MEETING DATE:
JULY 13, 2021
SUBJECT:
Title
RESOLUTION NO. 2021-8907 - RESOLUTION AMENDING THE FISCAL YEAR 2021-22 OPERATING BUDGET AND DELEGATING AUTHORITY TO THE CITY MANAGER TO EXPEND THE FIRST TRANCHE OF AMERICAN RESCUE PLAN ACT (ARPA) FUNDS, TO EXECUTE ALL RELATED AGREEMENTS AND AMENDMENTS AND TO ESTABLISH ALL RELATED ARPA GRANT PROGRAMS
Body
Recommendation
Recommendation
ADOPT a resolution amending the Fiscal Year 2021-22 Operating Budget and delegating authority to the City Manager to expend the first tranche of American Rescue Plan Act (ARPA) funds, to execute all related agreements and amendments, and to establish all related ARPA grant programs.
Body
Board or Commission Action (If not applicable, please state not applicable below)
Not Applicable
Relevant Council Strategic Theme (If not applicable, please state not applicable below)
Good Governance
Relevant Department Goal (If not applicable, please state not applicable below)
Not Applicable
Executive Summary
On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law, which established the Coronavirus State and Local Fiscal Recovery Funds (FRF). The FRF provides $350 billion in support to state, local, and tribal governments to respond to COVID-19 impacts on their communities, residents, and businesses. Allocated funds to local governments will be distributed by the US Treasury in two equal tranches 12 months apart. The City received $9,139,573 for tranche #1 in ARPA funding. The funds allocated under ARPA may be used for a range of eligible activities to aid in COVID-19 relief and assistance.
Approval of a resolution to amend the FY 2021-22 Operating Budget to appropriate the first tranche of ARPA funds and delegate authority to the City Manager to finalize and execute all agreements, amendments and related documents, and create and institute ARPA related Grant Programs for the immediate use of the ARPA funds.
Discussion
On March 12, 2020, the Governor for the State of California under Executive Order N-25-20, declared a State of Emergency due to the COVID-19 pandemic.
On March 20, 2020 the City Council, under City Council Resolution 2020-8745, declared a State of Emergency due to the COVID-19 pandemic.
On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law to distribute over $350 million in emergency funding to State, Local, Territorial, and Tribal governments. The US Treasury will distribute allocated funds in two equal tranches to local governments 12 months apart.
The City received the first tranche disbursement of $9,139,573 on May 19, 2021. The funds are to be used to cover costs from March 3, 2021 through December 31, 2024. The eligible uses of ARPA funds are as follows:
1. To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel and hospitality;
2. To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers;
3. For the provision of government services to the extent of reduction in revenue due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency; and
4. To make necessary investments in water, sewer, or broadband infrastructure.
On May 25, 2021, the City Council held a public ARPA budget workshop to discuss the needs of the community, the allowable uses of the ARPA funds, and the eligible funding opportunities to address the negative economic impacts of COVID-19 and to replace lost revenue. During the public workshop, City Council reviewed the local impacts created by the pandemic. These impacts include an approximate $5 million dollar revenue loss due to COVID-19 in prior years. The COVID-19 related revenue loss resulted in City Council adopting an Operational Budget deficit for FY 2020-21 and FY 2021-22.
In addition to the City’s loss of revenue, City Council identified that our local community organizations, residents, local businesses and non-profits should be the primary focus of the first tranche of relief funds. The Boys & Girls Club of San Marcos is a non-profit that provides programs to assist youth in realizing their full potential in locations throughout the City, including underrepresented communities. To continue to be a resource for the community, tenant improvements are necessary for the site located at 413 Autumn Drive.
As part of the City’s Climate Action Plan strategy to reduce greenhouse gas emissions generated from vehicle travel, the City is developing an Electronic Vehicle (EV) Charger Grant Program, which will increase the availability of EV chargers to our residents.
At the onset of the emergency, the City issued Business Sustainability Program (BSP) loans to local businesses. The conversion of the remaining loan balances to grants will eliminate this remaining debt and directly benefit local businesses that were adversely impacted by COVID-19.
Furthermore, the City will create operational grants to support local non-profits under the COVID-19 Non-Profit Community Grant Program to ensure that organizations that provide vital support to our community members are able to continue operating during these uncertain times.
At the direction of Council, during the City Council ARPA budget workshop, staff developed the COVID-19 Non-Profit Community Grant Program. The program will provide funds to charitable organizations to adopt safer operating procedures, weather periods of closure, or mitigate financial hardship resulting from the COVID-19 public health emergency. On June 10, 2021, the City Manager identified a local community group known as the “North County COVID Relief Fund”, which is made up of the Impact Cubed, Rancho Santa Fe Foundation, and Costal Community Foundation to administer the program for the direct protection and benefit of the residents of the City.
The staff has carefully reviewed the ARPA Coronavirus State and Local Fiscal Recovery Funds (FRF) requirements and is recommending that the first tranche be allocated and appropriated as follows:
1. $2,561,391 to the FY 21-22 Operating Budget deficit;
2. $1,200,000 to the Boys and Girls Club/Westlake Village for tenant improvements;
3. $1,278,635 to the Electric Vehicle Charger Grant Program;
4. $1,099,547 to the conversion of the remaining outstanding balance of the Business Sustainability Program loans to grants; and
5. $3,000,000 to the COVID-19 Non-Profit Community Grant Program.
Additionally, staff recommends authorizing award of the Program Administrator contract for the COVID-19 Non-Profit Community Grant Program and delegating authority to the City Manager to finalize and execute all agreements, amendments and related documents, and create and institute ARPA related Grant Programs for the immediate use of the ARPA funds.
Environmental Review
There is no environmental review with approval of this item.
Fiscal Impact
Approval of the requested resolution will amend the Fiscal Year 2021-22 Operating Budget to appropriate the first tranche of ARPA funds totaling $9,139,573. The FY2021-22 Operating Budget will be updated to reflect the ARPA funds allocation and appropriation.
Attachment(s)
Attachment 1- Resolution 2021-XXXX
Attachment 2- COVID-19 Non-Profit Community Grant Program Guidelines
Prepared by: Scott Bando, Management Analyst
Submitted by: Lisa Fowler, Finance Director
Reviewed by: Michelle Bender, HR/Risk Director & Deputy City Manager
Approved by: Jack Griffin, City Manager