to promote and stimulate the gro wth of performing and cultural arts within the City of Chula Vista through a grant application process for local performing and visual arts groups and individuals. The grant fund supported art projects such as: dance, design arts, media arts, music, photog raphy, theater, traditional/folk arts and visual arts, or interdisciplinary expressions involving more than one of the above fields. The second purpose was to allocate funding for the Small Business Art Incentive Program. With a goal to support our local businesses and artists by providing an incentive for local businesses to purchase art for their businesses that are created directly from our local artists within Chula Vista to further stimulate the art economy.

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o Starlight Nights ($0.2 million) – Completed Project:

The Starlight Parade has been a cherished community event for more than 50 years and has brought tens of thousands of people to Chula Vista. The 2019 Starlight Parade attracted more than 30,000 people to Third Avenue and resulted in activating businesses, restaurants, and pubs while promoting community engagement, generating widespread media coverage and social media attention, and promoting sponsor support. Parade entries included spectacular floats and included schools, bands, dance groups, music performances, veterans and military groups, car clubs, local merchants, and more. Due to restrictions of the pandemic the City ceased hosting a parade but instead created Starlight Nights in collaboration with the Third Avenue Village Association to in stall and display holiday lights to create a festive holiday destination for residents and visitors to Third Avenue, a major business corridor in the City of Chula Vista. The installation required modification to infrastructure including : a) Modifying the decorative streetlights between E Street and H Street, inserting 120V receptable into each one to allow for decorations to be temporarily installed along the avenue; and b) Modifying the medians between E Street and Park Way to install tree rings and up-lights in palm trees.

o Equity and Inclusion ($0.2 million) – In Process:

To further advance the City’s efforts in creating a more inclusive and equitable community, culture and workplace, the City of Chula Vista has embarked on a deliberate process that coordinates and collaborates with all city departments, all levels of city staff and the community in the development of strategies and recommendations to create a Justice, Equity, Diversity and Inclusion (JEDI) Action Plan. This funding has been allocated toward third party assistance in facilitating discussions and collaborating with internal and external stakeholders in the creation of the Action Plan.

o University Innovation Center and Recruitment ($2.4 million) – Not Started:

Previously appropriated ARPA funding for this project will be reallocated to fund other ARPA projects as the City will no longer move forward with this project under ARPA fun ding. The City has been awarded State grant funding to move forward with this project.

 This action requests the reallocation of $2.41 million previously appropriated, to the Revenue Recovery General Governmental Services expenditure category.

Proposed Reallocation of Chula Vista American Rescue Plan Funds  With the Treasury’s updated guidance and input from City Departments and the community, staff is recommending the allocation of ARPA funds toward the following new projects.

o Palomar Motel ($13.0 million):

In July 2022 Treasury released updated guidance t hat allows governments to use State and Local Fiscal Recovery Funds (SLFRF) from ARPA under the final rule, for “development, repair, and operational of affordable housing and services or programs to increase long-term housing security”, an enumerated elig ible use to respond to impacts of the pandemic on P a g e | 16
households and communities. In previous guidance, presumptive eligibility for affordable housing projects was limited to The Home Investment Partnership Program (HOME) and The National Housing Trust Fund (H TF). Treasury has updated this list by adding additional programs to increase administrability and clarity in the use of ARPA funds for affordable housing purposes. The Palomar Motel acquisition and conversion will separately be considered by the City Council tonight (Item 8.1).

