CITY OF POMONA
COUNCIL REPORT
May 15, 2023
To: Honorable Mayor and Members of the City Council
From: James Makshanoff, City Manager
Submitted By: Andrew Mowbray, Finance Director/City Treasurer SUBJECT: ADOPT A RESOLUTION ApprovING the City of Pomona’s AMERICAN RESCUE PLAN (ARP) SPENDING PLAN UPDATE AND AUTHORIZING $400,000 OF ARP FUNDS FOR SUMMER CONCERTS RECOMMENDATION:
It is recommended that the City Council approve the following actions:
1) Adopt the following resolution (Attachment No. 1):
RESOLUTION NO. 2023-80 – A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, APPROVING THE CITY OF POMONA’S AMERICAN RESCUE PLAN (ARP) SPENDING PLAN UPDATE 2) Authorize the use of $400,000 of ARP funds (Health and Wellness) for the Summer Concerts for the next four (4) years.
EXECUTIVE SUMMARY:
The City was allocated $45.37M in ARP funds. According to US Treasury guidelines, ARP funds are to be obligated by December 2024 and expended by December 2026. As of April 30, 2023, $6.1M has been expended, and $4.4M has been obligated.
Staff met with the ARP sub-committee on March 15, and April 4, 2023 to provide an update and seek feedback on the ARP Spending Plan. The same report is being provided to the City Council for approval of the City’s ARP Spending Plan Update.
FISCAL IMPACT:
There is no fiscal impact with the approval of the ARP Spending Plan update. Any appropriation changes will be included with the FY 2023-24 Adopted Budget that will be proposed for adoption at the June 5, 2023 City Council meeting.
PREVIOUS RELATED ACTIONS:
On June 7, 2021 as part of the FY 2021-22 adopted budget, $6.8M was budgeted in the General Fund for potential revenue loss and accepted the $45.37M of the ARP funds allocated to the City of Pomona by the US Treasury.
On August 9, 2021 an ARP study session was held, and discussion occurred regarding uses that will be eligible. The Mayor and City council provided direction and suggested a specific plan to allocate $45.37M of the ARP funds.
On September 20, 2021 the Mayor and City Council approved the $45.37M City of Pomona ARP Expenditure Plan.
On November 15, 2021 as part of the FY 2021-22 1st Quarter, update to the Expenditure Plan was approved and $2.07M of ARP funds were appropriated for one-time payments included in the respective bargaining unit agreements.
On December 6, 2021the City Council approved appropriation of $6.9M of ARP funds for capital improvement projects – Park Restroom Construction Replacement, Mission Blvd Rehabilitation (White Ave to Towne Ave), and Garey Ave Rehabilitation (Aliso Street to Monterey Ave).
On December 20, 2021 an ARP Sub-committee consisting of the Mayor, and two (2) council members to assist with the process to appropriate the ARP funds for the specific programs and projects as set forth in the City Council approved ARP spending plan was formed.
On February 28, 2022 an update to the ARP Spending Plan was approved to transfer $544,901 for City support related to the pandemic.
On April 18, 2022 the City Council approved ARP appropriations of $370k for Buena Vista Avenue Rehabilitation – Mission Blvd to 9th Street and $500k Philadelphia Street Rehabilitation – San Antonio Avenue to East City Limit.
On May 16, 2002 an update to the ARP Spending Plan was approved to transfer $106k District 2 Microgrants and a status update of ARP FY 2021-22 Appropriations and FY 2022-23 Proposed Budget Appropriations was provided.
On June 6, 2022, the City Council approved the Proposed ARPA Policies and Procedures, and the Adopted FY 2022-23 budget that included appropriations increase of $500k to be used from ARP funds for Library youth services. An update to the ARP Spending Plan was approved to allow a reduction of $250k from the Health and Wellness Activities category, as well as a reduction of $250k from the Participatory Budget category to fund this increase to the Library.
On August 15, 2022, an update to the ARP Spending Plan was approved to allocate $1M for Citywide Rental Stabilization startup costs for consultant services, legal aid, and future work by City staff, $1.15M for Health and Wellness for possible uses including but not limited to concerts and community events as coordinated by the Mayor and councilmembers with City staff, mainly Neighborhood Services Department, $1.06M for Small Business Grants to fully appropriate funds allocated for this program, $600k for Real Time Crime Center (RTCC) which includes live-feed cameras on Holt Avenue ($300k) and build out of RTCC ($300k), and $200k for ARP Administration – Best, Best & Krieger support services, consultant services for subrecipient monitoring and ARP staffing services in Finance and Neighborhood Services.
On November 21, 2022, an update to the ARP Spending Plan was approved to allocate $211k for the Police Departments COPS Technology and Equipment Grant. This amount was offset from the General Fund Budget Shortfall category.
