HomeMy WebLinkAboutAgenda Report - April 7, 2021 H-01HAGENDA ITEM 4 ,l
CITY OF LODI
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COUNCIL COMMUNICATION
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AGENDA TITLE: Provide Additional Direction on the City of Lodi's Priorities for the Use of Federal
American Rescue Plan Act of 2021 Funding
MEETING DATE: April 7, 2021
PREPARED BY: Deputy City Manager
RECOMMENDED ACTION: Provide further 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 National League of 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.
At a special meeting on March 23, 2021, City Council provided initial feedback on potential projects
utilizing this funding stream. Given the unique opportunity and significant resources to allocate,
discussion was ongoing at the end of the meeting on March 23. Staff is seeking additional direction and
clarity on a list of priorities that will allow staff to dedicate substantial resources to these projects so they
can be implemented quickly and efficiently. The recommendations in the presentation tonight are
APPROVED: ." <.w (AppI.X:l00-:uG PCIP
Stephen Schwabauer, City Manager
modified from the previous presentation and some additional high level details on each project are
included for Council consideration. 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.
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
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• COVID-19 has infected nearly 31,000,000
Americans, nearly 560,000 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
and citizens 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.
• $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.
Treasury Department is required to release those guidelines
and the City will be reviewing any releases as soon as they
are available.
• Council provided direction on City priorities.
— Priority 1— Replace City lost revenue in the General Fund,
PRCS and Library.
• Use General Fund revenue replacement to first fund sub reserves
that were unfunded in the FY 2020/21 budget and second to fund
Priority 3 items on this list, including an allocation to East Side
Sidewalk improvements ineligible under the Act.
• Use PRCS revenue replacement to fund large and small dog
separation at City dog parks that is ineligible under the act (to be
included in FY 2021-22 budget).
— Priority 2 — Reimburse the City for expenses incurred as a
result of the pandemic that are deemed ineligible for
reimbursement through FEMA.
— Priority 3 — Fund various community Priorities
• Council provided direction to modify staff's recommended
allocations to these priorities.
— Flexibility to efficiently deliver the projects.
• Final City of Lodi allocation is unknown at this time.
• FY 2021 revenue replacements are based on estimates.
• Additional resources may materialize for some projects.
• Should more funding be available, or project savings
materialize additional funds would be reallocated in order
to (example based on current staff recommendations):
— Fully fund CP7—Refund EU; then
— Fund CP 9 — Chamber of Commerce - $40,000; then
— Fund CP 10 — Econ Development programs - $500,000; then
— Fund CP 11- additional PRCS reserves - $5001000
— Any additional reallocation would take Council action.
Should less funding be available, allocations would be
drawn from the lowest funded priority on the list until
available resources matches total allocations.
• By replacing lost revenue or reimbursing expenses, the City loses any
federal restrictions.
• 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.
— Employee health screening tool (Company Nurse)
— Water walls to support outdoor seating in downtown
COVID-19 leave given to employees to ensure quarantine and isolation
recommendations were followed, and limited barriers to testing and
vaccination existed.
— Various cleaning and PPE expenditures after September 2020
— IT Hardware
— Legal and professional advice
Fund
FY 20*
FY 21*
Total
Proposed Use
Fund Various
Reserve Accounts
not funded due to
General Fund**
4281436
11815,484
21243,921
COVID
Maintain Fund
Balance, eliminate
Library
785
281893
291678
cuts
Maintain Fund
Balance, eliminate
PRCS
690,382
11551,684
21242,066
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
435,000
-
4351000
4351000
Information Systems Replacement
65,000
-
651000
65,000
Police Vehicle Replacement
788,000
210,000
578,000
578,000
Fire Vehicle Replacement
700,000
454,860
2451140
2451140
Fire Alerting Station Equip Replace
14,000
710000
71000
71000
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.
• The City incurred expenses responding to
COVID — 19 that are likely FEMA ineligible.
—Staff will continue to pursue FEMA reimbursement
and reallocate funds based on priorities outlined.
Priority 2 - Reimburse Various FEMA Ineligible
COVID Expenses
COVID-19 Leave for Employees
113651000
COVID - 19 Expenditures Likely
Ineligible through FEMA
9061617
Remainder for Community Priorities
21F265,617
Total City of Lodi Allocation
16,140,000
Priority 1 - Revenue Replacement
(41515,,664)
Priority 2 - FEMA Ineligible Expenses
(21265,.617)
Remainder for Community Priorities
9,358,719
General Fund Revenue Replacement
Available for Community Priorities
888,781
Total Available for
Priority 3 - Community Priorities
10,247,500
• Based on 3.23 shirt sleeve, these projects
were removed due to lack of discussion.
