CITY COUNCIL STAFF REPORT
Meeting Date: August 01, 2022
TO: THE HONORABLE MAYOR AND CITY COUNCILMEMBERS
SUBJECT: ADOPT RESOLUTION NO. ___ - 22 APPROVING AMENDMENTS TO
THE AUTHORIZED AMERICAN RESCUE PLAN ACT (ARPA) FUNDS
PROJECTS AND PROGRAMS
SYNOPSIS
The City of Pleasant Hill received an allocation of $8.3 million through the American Rescue Plan Act (ARPA). The Budget Committee recommended approval of additional uses of the ARPA funds which was mainly incorporated in the adoption of the City’s Biennial Budget and the 5 Year Capital Improvement Plan. This report provides a summary of ARPA approvals to date and requests budget modifications to accommodate recent Council decisions.
DISCUSSION
Backround
On March 11, 2021, the American Rescue Plan Act (ARPA) was passed by Congress, allocating $1.9 trillion to assist with alleviating the impacts of COVID-19. The ARPA included a State and Local Fiscal Recovery Fund which provides $130 billion for local governments to enable them to continue to support their public health responses and assist with economic recovery. The City of Pleasant Hill received an ARPA allocation of $8.3 million, which is received in two tranches. The City received the first tranche last July for $4.17 million and the second tranche was recently received. Eligible costs must be expended between March 3, 2021 and December 31, 2026, and obligated by December 31, 2024.
On January 6, 2022, the U.S. Treasury issued the Final Rule containing the major provisions for use and reporting of Coronavirus State & Local Fiscal Recovery Funds (aka ARPA funds). The Final Rule increased the flexibility for local governments while simplifying the program. The Final Rule took effect on April 1, 2022 but allows flexibility to use the Final Rule since the beginning of the eligibility date. A summary of the major provisions follow:
• Replacing Lost Revenue - The Final Rule offers a one-time standard allowance election for revenue loss of up to $10 million, enabling the City to select to use the full allocation for government services (defined as services traditionally provided by the recipient government agency) with streamlined reporting requirements. • Public Health and Economic Impacts - The Final Rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID-19 public health or economic response. The set of households and communities that are presumed to be impacted by the pandemic as well as the set of uses, including broader ability to restore and support government employment, was also expanded.
• Premium Pay - The Final Rule delivers more streamlined options to provide premium pay by broadening the share of eligible workers who can receive premium pay without a written justification.
• Water, Sewer & Broadband Infrastructure - The Final Rule significantly broadens eligible broadband infrastructure investments and adds additional eligible water and sewer infrastructure investments.
ARPA Past Activities
The City submitted the required documentation to the State of California last summer to receive the initial first tranche of ARPA funds. The funds were deposited into a new fund in the financial system to easily track revenues and expenditures. Staff has held several public meetings with the Budget Committee and provided updates to City Council as part of the Biennial Budget and Five Year Capital Improvement Plan. City Council has authorized staff to proceed with the following:
DESCRIPTION TOTAL
ARPA ALLOCATION TO PLEASANT HILL $ 8,334,229
(RECEIVED $4.12 MILLION IN JULY 2021, SECOND HALF RECEIVED IN JULY 2022)
MAJOR USES
PUBLIC SECTOR REVENUE LOSS CATEGORY (Elected up to $10 million Standard Allowance):
Sub Category Use:
WATER, SEWER & BROADBAND INFRASTRUCTURE:
Gregory Gardens Storm Drain (Approved by City Council) $ (1,500,000) Diablo View Storm Drain Improvement Project (Approved by City Council) $ (620,000) PUBLIC HEALTH & ECONOMIC RESPONSE:
Business Grants & Assistance (Approved by City Council) $ (500,000) Audio Visual & Broadcast System in Council Chambers (Approved by City Council) $ (145,951) Chamber of Commerce (Approved by City Council) $ (60,000) Safety - Cleaning & Supplies (Approved by City Council) $ (250,000) Digital Documentation Accessibility (Recommended by Budget Comm.) $ (350,000) PD Underground Storage Tank (Approved by City Council) $ (1,200,000) Crossing Guard Services (Contract Approved by City Council) $ (144,780) Retention of Essential Employees (MOU Approved by City Council) $ (245,000) Library Service (Approved by City Council) $ (322,638)
Downtown Street Tree Replacement Project (Approved by City Council) $ (100,000) City Hall Pond Plumbing System Repairs (Approved by City Council) $ (395,000) City Hall Fountain Renovation Project (Approved by City Council) $ (475,000) TOTAL USES $ (6,308,369)
REMAINING ARPA FUNDING $ 2,025,860
ARPA Analysis
This report is intended to provide the City Council an update on the City’s ARPA allocation to date and request approval of the following items:
1. On July 11, 2022, City Council approved a contract for crossing guard services which included an allocation of ARPA funds in the amount of $144,780. Staff is seeking approval to amend the budget and transfer this sum from the ARPA fund to reimburse for these costs.
2. Also on July 11, 2022, City Council approved a Memorandum of Understanding with Pleasant Hill Police Association which included an allocation of ARPA funds in the amount of $245,000. Staff is seeking approval to amend the budget and transfer this sum from the ARPA fund to reimburse for these costs.
FISCAL IMPACT
1. Appropriate and transfer up to $144,780 of ARPA fund to reimburse the City for crossing guard services to the Traffic Safety Fund.
2. Appropriate and transfer up to $245,000 of ARPA funds to reimburse the City for safety expenditures to the General Fund.
PUBLIC CONTACT
Public contact was made through posting of the City Council agenda on the City’s official notice bulletin board, at the Pleasant Hill Senior Center, and at the Pleasant Hill Police Department. The agenda and staff report are posted on the City’s web page.
RECOMMENDED CITY COUNCIL ACTION
Adopt the proposed resolution as recommended by staff.
ALTERNATIVES TO RECOMMENDED ACTION
The Council could choose not to adopt the proposed resolution and these costs would need to be funded by the General Fund.
Prepared by: Erick Cheung, Finance Manager
Approved by: June Catalano, City Manager