November 28, 2023
Finance Department
DATE: November 28, 2023
TO: Mayor Martinez and Members of the City Council
FROM:
Shasa Curl, City Manager
LaShonda White, Deputy City Manager
Nickie Mastay, Deputy City Manager
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
SUBJECT:
Update and Funding Options Using American Rescue
Plan Act (ARPA) and Environmental and Community
Agreement (ECIA)
FINANCIAL IMPACT: Funding to cover proposed projects will be covered from ARPA and/or ECIA funding
PREVIOUS COUNCIL
ACTION:
November 7, 2023
STATEMENT OF THE
ISSUE:
City staff is providing an update and funding
recommending options utilizing American Rescue Plan
Act (ARPA) and Environmental Community Investment
Agreement (ECIA) revenue.
RECOMMENDED ACTION:
RECEIVE an update regarding the American Rescue
Plan Act (ARPA), and Environmental Community
Investment Agreement (ECIA); DISCUSS
recommendations to utilize ARPA and ECIA funds to
offset identified shortfalls in Capital Projects and
programs/projects aligned with the City Council Strategic Goals; and ADOPT a resolution appropriating ARPA and
ECIA to fund proposed expenditures – Finance
Department/City Manager’s Office (Andrea Miller 510-
620-6790/Mubeen Qader 510-412-2077/LaShonda White
510-620-6828).
AGENDA
REPORT
November 28, 2023
DISCUSSION:
This report presents an overview of the American Rescue Plan Act (ARPA) and City of Richmond and Chevron Environmental Community Investment Agreement (ECIA), and provides recommendations to use these two funding sources to offset the identified Capital Projects shortfall not covered with unpent funds (see Attachment 1), and other projects and programs shared through the ARPA Strategic Investment Plan, and City Council Strategic Goals and Priorities.
Capital Improvement Projects Update
The existing capital projects that are included in the FY 2023-24 Capital Improvement Plan, along with the estimated total cost and potential funding shortfall, are provided in Attachment 1. On November 7, 2023, City Council received a report that the remaining FY 2022-23 unspent funds were estimated at $9,520,218. The availability of the unspent funds is an estimate, and the amounts are subject to change, as the City is currently in the process of closing the books for the fiscal year ending June 30, 2023.
City Council approved City staff’s recommendation to use $9,520,218 in unspent funds as follows:
$5,460,000 - FY 23-24 CIP Shortfall
$3,261,717 - FY 24-25 CIP Shortfall (Partial Funding) $520,000 - Stenmark Cottages
$278,501 - Richmond Fire Emergency Operations Center upgrades
Considering Richmond’s aging infrastructure and community needs, City staff has identified an additional $8,559,782 in current unmet capital needs. In the “Proposed ARPA Allocation Options” section (Table 2), none of the options provided total the $8,559,782 in the list referenced below. This list does not capture all of the City’s needs; however, based on available resources and projected timing to complete projects to meet ARPA deadlines, City staff is recommending City Council consideration to fund the following projects:
Capital Improvement Project shortfalls - $6,309,782
Booker T Anderson Community Center - $1,000,000
Stormwater Infrastructure projects - $750,000
Facilities Needs Assessment - $500,000
Capital project budgets are estimates and are based on current information. City staff will continue to refine budget numbers as projects progress. Based on this information, City staff is recommending that City Council consider allocating $8,559,782 from ARPA to fund these projects. Please note Public Works/Engineering is short-staffed to deliver the proposed capital improvement projects, and as the workforce analysis and cost recovery are implemented in Public Works/Engineering, an additional number of engineers are required.
November 28, 2023
American Rescue Plan Act (ARPA) Funds
Background
As part of the $1.9 trillion American Rescue Plan Act (ARPA) relief package, the City of Richmond received $27.7 million. To-date, the City Council has allocated approximately $12.1 million in the ARPA funds to support various projects, with approximately $15.6 million remaining to be allocated/spent (Attachment 2). All funds must be obligated by December 31, 2024, and spent by December 31, 2026.
