Discussion and possible action to: (a) approve reallocating $613,751 of current and any future unspent American Rescue Plan Act (ARPA) funds to projects listed in Attachment 1; (b) amend the budget and establish spending authority for the ARPA interest funds of $447,118, as outlined in Attachment 2, including any future interest; and (c) authorize the necessary documentation and contract amendments to distribute funds in line with program and grant requirements through December 31, 2026.

In response to the Coronavirus unprecedented economic impact to local, state, and national economies, the American Rescue Plan Act was signed into law on March 11, 2021, and the Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”) program was established. The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) delivered $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.

Treasury issued the Final Rule in January 2022, and it became effective on April 1, 2022.  In August 2023 Treasury released an interim final rule to implement new eligible uses for SLFRF funds. 

The SLFRF program is designed to allow maximum flexibility to local governments on how best to use awarded funds to meet specific needs based on Treasury designated eligible categories and other federal regulations. As such, the City Council approved the use of $20,769,706 in grant funding awarded to the City under the American Rescue Plan Act for projects which met the eligible uses outlined in the January 2022 Final Rule.  The City Council approved initial allocations of funding into broad categories based on interim rules and guidance provided by the federal government.

Under the SLFRF program, all grant awarded funds must be obligated by December 31, 2024, and expended by December 31, 2026.  All SLFRF approved projects are required to be contracted by December 31, 2024 and completed by the SLFRF grant end of reporting period of December 31, 2026. Any funds not obligated by December 31, 2024, will be subject to retrieval by Treasury.

Currently the City has accumulated approximately $447,118.66 in interest from the ARPA funding.  ARPA Interest can be utilized for any City initiative and without any federal regulations or deadlines.  Therefore, Neighborhood & Human Service staff propose to use the ARPA interest on addressing community needs such as revitalization, childcare, workforce development, housing assessments, and ONEPEORIA initiatives. The proposed allocation of ARPA interest income is strategically designed to meet critical community needs across multiple sectors. These initiatives will support local businesses and infrastructure, foster inclusivity, enhance educational opportunities, and strengthen workforce development as outlined in Attachment 2.

June 15, 2021 – Accepted grant funding and approved the use of $5 million in approved ARPA expenditure categories.

October 26, 2021 – Granted approval to use $4,320,425 of funding for FY 2021 public safety overtime costs.

November 9, 2021 – Granted approval to use funding for homeless shelter projects (I-HELP Program and Deep Within Rehab, Inc.).

November 16, 2021 – Granted approval to use funding for air handler enhancements.

February 15, 2022 – Granted approval to use $20,769,706 in grant funding for various projects and process budget amendment in the amount of $11,449,281 from contingency accounts to various ARPA accounts

May 2024 – Council approved the budget Base amount of $2,526,701, plus a Carryover of $1,775,441, and a Supplemental Request of $200,000 through the annual budget process bringing the total spending authority to $4,502,142 for FY25.

Staff recommends that the City Council: (a) approve reallocating $613,751 of current and any future unspent American Rescue Plan Act (ARPA) funds to projects listed in Attachment 1; (b) amend the budget and establish spending authority for the ARPA interest funds of $447,118.66, as outlined in Attachment 2, including any future interest; and (c) authorize the necessary documentation and contract amendments to distribute funds in line with program and grant requirements through December 31, 2026.

This budget amendment has no fiscal impact to the city.  The amendment is to provide expenditure authority for interest earnings on unspent grant funds.