HomeMy WebLinkAboutCommittee of the Whole - 20 Sep 2021 - Agenda - Pdf
CITY OF RENTON
AGENDA - Committee of the Whole Meeting
6:00 PM - Monday, September 20, 2021
Videoconference
1. AMERICAN RESCUE PLAN ACT (ARPA) UPDATE
a) Issue Paper
b) Presentation
Currently, due to the spread of COVID-19, all regularly-scheduled committee meetings will be held as
necessary via video-conference. City Hall is closed to the public.
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FINANCE
M E M O R A N D U M
DATE: September 20, 2021
TO: Randy Corman, Council President
Members of Renton City Council
VIA: Armondo Pavone, Mayor
FROM: Kari Roller, Finance Administrator x6931
SUBJECT: Discussion of Proposed American Rescue Plan Act (ARPA)
Spending Plan
ISSUE:
Staff are seeking council feedback on the proposed targeted allocation of the City’s
ARPA funds, whether council is comfortable with the proposed funding plan and seeking
approval for staff’s recommendation of ARPA spending plan for the immediate need of
economic recovery, community response and support public health expenditures.
RECOMMENDATION:
Staff recommends that Council review and approve immediate ARPA spending plan for
small business grants, participation in the Washington Flex Fund program, support for
housing, homelessness prevention, and human services; and support public health
expenditures approving the purchase of hardware and software purchases needed for
remote work. Staff further recommends Council provide feedback and approve
proposed targeted allocation of ARPA funds.
BACKGROUND DISCUSSION:
On March 11, 2021, Congress passed the American Rescue Plan Act (ARPA) of 2021, a
$1.9 trillion economic stimulus bill signed into law by President Biden to speed up the
United States’ recovery from the economic and health effects of the COVID‐19
pandemic and the ongoing recession. The Coronavirus State and Local Fiscal Recovery
Fund, established by ARPA, provides $350 billion for states, municipalities, counties,
tribes, and territories, including $130.2 billion for local governments, split evenly
between municipalities and counties.
City of Renton’s direct entitlement award is $18,113,855. ARPA funding covers the
period of March 3, 2021 through December 31, 2024. Costs must be incurred/obligated
by December 31, 2024 and spent by December 31, 2026. Funds will be received in two
tranches, with 50% provided at the execution of contract and the balance delivered
approximately 12 months later.
AGENDA ITEM #1. a)
FUNDING ELIGIBIITY AND RESTRICTIONS:
The Coronavirus State and Local Fiscal Recovery Funds provide eligible state, local,
territorial, and tribal governments with a substantial infusion of resources to meet
pandemic response needs and rebuild a stronger, and more equitable economy as the
country recovers. Recipients may use these funds to:
Support public health expenditures, by, for example, funding COVID‐19
mitigation efforts, medical expenses, behavioral healthcare, and certain public
health and safety staff.
Address negative economic impacts caused by the public health emergency,
including economic harms to workers, households, small businesses, impacted
industries, and the public sector.
Replace lost public sector revenue, using this funding to provide government
services to the extent of the reduction in revenue experienced due to the
pandemic.
Provide premium pay for essential workers, offering additional support to those
who have and will bear the greatest health risks because of their service in
critical infrastructure sectors.
Invest in water, sewer, and broadband infrastructure, making necessary
investments to improve access to clean drinking water, support vital wastewater
and stormwater infrastructure, and to expand access to broadband internet.
Stated ineligible costs include:
Pension funds
Legal settlements
Federal match requirements
Within these overall categories, recipients have broad flexibility to decide how best to
use this funding to meet the needs of their communities.
BEST PRACTICES AND GUIDELINES:
Along with specific federal guidance, there is also best practice guidelines
recommended by Government Finance Officers Association (GFOA), among other
professional organizations, around how these funds should be considered and spent.
Three themes emerge through this best practice guidance:
AGENDA ITEM #1. a)
1) Temporary Nature of ARPA Funds: ARPA funds are non‐recurring so their use
should be applied primarily to non‐recurring expenditures.
2) Evaluate ARPA Partnering Opportunities: State and local jurisdictions should be
aware of plans for ARPA funding throughout their communities. Carefully
understanding this landscape will help governments be more effective in their
response.
3) Take Time and Careful Consideration: ARPA funds will be issued in two tranches
and can be spent between now and December 2024. Additionally, there is
funding availability from other federal and state programs. Thoughtful analysis
and coordination of opportunities will be essential.
PROPOSED SPENDING PLAN:
Following Council’s acceptance of ARPA dollars, staff formed an internal subcommittee
comprised of key members from all departments to consider how to make the most
strategic use of resources. These efforts aligned with best practice guidance to include
evaluation of proposed opportunities, identification of overlapping needs and discussion
of potential supplemental funding sources. Following these discussions, subcommittee
representatives met with the Mayor and CAO to further review a list of potential
projects providing additional insight and challenging discussions.
Staff’s proposed spending plan has been categorized as follows:
ARPA Eligible Use Government Service Purpose
Proposed
Allocation
Business grants: offered to small businesses
disproportionately impacted by COVID 600,000$
WA Flex Fund: contribution to Dept of Commerce
small business loan program 1,000,000
SCORE: member owner contribution to support
general operations due to budget deficit 600,000
Business support: business outreach opportunities
and events to increase foot traffic 250,000
Housing, Homeless Prevention and Human Services 1,500,000
Broadband/WIFI at community centers and
downtown core 1,000,000
Renovate City Hall lobby HUB and 7th floor 3,000,000
Hardware/software for staff to support remote work
500,000
Software replacements and upgrades of antiquated
technology infrastructure integral for service delivery
3,000,000
Operational activities in response to new WA state
laws in effect January 2022 1,000,000
Grant Program Manager position to manage ARPA
and other grant opportunities city‐wide 480,000
Replace lost public sector
revenue Unallocated Funds held back for future consideration in 2022.