 This action requests the allocation of previously appropriated funds, $7.9 million from the Public Health: HVAC CIP project (GGV0269) and $5.1 million from the Revenue Recovery General Services expenditure category. A total allocation of $13.0 million for the acquisition and renovation of Palomar Motel (1160 Walnut Avenue, Chula Vista, CA 91911), to create permanent supportive housing as a significant step forward in the City’s effort to address homelessness; and provide another long-term solution to the City’s homelessness transition efforts.

o ADA Self-Evaluation and Transition Plan Update ($1.1 million):

The City is moving forward with a comprehensive Americans with Disabilities Act (ADA) self- evaluation and update to the City’s existing Transition Plan. Through this effort, the City will undergo a self-assessment of current compliance status in all City facilities and identify items that are non -compliant with Federal and State ADA Accessibility Guidelines and take the necessary steps to update the Transition Plan including the following: a) identification of barriers and prioritization of solutions; b) establish a list of City services, including a map of the path of travel to each service along the barriers to be removed in order to achieve compliance; c) cost estimates for modifications needed in order to achieve compliance with guidelines; and d) recommendations to update existing policies and to create new policies in order to achieve compliance with the Guidance.

 This action requests the creation of this new project and allocation of $1.1 million, in previously appropriated ARPA funds from the Revenue Recovery General Governmental Services expenditure category.

o Public Engagement Platform ($0.13 million):

The City is in the process of procuring an online software as a service (SaaS) public engagement platform. The implementation of a public engagement p latform will centralize and encourage public participation in City projects, programs, and initiatives while providing rich and intuitive tools for learning and collecting input from all members of the public. The City is seeking a platform that is flexible, interactive, user friendly and capable of supporting multiple public engagement projects simultaneously.

 This action requests the creation of this new project and the allocation of $128,196 in previously appropriated ARPA funds from the Revenue Recovery General Governmental Services expenditure category.

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The table below reflects staff’s recommendation for allocation of ARPA funds between categories.

City of Chula Vista - ARPA Spending Plan
FY 2022 FY 2023 FY 2024 FY 2024 Total Budget
with Proposed
Adjustments Category
Final
Budget
Final
Budget
Adopted
Budget
Proposed
Adjustments
EC 1 - Public Health 9,867,625 9,867,625 - (18,751,868) 983,382 HVAC (Project GGV0261) 9,000,000 8,900,000 (17,900,000) - COVID Testing/Vaccinations 667,625 367,625 - (851,868) 183,382 SBCS Domestic Violence 200,000 200,000 - - 400,000
Casa Nueva Vida DV Shelter - 400,000 - - 400,000
EC 2 - Negative Economic Impacts 300,000 3,822,558 - (3,522,558) 600,000 Jacobs and Cushman San Diego Food
Bank 100,000 100,000 - - 200,000
Alpha Project - Take Back the Streets 100,000 100,000 - - 200,000 Homeless Supportive Services 100,000 100,000 - - 200,000 Eucalyptus Park - 3,522,558 - (3,522,558) -
EC 2 - Economic Development 2,900,000 - - (51,951)

2,848,049
Small Business Grants 2,600,000 - - - 2,600,000
Choose Chula 100,000 - - - 100,000
Curb/Sidewalk Café Grant 200,000 - - (51,951) 148,049 EC 3 - Premium Pay to Essential
Workers 916,000 1,541,000 1,096,000 (1,096,000)

2,457,000
EC 5 - Infrastructure 900,000 - - (900,000) - City of Chula Vista - ARPA Spending Plan
FY 2022 FY 2023 FY 2024 FY 2024 Total Budget
with Proposed
Adjustments Category
Final
Budget
Final
Budget
Adopted
Budget
Proposed
Adjustments
EC 6 - Revenue Recovery 11,592,750 15,827,692 (1,096,000) 24,322,377 50,646,819 Governmental Funds 11,592,750 15,827,692 (1,096,000) 24,322,377 50,646,819 EC 7 - Administrative Expenses - - - - - TOTAL $26,476,375 $31,058,875 $ - $ - $ 57,535,250

Breakdown of Proposed Reallocation of the Revenue Recovery Category The replacement of lost revenues represents a unique opportunity to reallocate Revenue Recovery funds towards projects classified as infrastructure projects, operational support, and economic development activities in the original plan. This approach is c onsistent with the broad latitude provided to recipients to use ARPA funds for government services to the extent of the reduction in revenue due to the pandemic.

