Title
Staff Report for Discussion Regarding the American Rescue Plan Act (ARPA), Including Reallocation of $1,078,857 to technology infrastructure, a recreational vehicle (RV) outreach and housing navigation pilot program, and the alternative response unit, and Authorization for the City Manager to Approve Carryovers/Unspent ARPA Funds to Future Fiscal Years’ Budgets
Staffreport
COUNCIL PRIORITY
• Public Safety
• Housing and Homelessness
• Infrastructure
• COVID Recovery
• Fiscal Sustainability and Transparency
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council Finance Committee review and recommend to the City Council the reallocation of $1,078,857 in the American Rescue Plan Act (ARPA) Budget to technology infrastructure, a recreational vehicle (RV) outreach and housing navigation pilot program, and the alternative response unit, and authorization for the City Manager to approve carryovers/unspent ARPA funds to future fiscal years’ budgets if needed.
Some projects and programs are expected to be implemented over multiple years. Authorizing the City Manager to carry over unspent ARPA funds to future fiscal years will ensure timely and successful implementation of projects and programs.
BACKGROUND
On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA). This $1.9 trillion COVID-19 stimulus package provides significant resources to state, local, territorial, and tribal governments to support urgent COVID-19 response efforts. Within ARPA, the Coronavirus State and Local Fiscal Recovery Fund provides $130.2 billion for local governments split evenly between municipalities and counties.
The funding allocation to the City of San Leandro is $18.6 million, which the City has received in full. Funds can be used for the expenditure categories described below.
Eligible Uses
1) COVID-19 Response or Negative Economic Impact: 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 to impacted industries such as tourism, travel, and hospitality.
2) Premium Pay for Essential Workers: To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of the state, territory, or tribal/local government that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work.
3) Revenue Recovery: For the provision of government services to the extent of the reduction in revenue of such state, territory, or tribal/local government due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year of the state, territory, or tribal government prior to the emergency.
4) Infrastructure Investments: To make necessary investments in water, sewer, or broadband infrastructure.
ARPA Funds must be spent by December 31, 2024. If obligated by December 31, 2024, agencies have until December 31, 2026, to incur the costs.
Recovery Plan
Approximately $18.5 million of the $18.6 million funding allocation, has been programmed by the City Council since Fiscal Year 2021-2022 to fund important programs such as streets and roads, parks and recreation facilities, human services, library services, and infrastructure. As the City continues to implement the various projects and programs, there will be adjustments to reflect program needs/funding status. Staff plans to present adjustments to the Council during Fiscal Year 2023-2024.
The City Council has directed the principles below for the use of ARPA funds, and the Recovery Plan was developed based on these guiding principles. The proposed projects and programs are intended to improve community wellbeing and help residents and businesses to recover from the combined health, social, and economic impacts of the COVID-19 pandemic. The Recovery Plan aligns with the community’s values and focuses on working with our key partners including nonprofit organizations and other business partners to maximize community recovery.
Guiding Principles
• Recover lost revenues first
• Maximize investments for the community
• Assess City operations and community needs
• Meet City Council priorities
• Partner with nonprofits and other organizations
• Use one-time funding for one-time expenditures
• Use restricted resources first
The Recovery Plan focuses on short-term community and economic recovery efforts and long-term sustainable investments in San Leandro. The spending categories include community health and safety, human services, community and economic recovery, and infrastructure enhancements.
Implementation Status
Attachment A to the staff report presents the implementation status for each project. Many of the projects started in Fiscal Year 2021-2022, and they are in different project phases including planning/assessment and implementation. Below are highlights of the implementation status for some projects.
Food Insecurity Support: Working with an emergency housing program, this project provides two meals per day to San Leandro’s unhoused population. Priority is given to individuals aged 65 or over and/or with chronic health conditions. The program is anticipated to run through Fiscal Year 2024-2025.
Expanded Homeless Outreach Team Services: Provides outreach funding for staff, case managers, and CBO (Community Based Organization) partners to conduct on-site street outreach. The City executed a contract with Building Futures for a Mobile Outreach Program. The program is anticipated to run through Fiscal Year 2024-2025.
