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HomeMy WebLinkAboutAgenda Report - March 23, 2021 B-01 SMAGENDA ITEM B-1 CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Provide Direction on the City of Lodi's Priorities for the Use of Federal American Rescue Plan Act of 2021 Funding MEETING DATE: March 23, 2021 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Provide direction on the City of Lodi's priorities for the use of federal American Rescue Plan Act of 2021 funding BACKGROUND INFORMATION: The American Rescue Plan Act of 2021 was signed into law on March 11, 2021. The Act provides $65.1 billion to the approximately 19,000 units of state, local and tribal governments nationwide using a block grant formula. The League of California Cities has provided funding estimates that currently show Lodi receiving $16.14 million dollars. The funding is to be used for various relief programs due to the ongoing COVID-19 pandemic. Full details on eligible expenditures and program requirements are expected soon from the Treasury Department. City Staff is monitoring for release of guidance. Per the legislation, the City may use the funds from this Act to: • Respond to the public health emergency with respect to the Coronavirus Disease 2019 (COVID- 19_ or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid impacted industries such as tourism, travel, and hospitality; • Respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of the City that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work; • For the provision of government services to the extent of the reduction in revenue of the City due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year for the City prior to the emergency; • To make necessary investment in water, sewer, or broadband infrastructure. The City has until December 31, 2024 to spend funds, however due to the ongoing nature of the pandemic and its negative impacts, it is imperative the City gets started implementing programs to spend the funding. In addition to permissible activities, funding of unfunded pension liabilities is expressly prohibited. Staff is seeking to get feedback on a list of priorities that will allow staff to dedicate substantial resources to these projects so they can be implemented quickly and efficiently. Once direction is provided on a list of priorities, staff will bring a resolution to Council appropriating the funding and formally establishing the priority list. APPROVED: Stephen Schwabauer, City Manager FISCAL IMPACT: There is no fiscal impact from this presentation. There is no matching requirement to this funding opportunity. All projects recommended by staff are fully funded from the proceeds of the American Rescue Plan Act of 2021. Andrew Keys, Deputy City Manager 4merica Rescue Plan Act of 2D OF ;io • COVID-19 has infected approximately 30,000,000 Americans, nearly 540,000 of whom have lost their lives in approximately 1 year's time frame. • Government restrictions enacted to minimize the impact of COVID-19 have impacted economies across the nation and globe. • The $2.2 trillion CARES Act was signed into law March 27, 2020, but did not include any funding for local government. The American Rescue Plan Act of 2021 is a $1.9 trillion economic stimulus bill singed into lain March 11, 2021, that included $65 billion for local governments nationwide. • Agriculture and nutrition programs, including extending SNAP and the Pandemic EBT program to keep families fed through the pandemic; • Schools and institutions of higher education to safely reopen schools, address learning loss, and support students and staff, including support for broadband for students; • Child care to help sustain child care providers and expand child care assistance to 857,000 children; • COVI D-19 vaccinations,. testing, treatment, and prevention, especially for hard to reach communities and areas; • Mental health and substance -use disorder services; Source: League of CA Cities • Emergency rental assistance, homeowner assistance, and other housing programs to help families pay rent, mortgages, and utilities; • Transit agencies to prevent layoffs of transit workers and prevent severe cuts to transit services that essential workers and the general public rely on. • Payments to state, local, tribal, and territorial governments for economic relief and to combat the virus; • Small business assistance, including specific programs for restaurants and live venues; Support for health care workers, transportation workers, federal employees, veterans, and other targeted populations; • International and humanitarian responses and; • Tribal government services. Source: League of CA Cities • $65 billion is allocated using a "block grant" formula to every local jurisdiction nationally. — $7 billion to California cities — $16.14 million to Lodi (Current estimate) — Funds can be expected as early as 60 days following passage, and must be spent by December 31, 2024. • Some restrictions are placed on the use of funds: — Can be used to replace lost revenue. — Economic Development including aid to households, small businesses, non profits and industries especially affected by COVID like hospitality and tourism. — Direct response to the COVID-19 public health emergency. — Water, sewer or broadband infrastructure investments. • Full guidance for use of the funds has not yet been released. The Treasury Department is required to release those guidelines ' and the City will be reviewing any releases as soon as they are available. • By replacing lost