FOR THE COUNCIL MEETING OF JUNE 6, 2023
COUNCIL AGENDA REPORT
TO: City Council
FROM: City Manager
Prepared by: Assistant City Manager
SUBJECT: American Rescue Plan Act (ARPA) – June 2023 Update
Description:
The City Council will receive a presentation on an update to American Rescue Plan Act of 2021 ( ARPA) projects and the actions being taken by the City to advance project s consistent with City Council ARPA strategic priorities.
Environmental Notice: The activity is not a “Proj ect” 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.
BACKGROUND:
The United States Congress took action to provide financial assistance to the City of Santa Maria and other governments across the country to both mitigate the financial impacts of COVID , as well as stimulate economic recovery. Signed into law on March 11, 2021, the ARPA provides $350 billion in additional funding for state and local governments.
The intent of the ARPA legislation is designed to address the unprecedented coronavirus health and economic recovery. The legislation provides broad statements regarding the use and restrictions of these funds.
The City of Santa Maria is committed to taking all possible steps to invest ARPA funds in projects that will have a significant public benefit. However, the project list is not considered final, which will allow the City to remain flexible as pro ject feasibility and priorities evolve.
At the January 18, 2022 City Council meeting, the City Council received an update from staff on the current progress on projects aligned with the City Council’s three strategic priorities.
DISCUSSION:
The City has received approximately $37.2 million in ARPA funds and must spend these grant funds relatively quickly, within roughly three and one -half years, by December 31, 2024. Pursuant to prior City Council direction , below are the three strategies for ARPA funds:
2 1. Reimburse costs incurred and revenue lost as a result of COVID-19.
2. Invest this one -time funding in projects that can be completed in the required timeline and increase ongoing revenues or reduce ongoing costs.
3. Strengthen the City’s financial position to prepare for future fiscal emergencies.
City staff conducted a robust process to identify and develop projects. This process ensured that City Council strategic guidance set priority for project selection and that each project meets the U.S. Treasury rules for eligibility. Subsequently, these projects were brought before the City Council for approval and status updates. The projects that were approved by City Council are at various stages of planning and execution.
There are several key project highlights since the last update to City Council. The potential clawback of ARPA funds reported in the media is not expected to affect the City’s award of $37.2 million. Staff confirmed with the City’s legislative advocate and ARPA consultant that the potential de-obligation of ARPA funds will only affect funds that are still held by the federal government. The funds that have already been awarded to recipients, such as the City, are not at risk of clawback.
Also, following City Council direction, $10M was used to reimburse the General Fund for the assumed (by US Treasury) revenu e loss associated with COVID-19. This revenue loss standard allowance enabled the City to redirect ongoing revenues such as sales tax and property tax to other City needs.
At this time, all Council-approved projects are on track and not at risk, and they represent a full commitment of the ARPA funds received.
A presentation will be made by City Manager Jason Stilwell , Assistant City Manager Andrew Hackleman, and Finance Director Mary Harvey with an update of ARPA projects and include a list of projects that currently exist and what is proposed.
Alternative(s)
This presentation does not offer alternatives and is intended as an update only for the City Council to receive.
Fiscal Considerations
This item does not have any direct fiscal considerations and is intended as an update on project commitments that have already been made.
Impact to the Community
The impact to the community will be reflected in significant infrastructure improvements to the City, as projects are brought before the City Council for approval and execution.
ATTACHMENT: ARPA Worksheet_2023-06-06