—The projects are likely ineligible, with the
exception of water, sewer or broadband
improvements for the Econ Dev site.
Ranking
Priority
Potential Cost
Staff Proposal
Notes
Economic Development Site
Prepare strategic site for possible
N/A
Preparation
$1 million +
$ -
development or annexation
Longer term project planned by Staff
N/A
Animal Shelter
$10-$15 million
$ -
to be financed in 2022
2nd Floor Improvements at 230 W
N/A
Elm St (above PRCS Office)
$1 million
$ -
Move staff out of basements
• Approximately $10.2 million remains for allocation.
• Best practice is to utilize one time revenues for one
time purposes.
• Priorities are modified based on City Council feedback
at March 23 special meeting and one new request.
• Additional detail on each project is provided in this
presentation.
• Council direction tonight gives staff indication to
continue resource planning for these projects.
Future Council action will be needed to formally c ..
funding to the projects.
Ranking
Priority
Potential Cost
Staff Proposal
Notes
Total cost is $5.5 million. Staff is seeking other funding that
may reduce the needs from this source. Should other
1
Nav Center and Low Bar Shelter
$3-$5.5 million
$ 5,500,000
sources emerge, this can be reallocated.
One time Citywide homeless encampment and debris
cleanup. Will not provide sheltering assistance. Cost is
2
City Wide Homeless Cleanup
$62,000+
$ 62,000
approximately $12,400/day for 5 days for PW and PD staff
3
Utility Debt Relief *
$3-4 million +
$ 1,500,000
Direct relief to customers in need
Funds existing applications prior resources could not
4
Small Business Assistance Grants
$600,000
$ 600,000
accommodate
5
Broadband Infrastructure
$1 million +
$ 1,000,000
6
East Side Sidewalk Repairs
$888,781+ **
$ 100,000
Funded from General Fund Revenue Replacement
7
Refund EU for COVID Relief Credit
$1,509,773
$ 1,235,500
Offset future ECA increases
Provide incentive (gift card or bill credit) to test or get
8
Testing or Vaccine Incentives
$250,000+
$ 250,000
vaccine
The Chamber has approached staff regarding losses and
New Request - Chamber of Commerce
additional costs associated with Farmer's Market during
9
Farmer's Market Grant
$40,000
$ -
COVID-19.
10
Economic Development Grants*
$500,000+
$ -
Set Aside for Additional Revenue Losses
11
for PRCS/Library or Unforeseen Needs
$1 million +
$ -
Funding removed based on Council Direction at 3/23/2021
Affordable Housing Development -
Ordinance changes and site
Special Meeting
12
acquisition/development
$1 million+
$ _
Refund EU for COVID Related Energy
13
Efficiency Assistance
$1,509,773
$ -
14
Public Service Providers *
$330,000+
$ -
otal***
$13.9 -18.2+ M
$ 10,247,500
* Other COVID-19 relief legislation may provide some or all of this relief.
** Total includes available funding from this source and not total need.
*** Total includes $888,781 in General Fund Revenue Loss Replacement reallocated to these projects.
• Emergency homeless shelter to shelter all of Lodi's homeless residents
based on the most recent point in time count in 2019 (139 unsheltered
individuals).
• Navigation Center facilitates linkage to needed resources to help
individuals and families exit the cycle of homelessness, and meet the
needs of our point in time count.
• Provides enough resources for a complete shelter and navigation setting
addressing substance abuse counseling, physical health clinic, mental
health services, jobs readiness programs, veterinary clinic, safe housing,
regular meals services, safe parking area (line -in car unsheltered), rapid
rehousing and linkage to other housing services, etc.
• Significant community outreach and engagement, including on site
selection is necessary.
• Allows the City to adopt and enforce a no camping ordinances to keep
unsheltered residents from living in public spaces and have the
opportunity to choose the emergency shelter verses enforcement
• This project is a good candidate for additional funding sources.
• Ongoing expenses to be funded by an operating partner.
• Provides funding estimated as sufficient to
provide a one time homeless encampment
cleanup City wide.
PW Cost Item
Daily Cost
PW Equipment
$
2,700
Dumping Fees
$
2,700
Labor (2 - 4 Man Street Crews)
$
2,800
Total Public Works Costs
$
8,200
PD Cost Item
Daily
Cost
PD Officers (4)
$
2,900
Community Liason Officer
$
550
Part Time Community Liason Officer
$
750
Total PD Costs
$
4,200
Daily Cleanup Cost
$
12,400
City Wide - 5 Day Cleanup
$62,000
• Provide relief credit for delinquent utility account balances
billed during the period of the City local emergency (March
16, 2020) through adoption of this relief program.
