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Update on American Rescue Plan projects spending through 2024 Q3 and recommendation for approval of Memorandums of Understanding to obligate remaining funds
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Submitted by:
John Ruggini
Department:
Finance Department
A. Issue
In 2021 the Congress passed the American Rescue Plan Act (ARPA) that included funds for state and local governments to mitigate the impact of the pandemic. On March 15, 2022 the Common Council approved the allocation of $24,663,875 in funds that the City received. Funds must be obligated by 12/31/24 and spent by 12/31/26.
Obligating funds does not mean more funds are being provided. It simply means that the funds are officially committed for that purpose and with only a few exceptions, cannot be reassigned.
B. Background/Options
Wauwatosa received a total of $24,663,875 in American Rescue Plan Act (ARPA) funds which are intended to support the efforts of local governments in their response to and recovery from the COVID-19 pandemic. The City implemented a robust public engagement process that included internal stakeholder engagement and extensive external engagement with community meetings, interviews, and online feedback opportunities. The Common Council allocated $24,663,875 in ARPA funds among seven program areas including:
• COVID response
• General Government/Administration
• Equity
• Infrastructure
• Mental Health
• Parks
• Small Business Support & Development
For more information on the funded projects, please see <www.wauwatosa.net/ARPA>
The City is required to file quarterly reports with the Department of Treasury on the status of its spending of ARPA funds. As of September 31, 2024, 44% of the funds had been spent and an additional 20% were encumbered as depicted in the graph below.
As of 9/30/24 $8.9 million in funding remains to be obligated by the end of this year. Since then, the City issued a contract for the Westside Pump Station for $4,394,790. That and along with smaller obligations reduces the total remaining to be obligated by the end of the year to be approximately $3.3 million
The Treasury Department recently provided guidance that local governments could obligate funds by adopting Memorandum of Understandings between the officially designated recipient (the Mayor’s Office) and the department responsible for spending the funds. Obligating funds does not mean more funds are being provided. It simply means that the remaining budgeted funds are officially committed for that purpose and with only a few exceptions, cannot be reassigned. 6 departments require Memorandums to obligate remaining funds:
• Library Board
o Total Amount $150,310
o Purpose: Approved Equity Collection project.
o No change to scope or budget.
• Public Works Department
o Total Amount: $350,000
o Purpose: Approved 116th Street Park project.
o No change to scope or budget.
• Health Department
o Total Amount $1,600,000
o Purpose: Approved mental health related projects
o No change to scope or budget.
• Finance Department
o Total Amount $22,000
o Purpose: Approved reporting and auditing project
o No change to scope or budget.
• Community Development Authority
o Total amount: $1,405,000
o Purpose: See below
o Change to scope. No change to overall budget.
As part of its plan to spend down funds by 12/31/26, the Development Department on behalf of the Community Development Authority is recommending expanding the scope of their current home repair project and reallocating remaining funds from project 9963 - CDA SMALL BUSINESS BUILDING IMPROVEMENT.
1. Small Business Support Program ($100,000, unrestricted):
a. Funds will aid small businesses through activities such as grants to assist with building renovations, equipment purchases and professional services, startup/expansion working capital, and redevelopment efforts with a catalytic impact. Additionally, funds can be used for promotional and outreach efforts and networking events.
b. Serve up to 12 small businesses with direct financial assistance awards through a combination of the grant programs; promotional, outreach and networking activities will target small businesses city-wide.
2. Wauwatosa Housing Rehabilitation Program ($1,190,000):
a. Funds will continue to be used to support Wauwatosa Housing Rehabilitation Program
b. Funds may also be used to support the ARPA Affordable Housing Program, described below.
3. Affordable Housing Program ($115,000):
a. Funds will support community housing needs and may include, but are not limited to: supporting a Community Land Trust, site acquisition for affordable housing (possibly Habitat for Humanity), provide grants for lead pipe replacement, and to assist the development of Accessory Dwelling Units
The budgeted amounts in parenthesis are intended as estimates and the Community Development Authority would have the ability to move funds between the three programs.
To comply with the federal obligation deadline of 12/31/24, Memorandum of Understandings are attached between each of the departments above and the Mayor’s Office.
Lastly, we are also recommend designating the Center Street Utility component of project 1024 which is already completed as an ARPA eligible project. In the event we have unspent funds, under certain circumstances, we may be able to retroactively assign those funds to this project so as not to have to return them to the Treasury.
C. Strategic Plan (Area of Focus)
Use of ARPA funds support all five priority areas of the Strategic Plan.
D. Fiscal Impact
There is no fiscal impact as these funds are already budgeted.
E. Recommendation
I recommend the approval of Memorandums of Understanding as described in this memo and attached between the Mayor’s Office and the following departments: Health, Public Works, Finance as well as the Community Development Authority and Library Board. In addition, I recommend designation of the Center Street Utilities as part of project 1024 an American Rescue Plan Act eligible project.