There are significant requirements, guidance, and limitations on how ARPA funds are to be used. Richmond has discretion to use the award funds in ways that best suit the needs of our community, as long as each use (and all dollars expended) fits into one of the four statutory categories and aligns with ARPA regulations:
1. Replacing lost public sector revenue: For the provision of government services, to the extent of the reduction in revenue of such recipient due to the COVID–19 public health emergency, relative to revenues collected in the most recent full fiscal year of the recipient prior to the emergency;
2. Responding to public health and economic impacts of COVID-19: To respond to the COVID-19 public health emergency or its negative economic impacts;
3. Premium pay for eligible workers: To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to such eligible workers of the recipient, or by providing grants to eligible employers that have eligible workers who performed essential work1; and
4. Investments in water, sewer, or broadband infrastructure: Cities can make investments to improve specific categories of infrastructure, including broadband, drinking water systems, and wastewater and sewer systems.
The City is utilizing Category 1, replacing lost city revenue, for ARPA expenditures. This category provides the City with more flexibility in how ARPA funds are utilized. Funds can be used for any typical government services, including but not limited to general administrative staff, services, facilities, public safety services, road maintenance, infrastructure, and environmental remediation.
ARPA Community Needs Assessment (CNA) and Strategic Investment Plan (SIP) On May 16, 2023, as part of the City’s FY 2023-24 annual budget development process, City Council received a presentation from HR&A Consultants regarding findings from the ARPA CNA and SIP. The findings from the SIP, which were based on input from the CNA, identified priorities categorized in the following five (5) areas (Attachment 3):
Our Jobs and Businesses
Our Health
1 The City approved Memorandums of Understandings with bargaining unions, and implemented classification and compensation.
November 28, 2023
Our Homes and Neighborhoods
Our Families
Our Culture and Community
Additional information regarding ARPA and both City plans can be found at:
http://www.ci.richmond.ca.us/4095/American-Rescue-Plan-Act. While ARPA funding is limited, it is important to note that City staff continues to meet community needs outlined in the ARPA SIP without the use of ARPA funding. Examples of these initiatives are listed in the Next Steps section.
Synergy with City Council Strategic Goals and ARPA Strategic Investment Plan Actions It is estimated that there is $15.6 million remaining in City of Richmond ARPA funding. In consideration of the ARPA SIP findings and City Council Strategic Priorities (approved by City Council on May 22, 2023), City staff created a list of possible uses of ARPA funds to support the following areas aligned in the table below. City staff acknowledges that there are more expenditures than available ARPA revenue; therefore, the possible projects listed below are not comprehensive, and serve as a starting point for discussion and consideration.
Table 1: Possible ARPA Allocations by City Council Strategic Goal Areas City Council Strategic Goal
Area
Project Title Amount ARPA SIP Synergy
Goal 1: Improve the
quantity and quality of
housing, especially low-
income housing, and
reduce homelessness 2
Housing First and
Emergency Housing
Support
Program/Tenant
Protection and Rental
Assistance
$250,000 - $1,484,233 Our Homes and
Neighborhoods
Nystrom Village Pre-
Development
$2,000,000 Our Homes and
Neighborhoods
Goal Area 2: Increase
revenue and improve
economic development
Buy Local Campaign $135,444 Our Jobs and
Businesses
Façade Improvement
Program
$300,000 Our Jobs and
Businesses
YouthWORKS $500,000 - $1,200,000 Our Jobs and
Businesses; Our
Families
Goal Area 3: Improve the
quality of life, community
health, and social
determinants of health
Soccer fields, park
amenities and
upgrades
$3,900,000 - $10,000,000 Our Culture and
Community
2 The City received $13.5 million in ERF Round 1 and 2 funding to support the unhoused community. In addition, Metrowalk Phase 2 project was awarded a ~$43 million Affordable Housing and Sustainable Communities (AHSC) funding
November 28, 2023
City infrastructure
improvements (CIP
shortfall, Booker T
Anderson Center,
Stormwater, Facilities
Needs Assessment)
$6,800,000 - $8,559,782 Our Culture and
Community; Our
Jobs and
Businesses; Our
Homes and
Neighborhoods
Park and Trail Public
Restrooms
$250,000
Goal Area 4: Improve
public safety
Art Initiative $250,000 - $1,935,000 Our Culture and
Community
TOTAL $14,385,444 - $25,864,459
Goal Area 1: Improve the quantity and quality of housing, especially low-income housing, and reduce homelessness
Housing First and Emergency Housing Support Program/Tenant Protection and Rental Assistance – $250,000 - $1,200,000: Funding would allow additional people to receive housing-related support through the City’s partnership with a local partner [Policy Synergies: City-wide Overarching Strategic Goal, Objective 1.2(d)]. Nystrom Village - $2,000,000: Funding would support the pre-development costs for the rehabilitation of Nystrom Village public housing units [Policy Synergies: City- wide Overarching Strategic Goal, Objective 1.1(a)].
