City Council Agenda Report
TO: Mayor Clauzel and Members of the City Council
FROM: Ken Irwin, City Manager
BY: Jennifer Riedeman, Finance Director
MEETING DATE: April 2, 2024
ITEM NO: 6.1
SUBJECT: Discussion and Direction for Use of Remaining American Rescue Plan Act (ARPA) Funds.
RECOMMENDATION
Staff seeks direction from Council on the use of the remaining ARPA funds totaling $1,807,106 in Fund 103 - American Rescue Relief Fund, including interest earnings not previously allocated.
BACKGROUND
The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), established by the American Rescue Plan, delivers $350 billion to state, local, territorial, and Tribal governments across the country to support their response to and recovery from the COVID-19 public health emergency.
On May 10, 2021, the U.S. Department of Treasury issued an interim final rule implementing the SLFRF program. On January 6, 2022, the Treasury subsequently issued a final rule that responded to public comments. On April 1, 2022, the final rule became effective. On December 29, 2022, the Consolidated Appropriations Act, 2023 was enacted, amending the SLFRF program to provide additional flexibility for recipients to use SLFRF funds to respond to natural disasters, build critical infrastructure, and support community development. The existing eligible uses, as discussed in the 2022 final rule, remain unchanged. Recipients may continue to use SLFRF funds in alignment with the 2022 final rule.
The Interim Final Rule (IFR) was submitted for publication in August 2023 and will become effective when published. Recipients may use SLFRF funds for the new eligible uses for costs incurred beginning December 29, 2022. Consistent with the existing eligible uses, recipients must obligate SLFRF funds for the new eligible uses by December 31, 2024. Recipients must expend SLFRF funds obligated to provide emergency relief from natural disasters by December 31, 2026. Recipients must expend SLFRF funds obligated for Surface Transportation projects and Title I projects by September 30, 2026.
ANALYSIS
State, territorial, local, and Tribal governments (together, recipients) must comply with the final rule beginning on April 1, 2022, when the final rule takes effect. Prior to April 1, 2022, recipients may take actions and use funds in a manner consistent with the final rule, and Treasury will not take action to enforce the interim final rule if a use of funds is consistent with the terms of the final rule, regardless of when the SLFRF funds were used. This means that Treasury will not take action to enforce uses of the interim final rule to the extent that the recipient wishes to change its planned uses of SLFRF funds in a manner consistent with the final rule.
This includes, but is not limited to, the following uses of SLFRF funds:
(1) Responding to the public health and negative economic impacts of the pandemic (which includes several subcategories)
(2) Providing premium pay to essential workers
(3) Providing government services to the extent of revenue loss due to the pandemic, and (4) Making necessary investments in water, sewer, and broadband infrastructure.
The City of Patterson was allocated $5,388,220 in ARPA funds and has already spent or allocated the funds as follows:
• COVID-19 Expenditures $637,698
• Employee Premium Pay 386,500
• Public Safety PPE 100,000
• Economic Recovery Programs 600,000
• Aid to Nonprofit Organizations 390,000
• Homeless Shelter Programs 236,000
• IT Equipment - Council Chamber Upgrades 381,000
• South Park Improvements 304,234
• Centennial Park 285,172
• Garza Park Ball Field Maintenance 90,000
• Cybersecurity Services 105,000
• General Contract Services 143,000
• Recreation Program Modification 20,215
Total Previously Allocated $ 3,678,819
Staff is requesting Council provide direction in bringing forth a recommendation for allocating the remaining $1,709,401 for an eligible use. In addition, allocations will need to be made in the amount of $97,705 for the estimated interest income for this fiscal year. The total amount to be allocated is $1,807,106.
Some recommendations for consideration are as follows based on previous requests:
Centennial Park Improvements $800,000.00
Downtown String lights (Design) 43,385.00
Downtown String lights (Construction) 350,000.00
Mural Project 10,000.00
Façade Improvements ($10,000-$20,000 /Applicant) 100,000.00 Garza Park - Improvements 500,000.00
Total additional requests pending approval $1,803,385.00
FISCAL IMPACT
There is no fiscal impact as the funds are already budgeted in Fund 103.