Recipients are encouraged to report based on existing budget processes and to minimize administrative burden. Utilizing the Revenue Recovery Category will allow greater flexibility , with more streamlined and less cumbersome reporting requirements.

The table below reflects staff’s recommendation for allocation of the Revenue Recovery funds:

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Governmental Fund Revenue Recovery Recommendation
FY 2022 FY 2023 FY 2024 FY24 Total Budget
with
Proposed
Adjustments Category
Final
Budget
Final
Budget
Adopted
Budget
Proposed
Adjustments
Operational Support 4,042,750 9,267,692 (1,096,000)

(114,181) 12,100,261
Development Services Fund - 1,000,000 - - 1,000,000 COVID Premium pay 692,750 1,661,250 247,750 (247,750) 2,354,000 Funding new positions 350,000 350,000 298,814 - 998,814 PW Proj Mgmt-Non CIP Proj
(PWP0001) 1,000,000 500,000 - - 1,500,000
SD Foundation Fees - 180,000 - - 180,000
General Governmental Services 2,000,000 5,576,442 (1,642,564) 94,373 6,028,251 Governmental Fund Revenue Recovery Recommendation
FY 2022 FY 2023 FY 2024 FY24 Total Budget
with
Proposed
Adjustments Category
Final
Budget
Final
Budget
Adopted
Budget
Proposed
Adjustments
Infrastructure 6,500,000 4,400,000 - 25,657,558 36,557,558 *Broadband Design (GGV0263) - - - 900,000 900,000
Main Street Fiber (GGV0258) 300,000 - - - 300,000
Telegraph Canyon Culvert Repair
(DRN0208) 3,200,000 2,950,000 - - 6,150,000
Loma Verde Community Center
(GGV0247) 2,000,000 - - (1,765,000) 235,000
Casa Casillas (GGV0262) 1,000,000 1,450,000 - 2,450,000 **HVAC (Project GGV0261) - - - 10,000,000 10,000,000 ***Eucalyptus Park Renovation
(PRK0340) - - - 3,522,558 3,522,558
> Palomar Motel (GGV0270) - - - 13,000,000 13,000,000 Economic Development 1,050,000 2,160,000 - (1,221,000) 1,989,000 Public Art Grants(Library) 400,000 - - - 400,000
Starlight Nights 200,000 - - - 200,000
Equity and Inclusion 100,000 100,000 - - 200,000
> ADA Compliance - - - 1,100,000 1,100,000
> Public Engagement Platform - - - 128,196 128,196
University Innovation
Center/Recruitment 350,000 2,060,000 - (2,410,000) - TOTAL 11,592,750 15,827,692 (1,096,000) 24,322,377 50,646,819 *Broadband Design (Project GGV0263) reallocated from Infrastructure (EC 5) Category. **HVAC (Project GGV0261) reallocated from Public Health (EC 1) Category. ***Eucalyptus Park Renovation (Project PRK0340) reallocated from Negative Economic Impacts (EC 2) Category.
> Proposed New Projects : Palomar Motel, ADA Self-Evaluation and Transition Plan Update and Public Engagement Platform.

The table below provides further detail to the adjustments proposed in the Revenue Recovery: General Governmental Services expenditure category.

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Proposed Revenue Recovery (EC-6) Adjustments
Projects Being Closed or Reallocated Amount
Public Health: COVID-19 Testing/Vaccinations (851,868) Public Health: HVAC (Project GGV0261) (7,900,000)
Loma Verde Community Center (Project GGV0247) (1,765,000) Curb and Sidewalk Café Grants (51,951)
Premium Pay to Essential Workers (1,096,000)
COVID Premium Pay (247,750)
University Innovation Center and Recruitment (2,410,000) Reallocations from Total $(14,322,569)
New Projects/Reallocation Amount
Palomar Motel (Project GGV0270) 13,000,000
ADA Self-Evaluation and Transition Plan Update 1,100,000 Public Engagement Platform 128,196
General Governmental Services 94,373
Reallocations to Total $ 14,322,569
Total Revenue Recovery Adjustments $ -

Conclusion
Staff’s proposed reallocation of ARPA funds are all allowable uses under the final rule issued by the Treasury.

