That the City Council consider and approve:
A.  Program guidelines, applications and agreements for the $500,000 APRA funded Bill Assistance Program; and

B.  Program guidelines, applications and agreements for the $300,000 ARPA funded Small Business Assistance Program; and,

C.  Authorize staff to make minor modifications and revisions to the guidelines, applications, and agreements, if necessary.

The American Rescue Plan Act of 2021 (ARPA) was adopted by the United States Congress and signed into law by President Biden on March 11, 2021.  ARPA is a $1.9 trillion federal economic stimulus package that provides a wide variety of public health and financial assistance programs intended to address the negative economic impacts created by the COVID-19 pandemic. La Habra’s ARPA entitlement is $15,828,149. Cities are required to obligate all funds received by December 31, 2024, and expend them by December 31, 2026.

The Coronavirus State and Local Fiscal Recovery Fund (SLFRF) program ensures that governments have the resources needed to fight the pandemic and support businesses struggling with its public health and economic impacts and support families struggling with its public health and economic impacts.

Use of Funds
Pursuant to the ARPA Final Rule issued by the U.S. Treasury Department regarding the use of ARPA funds local governments, such as the City of La Habra, enjoy some degree of flexibility in how ARPA funds may be programmed, subject to key prohibitions laid out in the law.  For example, funds may be used to:

Regarding ineligible uses, ARPA specifically prohibits deposits into pension funds, payments toward debt service, use toward legal settlements or judgments, and/or deposits into “rainy day” funds or financial reserves. The overarching goal of ARPA and the funds made available to local governments through SLFRF is to respond to the public health emergency and the related negative economic impacts caused by the COVID-19 pandemic.

On January 18, 2022, the City Council approved an allocation plan for the City's ARPA funds to provide assistance and support to La Habra residents and businesses negatively affected by COVID-19.  On May 2, 2022, the City Council approved a budget appropriation in the amount of $1,172,300 for the following programs, as well as consultant costs to help develop and administer the programs:

Bill Assistance Program:                                      $500,000
Small Business Assistance Program:                    $300,000
"Dine and Shop" Local Incentive Program:              $200,000

The purpose of the Bill Assistance Program (BAP) is to provide assistance to eligible La Habra residents struggling to respond to the economic hardships created by the COVID-19 pandemic. Community Development staff believes the BAP can fill an assistance gap not previously available to La Habra residents, by providing a means for households to help pay expenses that may not have qualified for assistance through other rental assistance programs, such as the Emergency Rental Assistance Program (ERAP), or similar state, county, and district assistance programs. Oftentimes, residents are ineligible for further assistance due to the mandates of these other programs that preclude the duplication of benefits.  Nevertheless, many of the recipients of these assistance programs continue to struggle with payment of their household expenses due to the lingering economic effects caused by the pandemic.   

Under BAP, the City would provide payments to or on behalf of income qualified eligible households, assuming these households can provide proof that they have at least $2,500 in either past due or current bills. BAP assistance can be used to pay for a variety of obligations, including rent, utilities, mortgage payments, property taxes, health insurance payments, childcare, vehicle payments, and credit card payments. Applicants must provide income documentation, such as pay stubs or bank statements, to demonstrate that household income is 80% or below the area median income. For a household of four individuals, this means annual household income can not exceed $88,100. BAP would provide eligible households with a one-time payment of up to $2,500 upon verification of eligibility. The proposed total amount of ARPA funds for BAP is $500,000, which is estimated to provide direct assistance to at least 200 La Habra households at the full grant award level.

To assist small businesses within La Habra struggling with the lingering effects of the pandemic, Community Development staff recommends that the City Council establish the Small Business Assistance Program (SBAP).  Under SBAP, the City would provide assistance to local small businesses that can demonstrate evidence of a financial loss due to the COVID-19 pandemic. SBAP would provide financial assistance that could be used for a variety of business expenses, including payroll and benefits costs, costs of retaining employees, and operating costs, such as mortgage, rent, and utilities. 

The proposed SBAP assistance limit would be $10,000 per business. The proposed total amount of ARPA funds available for SBAP is $300,000, which staff estimates can provide assistance to at least 30 local businesses at the full grant award level.
 

“Dine and Shop” Local Incentive Program ($200,000 in ARPA funds)
To provide assistance to both La Habra households and local small businesses, Community Development staff recommends that the City Council establish a "Dine and Shop" Local Incentive Program (Dine and Shop). Under Dine and Shop, the City would provide $200 gift cards to qualified households that can be used at participating local La Habra small businesses. The City would partner with a gift card platform contractor (staff is currently in discussion with three different platform contractors) to provide eGift Cards that would allow residents to shop or dine locally with gift cards specific to La Habra businesses.

The proposed total amount of ARPA funds for Dine and Shop is $200,000, which will fund 1,000 gift cards.  Staff recommends increasing the gift card amount from $100 per household that was originally presented during the May 2, 2022, City Council Meeting, to the current proposal of $200 per gift card due to the rise in inflation. Staff will draft specific guidelines for Dine and Shop and present them for City Council consideration at a future Council meeting once a qualified platform contractor is identified. 

Staff has provided the proposed BAP and SBAP applications and guidelines as attachments to this staff report. If the City Council approves these programs, staff would solicit applications beginning on August 1, 2022. Applications will be accepted on a "first-come, first-serve" basis through an online portal or in person through the Community and Economic Development Department at City Hall. Staff proposes that any appeals regarding BAP or SBAP grant award amounts or denials be submitted, in writing, within 15 days of notification of the grant decision to the City's Planning Commission for final determination.