Adopt Resolution #22-064 Electing Standard Allowance under the Revenue Loss Provision of ARPA

The City is to receive approximately $3M in Federal Funds from the American Rescue Plan Act (ARPA) Funds that will be distributed through the state in two equal payments - the first half the city received in July 2021 and the second half is proposed to be received in the summer of 2022.  

Staff presented possible uses of how these funds could be used at the work session of July 13, 2021 which was towards the construction of the water treatment plant and police body-worn cameras.  These were eligible uses as outlined by the U.S. Department of Treasury's interim final rule in May 2021.

On January 6, 2022 the US Treasury issued a final rule which provides broader flexibility and greater simplicity in how the funds may be spent.  The final rule will replace the existing interim final rule on April 1, 2022.

According to the final rule, recipients may elect a "standard allowance" of $10 million to spend on government services through the period of performance (March 3, 2020 to December 31, 2024, or December 31, 2026 for projects in process).  Under this option, the Treasury presumes that up to $10 million in revenue has been lost due to the public health emergency and recipients are permitted to use that amount (not to exceed the award amount, which would be $3M for Ramsey) to fund government services.

Government services generally include any service traditionally provided by a government.  

Some common examples, as outlined, of eligible government services:

•       Road building and maintenance, and other infrastructure
•       General government administration, staff and administrative facilities
•       Provision of police, fire and other public safety services (including purchases of fire trucks and police vehicles

Government services is the most flexible eligible use category under the ARPA program, and funds are subject to streamlined reporting and compliance requirements.

It is recommended that the City pass a resolution electing the Standard Allowance option under the Revenue Loss Provision of ARPA.



 

At the work session of March 8, 2022, there was a general consensus of the City Council that they would like to utilize the $10M Standard Allowance for the City's share of its ARPA funds.  Outside of using ARPA funds for the purchase of body-worn cameras for the city's police officers, possible uses of the funds will be discussed during the 2023 budget work sessions.  The city has until December 31, 2026 to expend the funds, but funds be "obligated for" or contracted by December 31, 2024.

Discussed at previous work session.

NA

Staff recommends electing the Standard Allowance option. 

Motion to Adopt Resolution #22-064 Electing Standard Allowance under the Revenue Loss Provision of ARPA.