Goal Area 2: Increase revenue and improve economic development Buy Local Campaign - $135,444: The goal of the program would expand upon current Buy Local efforts to promote and support existing small- and medium-sized businesses in the Project Area. The 11-month campaign will promote local businesses through marketing and branding materials, connecting residents with local businesses and services citywide to better support the local economy, and coordinate existing resources among local partners to expand local business capacity. The requested funding would be used to provide incentives to residents purchasing from local businesses in the project area. The “Richmond Rewards” would be distributed through the Bludot software. This project is part of the City’s Transformative Climate Communities (TCC) Grant deliverables. (Policy Synergies:
City-wide Overarching Strategic Goal, Objective 2.3(c), Richmond Business Recovery Action Plan 2021: Recovery Action 2A and ARPA Community Needs Assessment pg 20).
Façade Improvement Pilot Program - $300,000: The goal of the 20-month pilot program is to provide existing (prior to 2023) small- and medium-sized businesses/building owners with incentives to improve their building’s storefront.
Through an Request for Proposal (RFP) process, the program allows for improvements to signage, awnings, painting, and other storefront enhancements.
The program is for eligible improvement projects made to the first floor or street level of a commercial building/unit/suite(s). The requested funding would be used
November 28, 2023
for the building improvement grant. This project is part of the City’s Transformative Climate Communities (TCC) Grant deliverables. (Policy Synergies: City-wide Overarching Strategic Goal, Objective 2.3(a), Richmond Business Development Strategy 2021: Action 3B and ARPA Community Needs Assessment pg 21).
YouthWORKS - $500,000 - 1.2 million: Funding up to $1.2 million would support the placement of approximately 400 additional youth in summer and/or year-round work programs. The mission of YouthWORKS is to equip every Richmond youth ages 14-24 with the knowledge and experience they’ll need to be successful in real-world work environments through work-based learning, financial literacy/work-readiness workshops and personalized one-on-one career counseling. [Policy Synergies: City- wide Overarching Strategic Goal, Objective 2.1(e)].
Goal Area 3: Improve the quality of life, community health, and social determinants of health
Soccer fields, park amenities and upgrades – $3,900,000 - $10,000,000: On October 3, 2023, City Council received an update regarding soccer fields and park upgrades.
Depending on final design and bids, ARPA funding may support the development of 3 soccer fields at Wendall Park, Shields Reid Park, and Lucas Park within FY 2023- 24 and FY 2024-25. The funding could also cover related project soft costs, community engagement, and other park amenities. The cost variance mainly depends on community needs (as will be determined during the community engagement process) and the level of park development at Shields Reid Park.
Based on funding availability, City staff and the park consultants would prioritize funding to complete (1) Wendall Park ($1 million), (2) Shields Reid Park (amount varies based on level of improvements but any amount over $2 million would significantly enhance the soccer area), and (3) other park upgrades throughout the City, such as play equipment, baseball diamonds and basketball courts.