5,183,855
ARPA Entitlement: 18,113,855$
Economic Recovery
Community Response
Health Precautions
(COVID‐response)
City Operations
Replace lost public sector
revenue
Address negative economic
impacts caused by the public
health emergency
Replace lost public sector
revenue
Replace lost public sector
revenue
Replace lost public sector
revenue
AGENDA ITEM #1. a)
Staff’s primary proposed use of ARPA falls into the category of lost revenue, eligible for
use on government services. Previous pandemic‐related federal assistance came in the
form of the CARES Act, which was intended to help the community and was not eligible
for use on revenue loss; therefore, most of the dollars were spent outside the walls of
City Hall. On the contrary, ARPA was designed to continue the recovery effort but was
also specifically drafted to help local governments address revenue loss experienced
due to COVID.
Renton’s calculated loss of revenue in 2020 is $17.1M. As such, staff recommends
allocating the majority of Renton’s ARPA entitlement toward the replacement of lost
public sector revenue which will free up general fund balance eligible for use on
government services not previously afforded. Consequently, the government services
proposed still align with ARPA eligible uses; however, allocating ARPA in this manner will
reduce the administrative burden of tracking expenditures and minimize extensive
reporting to the U.S. Dept of Treasury.
Five categories have been identified as government services with detailed allocations
listed within the table:
1) Economic recovery: support for businesses, focusing on disadvantaged and
disproportionately impacted industries.
2) Community Response: support for residents, focusing on disadvantaged and
disproportionately impacted populations.
3) Health Precautions (COVID‐response): in response to pandemic, minimize touch
points and increase social distancing to reduce spread of virus.
4) City Operations: enhancement of government services necessary to better
customer service, increase efficiencies, implement state law and provide
overall improvement of city operations.
5) Unallocated: funds held back for future consideration in 2022.
Within these five categories are critical programs and projects necessary to support
human services, economic vitality, pandemic response, and internal city operations
while conservatively holding funds for future consideration. A high‐level spend plan has
been identified within the category of community response; departments will employ
an equity lens to further identify opportunities related to human services, prior to
spending, to maximize value and ensure equitable community benefit.
The following allocations do not qualify as government services eligible for reporting
under lost revenue; therefore, they are identified under the ARPA eligibility of
addressing negative economic impacts caused by the public health emergency, including
AGENDA ITEM #1. a)
economic harms to workers, households, small businesses, impacted industries, and the
public sector and will be reported as such:
1) Washington Flex Fund: $1M contribution to Washington State Department of
Commerce small business loan program. If committed by Oct 1, 2021, state will
provide 2:1 match and ensure contribution stays within City limits. Loans are
managed by local, community‐based lenders.
This program is available for small businesses and nonprofits to borrow up to
$150K to use flexibly toward general business expenses, offering low interest
rates, 60‐month and 72‐month loan terms and no fees & interest‐only payments
for first year.
Businesses that qualify must meet the following criteria:
a. Fewer than 50 employees
b. Annual revenues less than $3 million
c. Experienced direct economic hardship due to COVID‐19
d. In business for one full year prior to June 30th, 2021
2) Business Grants: $600K to small retail businesses in downtown core
disproportionately impacted by COVID primarily due to construction delays.
Any department proposing to spend ARPA funds must submit a proposal consistent with
the funding allocations above. These proposals will be reviewed by the finance
department to ensure the proposal is consistent with the overall objectives of ARPA and
the spending plan adopted by Council. Departments will be responsible for presenting
detailed spend plan of ARPA‐related programs to Council for final approval. The finance
department will submit quarterly reports to the Council regarding the proposals
received and approved, and the overall ARPA budget status.
ATTACHMENTS:
Exhibit A: ARPA Update to Council PowerPoint
CONCLUSION:
Staff recommends that Council move to approve the immediate spending of ARPA
dollars for the following programs/projects: WA Flex Fund, business grants, support for
housing, homelessness prevention and human services; and hardware/software to
support remote work in the amount of $3,600,000.
Staff further asks council to provide feedback on staff’s proposed targeted allocation of
remaining ARPA spending plan in the amount of $14,513,855 to be used for the
purposes outlined within. Future spending will be reviewed and verified by the finance
department to ensure compliance with spending plan adopted by Council.
AGENDA ITEM #1. a)
AGENDA ITEM #1. b)
Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) was established by ARPA to provide $350B to states, municipalities, counties, tribes and territories, including $130.2B for local governments, split evenly between municipalities and counties.01Renton received a direct entitlement award of $18,113,855 from U.S. Dept. of Treasury, based on population and a modified Community Development Block Grant (CDBG) formula.02Payments are received in two tranches: 50% at contract execution; 50% 12 months thereafter. Funds are to be used for eligible costs incurred or obligated beginning March 3, 2021 and ending December 31, 2024.03AGENDA ITEM #1. b)
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11‐member team representing key staff from all departmentsProvide input and evaluate proposed opportunitiesIdentify overlapping needs and funding sourcesOutreach and community engagementAGENDA ITEM #1. b)
Economic Recovery 13.5%Support for businesses, focusing on disadvantaged and disproportionately impacted industries.Community Response 13.8%Support for residents, focusing on disadvantaged and disproportionately impacted populations.Health Precautions (COVID‐19 Response) 19.3%In response to pandemic, minimize touch points and increase social distancing to reduce spread of virus.City Operations 24.7%Enhancement of government services necessary to better customer service, increase efficiencies, implement state law and provideoverall improvement of City operations.Unallocated 28.6%Funds held back for future consideration in 2022.AGENDA ITEM #1. b)
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