revenue, the City loses any potential restrictions placed on the federal relief funds when providing local relief programs. • Staff proposes to first replace General Fund lost revenue as a priority with the funding. — Minimizes impacts of COVID on service levels. — Allows funding to be reallocated to make various long term reserve accounts whole from a funding freeze in the FY 2021 budget. • Staff secondarily proposes to replace revenue for operating funds supported by the General Fund. — PRCS had almost no operating revenue in FY 2020-21. — Library lost some revenue in FY 2020-21. • COVID purchases not eligible for FEMA reimbursement. — Cyber security upgrades and technology hardware purchases necessary to send staff to work from home were deemed ineligible by FEMA (approximately $200,000) — Various cleaning and PPE expenditures after September 2020 (estimated at $500,000) Fund FY 20* FY 21* Total Proposed Use Fund Various Reserve Accounts not funded due to General Fund** 428,436 11815,484 2192431921 COVID Maintain Fund Balance, eliminate Library 785 281893 291678 cuts Maintain Fund Balance, eliminate PRCS 690,382 11551,684 2112421066 cuts Total 1,119,603 3,396,061 4,515,664 Remaining General Fund Revenue Requested Budgeted Unfunded Proposed Funding General Fund Capital Outlay Fund 4351000 - 4351000 435,000 Information Systems Replacement 65,000 - 651000 65,000 Police Vehicle Replacement 788,000 210,000 578,000 578,000 Fire Vehicle Replacement 7001000 4541860 245,140 2451-140 Fire Alerting Station Equip Replace 141000 71000 71000 7,000 Fire Backup Alerting System 8,000 - 8,000 8,000 Fire Compressor Replacements 14,000 - 14,000 14,000 Fire Exercise Equip Replacements 3,000 - 3,000 31000 Total Unfunded FY 21 Capital Replacements 1,355,140 1,355,140 Remaining General Fund Revenue Replacement Available for Community Priorities 888,781 NOTE: This is the proposed "second use" of the 2021 ARPA funds after the City deposits the funds into the General fund as revenue replacement. FY 2021-22 Budget recommendations will include funding these reserves through current Resources. Total City of Lodi Allocation 16,1401000 Total Revenue Replacement (41515,664) COVI D-19 IT Expenses (200,000) COVID-19 Leave for Employees (11365,000) COVID - 19 Expenditures Likely Ineligible through FEMA (500,000) Remainder for Community Priorities 9,5591336 General Fund Revenue Replacement Available for Community Priorities 8881,781 Total Available for Community Priorities 10,448,117 • Approximately $10.4 million remains after replacing lost revenue and reimbursing for COVID related IT costs. • Best practice is to utilize one time revenues for one time purposes. • Staff is proposing funding some or a portion of multiple COVID response programs and long term City priorities with these funds. • Future Council action will seek flexibility within the various priorities listed, along with required reporting to Council on progress, to ensure money can be spent efficiently and responsibly to have its intended benefit. Ranking Priority Potential Cost Staff Proposal Notes Funds existing applications prior 1 Small Business Assistance Grants $600,000 $ 600,000 resources could not accommodate 2 Economic Development Grants $500,000+ $ 500,000 Untold demand 3 Public Service Providers * $330,000+ $ 330,000 Untold demand Provide incentive (gift card or bill 4 Testing or Vaccine Incentives $250,000+ $ 250,000 credit) to test or get vaccine 5 Utility Debt Relief * $3-4 million + $ 1,500,000 Direct relief to customers in need Total cost is $5.5 million. Staff is seeking other funding that may reduce the needs from this source. Should other sources emerge, this can be 6 Nav Center and Low Bar Shelter $3-$5.5 million $ 5,500,000 reallocated. One time Citywide homeless encampment and debris cleanup. Will not provide sheltering assistance. Cost is approximately $13,500/day for 5 7 City Wide Homeless Cleanup $67,500+ $ 67,500 days for PW and PD staff 8 Broadband Infrastructure $1 million + $ 1,000,000 Affordable Housing Development - Ordinance changes and site 9 acquisition/development $1 million + $ 500,000 Set Aside for Additional Revenue Losses for PRCS/Library or COVID restrictions and anxiety likely 10 Unforeseen Needs $1 million + $ 200,617 in place for some or all of FY 2021-22. * Other legislation may provide some or all of this relief. ** May not be eligible. *** Total includes $888,781 in General Fund Revenue Loss Replacement reallocated to these projects. Ranking Priority Potential Cost Staff Proposal Notes 11 Economic Development Site Preparation ** $1 million + $ - 12 Animal Shelter ** $10-$15 million $ - Longer term project planned by Staff to be financed in 2022 13 2nd Floor Improvements at 230 W Elm St (above PRCS Office) ** $1 million $ - Move staff out of basements 14 Refund EU for COVID Relief Credit $1.5 million $ - Offset future ECA increases 15 Refund EU for COVID Related Energy Efficiency Assistance $1.5 million $ - Offset future ECA increases Total*** $25.3 - 33.25+ M $ 10,448,117 12 • Staff is seeking direction on the priority list provided and staff's recommended ranking. A resolution will be brought forward at an April council meeting to set priorities to allow staff to deliver the projects and programs to be implemented by the funding provided by the ACT. — Staff Priority 1 is revenue replacement for the General Fund, PRCS and Library. — Staff Priority 2 is reimbursement for various COVID-19 costs likely to be FEMA eligible. — Staff Priority 3 is various community priorities discussed.