Examples of other park amenities could include:
Outdoor fitness equipment at Nicholl Park (grant match) - $162,000 Harbour 8 LEED Certification - $250,000
Playground equipment, baseball diamond and basketball court upgrades - TBD
Policy Synergies: City-wide Overarching Strategic Goal, Objective 3.1 and 3.2(c)
City infrastructure improvements - $6,800,000 - $8,559,782: Projects could include but are not limited to improvements to capital projects, street paving, sidewalk repairs, city facility maintenance and repairs, and stormwater projects. In the “Proposed ARPA Allocation Options” section (Table 2), none of the options provided total the $8,559,782 in the list referenced below. Proposed projects include:
Capital Improvement Project shortfalls - $6,309,782
Booker T Anderson Community Center - $1,000,000
Stormwater Infrastructure projects - $750,000
Facilities Needs Assessment - $500,000
November 28, 2023
Park & Trail Public Restrooms - $250,000: Funds would support security at local parks to ensure safety of park users and increased cleaning of restrooms
Goal Area 4: Improve public safety
Art Initiative - $250,000 - $1,935,000: Through an RFP process, this program would establish a designated arts district and enhance art throughout Richmond while creating opportunities and building community. Per City Council direction, Economic Development staff are drafting a Request for Proposal to determine the feasibility of creating an art corridor in Richmond. Staff estimate that $250,000 would cover the cost of the RFP. (Policy Synergies: City-wide Overarching Strategic Goal, Objective
4.1.g)
Proposed ARPA Allocation Options
Based on the information provided above, City staff is recommending City Council discuss and consider approving one of the three options below for spending the remaining ARPA funds. The options and information provided in this report serve as a starting point for City Council to make informed decisions regarding proposed expenditures.
Table 2: Possible ARPA Allocation Options
Proposed Expenditure Option 1 Option 2 Option 3
Infrastructure: CIP Shortfall $5,800,000 $5,809,782 $6,309,782 Infrastructure: Booker T Anderson Center $1,000,000 $1,000,000 $1,000,000 Infrastructure: Stormwater $- $750,000 $-
Infrastructure: Facility Needs Assessment $- $500,000 $500,000 Nystrom Village $2,000,000 $2,000,000 $-
Tenant Protection and Rental Assistance3 $1,484,233
Art Initiative $- $- $-
YouthWORKS $1,200,000 $1,200,000 $-
Buy Local Campaign $- $135,444 $-
Façade Improvements $- $300,000 $-
Soccer Fields $3,900,000 $3,939,007 $-
Parks and Trail Public Restrooms $250,000
Council Direction $- $- $7,824,451
TOTAL $15,634,233 $15,634,233 $15,634,233
Each recommended area is aligned with the ARPA CNA and SIP, and specific objectives within an overarching City Council Strategic Goal Area. Staff will work with Witt O’Brien, the consultant selected to provide ARPA-related technical assistance to City staff and continue to work internally to develop specific next steps to implement projects and
3 Funding to cover this item might be available through other funding sources, such as grants
November 28, 2023
utilize ARPA funds in accordance with US Treasury rules, and within the deadlines. It is important to note that ARPA expenditures must be obligated by December 31, 2024, and spent by December 31, 2026.
Environmental and Community Investment Agreement (ECIA) Background
On July 29, 2014, the Richmond City Council approved certification of the final Chevron Refinery Modernization Project Environmental Impact Report (EIR) and applications for a Conditional Use Permit and Design Review Permit, as well as an Environmental and Community Investment Agreement (ECIA) for the Chevron Refinery Modernization Project. The amended ECIA, includes investments in greenhouse gas (GHG) reduction programs, community programs, and a photovoltaic solar farm, will provide $90 million dollars to the Richmond community over a ten-year period. Of the $90 million included in the ECIA, the City will receive $80 million to fund GHG reduction and community programs. ECIA revenue and expenditure details commencing in FY 2014-15 are included in Attachment 5.
To enable the City Council to focus primarily on ARPA, staff recommends that additional ECIA funds are allocated within mid-year FY 2023-24, in early 2024. To-date, within the GHG Program category, the City expended approximately $15.22 million through FY 2022-23, $6.14 million is budgeted in FY 2023-24, and $8.64 million remains for allocation in future years (See Figure 1). For Community Programs, approximately $40.93 million was expended through FY 2022-23, $3.74 million is budgeted in FY 2023- 24, and $5.33 million remains for allocation in future years (See Figure 2).