— 75% credit towards the delinquent account balance for
residents documenting a loss of income from 2019 to 2020
through tax forms and documenting income at or below area
median income.
— Credits will be applied directly to the account on behalf of the
customer upon successful documentation of income loss.
• Staff proposes to reinstate late fees and service suspension
for non payment within 90 days of program adoption.
• Allows City to fund project applications received but not or only partially
funded under the City's CARES/CDBG COVID relief SBA program.
— Make whole the 24 fully or partially funded projects.
— Fully fund the 44 additional projects that received no funding.
• Provides up to $10,000 in grant resources to small businesses that have
been impacted by the COVID-19 Pandemic.
• Grant can support:
• Supplies and materials to help prevent the spread of COVID-19
(Cleaning supplies, personal protective equipment, Plexiglas, etc.).
• Costs associated with complying with public health orders (e.g. moving
operations outside).
• Payments of lease/rent/mortgage and/or utilities (includes future
payments or payments in arrears).
Small businesses must employ no more than 25- full-time equivalent
employees.
• Helps support small businesses that may not qualify for other gran-
opportunities
ranopportunities due to size and need.
— Does not duplicate benefits already received from other grant
resources.
• Existing fiber backbone is approaching end of life.
— $1 million rebuild of fiber backbone supports existing
and future City connectivity needs.
• Metering, communications, cyber security, network
redundancy, Smart City options.
— $1 million rebuild of fiber backbone enables platform
for future innovation
• 1St step in phased approach to potential broadband offering
for businesses and residences
• Future phases (including a potential revenue stream) will
require this $1 million investment to rebuild the existing
fiber ring due to age and condition.
• Sidewalk repairs are not an eligible use for the
Rescue Plan Act funds.
• Per Staff recommendation, $100,000 of revenue
replacement resources will be reallocated to
sidewalk repairs form the General Fund.
• Current sidewalk repair efforts rely on CDBG or
limited resources from LTF and streets funding
that can be used for road repair as well.
The need for sidewalk repair far outpaces the
$100,000 allocation.
• In July 2020, EU provided Lodi residents over $3
million in bill credits as COVID relief, split 50/50
from two sources.
• Refunding EU these resources allows EU to have
resources to offset future Energy Cost
Adjustments, thereby keeping rates lower in the
future than they otherwise would be.
— This would be consistent with the original purpose of
these resources pre-COVID.
ECA charges are still probable, however with these
resources they will be lower than without them.
• Vaccination is critical to ending the pandemic.
• Many residents have turned down the vaccine despite eligibility.
• Financial incentive may motivate some to get a vaccine that
otherwise would not.
• Staff proposes to offer an incentive for documented full vaccination
in the form of a bill credit on a first come, first serve basis to
residents with no greater than 150% of area median income in the
form of a utility bill credit.
• Staff would need direction on the amount of the credit assuming a
$250,000 allocation to vaccine incentives.
— $20 credit -
- $30 credit -
- $40 credit -
- $50 credit —
12,500 residents
8,334 residents
6,250 residents
5,000 residents
• The Lodi Chamber was unable to host the Farmer's
Market downtown in 2020 due to COVI D restrictions.
• Restrictions continue making dowtown infeasible in
2021.
• The City has explored alternative sites, such as
Hutchins Street Square and Lodi Lake.
— HSS will serve as a mass vaccination clinic during market
season and the two cannot coexist.
— Lodi Lake has sever parking limitations and the market
during the Lake's busy season is infeasible.
• This item is unfunded in staff's recommendation. •
• Potential programs include:
— $100,000 - 50% local match related to the establishment of
a Lodi -based Small Business Development Center.
• Staff would seek grants for the other 50%.
— $200,000 — Micro Loan Revolving Loan Program for Start -
UPS
— $300,000 — East Lodi and Downtown Fagade Grant and
Building Systems Program
• 10 to 50 percent match requirement; the higher the match, the
more points for an applicant
— Additional local business assistance
Numerous federal and state COVID relief programs
have provided additional assistance available to
Lodi businesses, including additional funding in
the Rescue Plan Act
• Staff is seeking direction on the priority list provided
and staff's recommended ranking.
• A resolution will be brought forward as early as the
April 21s' 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 discusse