The proposed reallocation was strategically created to reduce the effort to provide ongoing reporting of expenditures to the Treasury; provides the City greater flexibility in how to allocate the Revenue Recovery funds to projects and programs that are important to our community; and ensures funds are fully utilized by the program deadline. This action proposes to transfer $13.0 million in previously appropriated ARPA funds to the capital project expense category for the purchase of Palomar Motel and reallocate funds between ARPA categories as indicated in the ARPA Funding Recommendation Table. Staff will continue to monitor ARPA funding and present allocations of any remaining unobligated balance to Council in the fiscal year 2023-24 second quarter budget monitoring report for consideration. Any unobligated balance remaining after fiscal year 2023-24 will be included in the fiscal year 2024-25 budget process.

DECISION-MAKER CONFLICT
Staff has reviewed the property h oldings of the City of Chula Vista City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action.

Consequently, this item does not present a disqualifying real property -related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).

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Staff is not independently aware, and has not been informed by any Chula Vista City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.

CURRENT-YEAR FISCAL IMPACT
There is no current year fiscal impact, as the City of Chula Vista’s allocation of $57,535, 250 from the U.S.

Department of Treasury, has been previously approved and appropriated . Approving the resolution will amend the American Rescue Plan Spending Plan and reallocate funds within the American Rescue Plan Act 2021 Fund and amend CIP budget (GGV0261) and create CIP budget (GGV0270) as follows:

Fiscal Year 2024 Proposed Spending Plan Amendments
Expenditure Category (EC) & Project Name Amount

EC 1 - Public Health: COVID-19 Testing/Vaccinations (851,868) EC 6 - Revenue Recovery: General Governmental Services 851,868

EC 2 - Negative Economic Impacts: Eucalyptus Park Renovation (Project PRK0340) (3,522,558)

EC 6 - Revenue Recovery: Eucalyptus Park Renovation 3,522,558

EC 2 - Economic Development: Curb/Sidewalk Café Grants (51,951) EC 6 - Revenue Recovery: General Governmental Services 51,951

EC 3 - Premium Pay to Essential Workers (1,096,000) EC 6 - Revenue Recovery: General Governmental Services 1,096,000

EC 1 - Public Health: HVAC (Project GGV0261) (17,900,000) EC 6 - Revenue Recovery: HVAC (Project GGV0261) 10,000,000 EC 6 - Revenue Recovery: General Governmental Services (5,100,000) EC 6 - Revenue Recovery: Palomar Motel (Project GGV0270) 13,000,000

EC 1 - Public Health: HVAC (Project GGV0261) (9,000,000) EC 6 - Revenue Recovery: HVAC (Project GGV0261) 9,000,000

EC 5 - Infrastructure: Broadband Design (Project GGV0263) (900,000) EC 6 - Revenue Recovery: Broadband Design (Project GGV0263) 900,000

EC 6 - Revenue Recovery: University Innovation Center and Recruitment (2,410,000) EC 6 - Revenue Recovery: General Governmental Services 2,410,000 Net Fiscal Impact $ -

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ONGOING FISCAL IMPACT
Upon completion of the American Rescue Plan Act, the City will incur personnel costs for the new positions added to the General Fund to permanently support operations and the delivery of projects . Annual funding related to the new positions will be considered as part of the annual budget development process.

ATTACHMENTS
None
Staff Contact: Sarah Schoen, Director of Finance/Treasurer Laura Johnson, Senior Management Analyst, Finance Department