Figure 1: ECIA Greenhouse Gas Reduction Programs Budget
November 28, 2023
Per City Council approval, for the Transportation GHG Reduction category, a multi-year allocation of $1.1 million was approved for eBike programs (9/19/23 City Council agenda); $3.1 million was approved for as a multi-year grant match for the expansion of the Richmond MOVES shuttle program (10/17/23 City Council agenda); and request is forthcoming for $400,000 to leverage a grant for an electric book mobile. In addition, for the Urban Forestry GHG Reduction category, the City is using the FY 23-24 budgeted amount and remaining funds as a leverage for the Transformative Climate Communities (TCC) grant.
Figure 2: ECIA Community Programs Remaining Budget
Each fiscal year, the ECIA budget is developed in collaboration with various departments and approved by Richmond City Council as part of the City’s annual budget approval process. Projects/programs are aligned with the guidelines of the ECIA and are often continuations of programs implemented in previous years.
Attachment 5 provides an overview of the total 10-year ECIA allocation per category, the actual amount spent annually from FY 2014-15 through FY 2022-23 per program, the amount budgeted in the current fiscal year, and the estimated amount available to expend after the close of FY 2023-24 for use in future fiscal years.
ECIA Funding Recommendations
As a starting point, City staff is recommending $312,800 from the Public Safety Programs strategy within the Community Programs category:
$200,000 for Richmond’s fire boat
$37,800 for Rescue Qualification for Richmond Fire Department Rescue Personnel $75,000 for Mandated Rescue Equipment Replacement
November 28, 2023
Per City staff estimates, of the total $80 million in revenue, there is approximately $14 million available in ECIA funds to support various programs outlined in the ECIA.
However, per language outlined in the ECIA and previous City Council direction, some funding is allocated to very specific programs. City staff welcomes questions and direction from City Council regarding available ECIA funding.
Next Steps
Pending City Council approval of the proposed resolution regarding the use of ECIA and ARPA funding, City staff will work with specific City departments to implement programs to ensure funds are spent in alignment with policies and within funding deadlines (Attachment 6). City staff will also continue to monitor the existing capital projects and arising Capital needs in the City and prioritize pursuing grant funding to facilitate those projects.
It is important to note that City staff continue to support the priorities outlined in the ARPA SIP without using ARPA funds. For example, the City has completed or has in progress the following:
Expanding Bludot, a community relations management software platform customized to support Richmond businesses
Supporting the development of the Public Bank project Richmond businesses and residents received approximately $230 million in Paycheck Protection Program loans (https://www.transparentrichmond.org/City- Manager/Richmond-Paycheck-Protection-Program-PPP-Loans/5va7-7tf6) Collaborating with Contra Costa Health Services to support the unhoused and those experiencing mental health/behavioral health issues through the A3 program
Implementing Community Crisis Response
Working with RCFConnects to implement the housing first and emergency housing programs
Received $43 million in AHSC funding and $13.5 million in ERF 1 and 2 funding to support housing needs and increase housing access
Awarding over $6 million annually to support youth-serving organizations through the Richmond Department of Children and Youth
Collaborating with the West Contra Costa Unified School District through the WCC Community Schools Systems Change Collaborative
Implementing fee waiver and partnership policies to expand opportunities to activate and utilize facilities and park spaces
Providing increased hours at the Richmond Recreation Complex and Richmond Main Library to offer additional learning, cultural and recreational opportunities Continued support of 90+ City boards, commissions, committees, subcommittees, and taskforces (Attachment 7)
The City Council will be provided with ongoing updates regarding funded programs and projects and seek guidance as needed.
November 28, 2023
DOCUMENTS ATTACHED:
Attachment 1 – Capital Improvement Projects with Projected Shortfall Attachment 2 – Current ARPA Funding Allocations
Attachment 3 – ARPA Strategic Investment Plan
Attachment 4 – Amended Environmental and Community Investment Agreement (ECIA) Attachment 5 – ECIA Budget Overview
Attachment 6 – Resolution
Attachment 7 – Boards, Commissions, Committees, Subcommittees, & Taskforces List