On December 5, 2022, Staff provided a summary of the PJP proposal and noted a number of concerns with the project as proposed at that point. During the meeting, the Council directed staff to work with PJP to revise its proposal to address staff’s concerns listed on the August 9, 2021 ARP Study Session Agenda item. On August 9, 2021, the City Council provided feedback and direction to staff on how they would like the $45.37M ARP funds allocated by December 2024 and spent by December 2026.
On April 17, 2023 the Pomona Jobs Program was awarded $631k ARP funds from the Economic Support for Pandemic and D1 ARP allocation in the amount of $350k and $281k respectively.
DISCUSSION:
The City was allocated $45.37M in ARP funds. Half of the allocation in the amount of $22.7M million was received on May 19, 2021, and the balance was received in May 2022. Funding from the ARP is subject to the requirements specified in the Final Rule released by the US Treasury. ARP funds are to be obligated by December 2024 and expended by December 2026. According to the Government Accountability Office (GAO), who is the audit, evaluation, and investigative arm of Congress, ‘Obligated’ is defined as “a definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or legal duty that could mature into a legal liability by virtue of actions on the part of another party that are beyond the control of the government.” Several Federal legislative initiatives were recently introduced in Congress proposing to rescind unobligated Coronavirus funds. The most notable was a proposal introduced by House leadership to address the national Debt Ceiling that includes such a recission. Therefore, it is important to speed up ARP funds to use and to ensure that spending adheres to federal rules. City staff plans to provide updates to the ARP sub-committee and City Council to apprise the status of the ARP Spending Plan.
The ARP Spending Plan was last approved by the City Council on November 21, 2022 via Resolution 2022-206. In reviewing the allocation, it appears that three (3) programs reported incorrect allocation amounts:
City Support Related to the Pandemic was reported as $794,901. It should be $744,901.
Health and Wellness Activities were reported as $1,350,000. It should be $1,150,000.
Participatory Budget was reported as $750,000. It should be $1,000,000.
The table herein reflects the correct allocation amounts for each program.
As of April 30, 2023, of the $45.37M ARP funds, $6.1M has been expended, and $3.5M has been obligated. The table below itemizes the ARP Spending Plan and is discussed in detail below.
Universal Household Grant ($5.0M)
The Universal Household Grant will target 400 transitional age youth families, ages 16-25 years old, with children ages 0-5, for the period of 2 years at $500 per month. Neighborhood Services Department staff will lead the development and implementation of this allocated program, and the goal is to have this program in place by the end of the calendar year.
Small Business Grants (was $1.15M, reduce by $400k, adjusted amount $750k) This category was originally approved by the City Council for an allocation of $1.15M. The sub-committee recommends moving $400k of this category to the Economic Support Related to the Pandemic, making the adjusted allocation to $750k. A contract was issued to HdL in the amount of $91k to implement the Small Business Rental Assistance Program which is expected to begin in July 2023. Funds for this program will be for small businesses who are in arrears in their rent. The assistance is not to exceed $5k per business. As of April 30, 2023, $11k has been expended in this category.
Economic Support Related to the Pandemic (was $1M, increase by $400k, adjusted amount $1.4M) This category was originally approved by the City Council for an allocation of $1M. The sub-committee recommends moving $400k from the Small Business Grant to increase the allocation in this category, making the adjusted allocation to $1.4M. The program is geared to support small businesses impacted by COVID and try to stimulate entrepreneurs, which may include local non-profits. A Request for Proposal (RFP) is needed to advertise a competitive process. On April 17, 2023, $350k was approved by the City Council to fund a portion of the Jobs Program (PJP). As of April 30, 2023 zero dollars have been expended in this program.
Allocation for Mayor Identified Projects ($1.5M)
As of April 30, 2023, $43k has been expended and $443k has been obligated. Some of the projects under this allocation include various CIPs, child development programming, and support to organizations to improve health and wellness.
Allocation of $750k to each of the 6 Council Districts ($4.5M) As of April 30, 2023, $983k has been expended and $725k has been obligated. Some of the projects under this allocation include various CIPs, Microgrants, funding for Pomona Jobs Program, contract for a Community Learning Center and programming to address learning loss and keep students productively engaged.
General Fund Budget Shortall ($8.4M)
The FY 2022-23 Adopted Budget included $6.8M towards Revenue Loss. However, as mentioned in the Mid-Year Budget Update, General Fund will not need the $6.8M this fiscal year and will return it back to ARP. Instead, the proposal is to use $3.5M towards hiring additional staff on short-term assignments per the funding that is available to administer and implement ARP programs and support start-up costs for the new Housing Stabilization Division within the Neighborhood Services Department to work in the areas of rental registry support, inspection and general program implementation and administration. The balance of $3.3M will be used towards eventually replacing the City’s Enterprise Resource Planning (ERP) system, which will need approximately $5M to implement.