Long-term Navigation Center: The goal is to provide funding for a long-term navigation center to help the unhoused. The City also plans to use restricted affordable housing funds for acquisition and rehabilitation/construction to leverage other public financing (i.e., State, federal). The City identified a site/motel for the project and is in escrow to acquire the property with federal, state, and local funding sources. Implementation is anticipated to be in Fiscal Year 2024-2025.
Commercial Relief Grants: Provides grants for commercial tenants to pay past due rent, paid directly to landlord. This grant program is nearing completion, and the remaining funds will be utilized in Fiscal Year 2023-2024 for additional business assistance grants and programs, which may include permanent outdoor dining and business organization assistance.
Small Business Technical Assistance: Provides assistance and services for businesses in areas such as: adapting business models and physical setup to changing customer demand (including outdoor dining), creating an online presence while setting up ordering systems, accessing capital, and understanding and accessing City services and permitting. Monthly business seminars were conducted, related to topics such as City permitting, City contracting, security, and financing. Contracts and programs for technical assistance consulting and online/website assistance are in place for Fiscal Year 2023-2024.
Public Facility HVAC and Air Filtration Upgrades: Upgraded the air filtration and HVAC systems in public facilities (Library, Senior Center, City Hall, etc.) to prevent the spread of COVID-19 and also enhanced cooling functionality. The total estimated cost was $5 million including $3.3 million from ARPA funds. This project was completed.
Street Overlay/Rehabilitation: Funding for street maintenance comprised of partial or complete pavement replacement. This project addresses street pavement in poor condition and streets with pavement that has failed. A construction contract was awarded in Fiscal Year 2022-2023, and another award is scheduled for Fiscal Year 2023-2024.
ARPA projects and programs benefit the community in the short and long term. ARPA funds are well suited for infrastructure investments as recommended by the Government Finance Officers Association (GFOA). A significant portion of the $18.6 million funding allocation is programmed toward improving the City’s broadband, street, facility, and park infrastructures.
Tracking Project Progress
Staff monitors and reviews the progress of projects that are funded by ARPA allocations. During review, attention is placed on City Council priorities and current considerations that may differ from when allocations were initially made. Conditions that have changed based on staff work and findings during project development or implementation may necessitate reallocation of funds. Proposed reallocations are brought to the City Council Finance Committee for discussion and the City Council for subsequent action.
Reallocation
Based on a recent review of current ARPA allocations, staff recommends reallocation of $1,778,857 that is currently allocated for various projects that have been or will be completed below budget.
RV Outreach and Housing Navigation
While continuing to explore implementing a congregate Safe Parking program, the proposed allocation will provide targeted RV outreach and a housing navigation program. Staff will work with nonprofit partners to identify 10 RVs to target outreach and housing navigation services with the goal of permanently housing those residing in their RVs. The total needed for this program is $450,000, of which $153,857 will be funded by ARPA Funds. Staff identified available General Funds and will seek an appropriation to fully fund this program.
Technology Infrastructure
The proposed $200,000 reappropriation will supplement an existing $700,000 ARPA Fund appropriation to upgrade the City’s aging technology infrastructure to support Citywide programs and projects. The City’s switches, routers, and firewalls are essential technology infrastructure, connecting employee computers to data and business applications in City data centers and on the Internet. To ensure the effective and efficient running of the City's operations, it is critical that aging network equipment is regularly and promptly replaced. Existing hardware and supporting software that has reached its end of life will be replaced, which will allow employees throughout the City to continue accessing programs and data while sharing resources and documents to operate and administer programs and services.
Alternative Response Unit
Pursuant to Council direction, staff has been exploring options to implement an Alternative Response Unit for mental health crises. The goal is to provide effective and compassionate crisis intervention to beneficiaries, families, and the community who exhibit mental health symptoms and may be at risk. The proposed $725,000 allocation would supplement an existing General Fund appropriation of $625,000 to provide a total funding amount of $1,350,000 for these services.
Financial Impacts
There are no new fiscal impacts. The ARPA Funds Budget is $18.6 million and remains unchanged with the recommended reallocation of $1,078,857.
ATTACHMENTS
Attachment A: ARPA Update Presentation
Attachment B: City of San Leandro Detailed Recovery Plan
Attachment C: ARPA Expenditure Budget Adjustment Detail
PREPARED BY
T. Michael Yuen, Finance Director