Affordable Housing Grant to National CORE ($550k)
As of April 30, 2023, $0k has been expended and $550k has been obligated. The City entered into an Affordable Housing Disposition and Development Agreement in the amount of $550k for the development of affordable housing project located at 501 East Mission Blvd.
Citywide Capital Improvement Program (CIP) Projects ($15M) As of April 30, 2023, $2.6M has been expended and $706k has been obligated. The status of the following ARP funded CIPs are as follows:
Park Restroom Construction Replacement
Design to be completed by the end of the year, construction by 2024.
Garey Avenue – from Aliso Street to Monterrey Avenue
Not yet started.
Mission Blvd – from White Avenue to Towne Avenue
It is estimated that the entire ARP allocated for this project will be expended by the end of the fiscal year.
Holt Avenue (West) Reconstruction
Design completed by spring/summer 2024. It is anticipated that funds will be spent by 2026.
Health and Wellness Activities ($1M)
As of April 30, 2023, $4k has been expended and $0 has been obligated. This category is to fund citywide health and wellness activities. As such, staff is requesting authorization to use $400k of ARP for Summer Concert Series for the next 4 years (2023 to 2026) to fund costs and ensure enjoyable and safe events. The Summer Concert Series activities include, but are not limited to, identifying, and booking artists, developing marketing materials, coordinating outreach plans, and providing services and equipment, such as restroom facilities, custodial, and security. A summer concert planning committee (“Committee”) was organized and is made up of the Mayor, City staff, and dedicated, active community members that value community events. The Committee is responsible for securing performers, developing budgets, soliciting sponsorships, developing marketing materials, and coordinating lighting, electrical, and technical needs for entertainers. In addition, $23k was allocated towards the Heart of the Foothills Event.
Library Youth Commitment ($500k)
As of April 30, 2023, $0 has been expended and $12k has been obligated towards library networking equipment.
Technology Upgrades, Leadership Development, Operational Efficiencies ($1M) $300k to $400k of these funds are to introduce innovation culture and to invest in staff growth. The other $400k to $600k will be used for cybersecurity as the City is behind in Office Suite.
As of April 30, 2023 no funds have been expended nor obligated.
PD Real time Crime Center ($600k)
As of April 30, 2023, $25k has been expended and $29k has been obligated. The Real Time Crime Center (RTCC) includes live-feed cameras on Holt Avenue for $300k and built out of RTCC for $300k.
Radios for COPS Technology and Equipment Grant ($211k)
As of April 30, 2023, $0 has been expended and $211k has been obligated. $211k will be used to purchase PD radio equipment replacement.
Rent Stabilization ($1M)
As of April 30, 202,3 $69k has been expended. Funds are used for startup cost for rent stabilization. On November 21, 2022, a two-year professional services agreement was awarded to RSG, Inc. for an amount not to exceed $958k to help design, implement and administer the City Council’s desired rent stabilization and tenant protections program.
Participatory Budgeting ($1M)
Participatory budgeting is a process of deliberation and decision-making, in which residents are included in the process for deciding how to allocate part of a municipal budget. As it relates to incorporating this proposed plan into the ARP expenditure plan, it should be noted that the funds allocated for this budget process could only be used on eligible uses as defined by the ARP guidelines. The funds would only be available to be used in the defined time frame and must be obligated by December 31, 2024 and expended by December 31, 2026.
Remaining Balance/Miscellaneous ($2.8M)
Expenditures and obligations of $745k consist of COVID cleaning services in City Hall and PD; City Hall greeters to control the number of people entering City Hall, as well as assist with tracking the online waiting system; plexiglass, masks, respirators, air filtration systems, COVID testing programs and kits; and city attorney support. In addition, a one-time payment of $2.07M was made in the prior fiscal year relating to employee MOUs.
CONCLUSION
As covered herein, ARP funds are to be obligated by December 2024 and expended by December 2026. There are considerations to be aware of including adding City staffing, consultants, and contractors to obligate and spend ARP funds timely. In addition, making sure the nexus of the ARP guidelines are met for each program to qualify for eligibility. The main factor to keep in mind is if the program uses would meet the criteria for the City of Pomona in responding to the economic and public health impacts of COVID-19 and to assist in efforts to mitigate impacts on communities, residents, and businesses.
ALTERNATIVE(S): None.
Prepared by:
____________________________
Andrew Mowbray
Finance Director/City Treasurer
ATTACHMENT(S):
Attachment No. 1 – Resolution No. 2023-80
Attachment No. 2 – Presentation
American Rescue Plan: Spending Plan Update