A2ELNEL_Blog_CoverImageV2_820x360.png

Elizabeth Nelson's City Council Blog

I write a City Council newsletter with my summary of agenda items coming before City Council. Sign up to receive it first via email, or read it here later on this blog.

ARPA Funding Update: Proposed Amendments

This was published in my April 2, 2022 newsletter:


The biggest decision on this week’s agenda is agenda item DS-2, allocating $24.2 million in federal funds from the American Rescue Plan Act (ARPA).


DS-2 (22-0554) Resolution to Direct the Allocation of ARPA Funds


I posted about this in my last newsletter, along with links to previous posts I wrote about the public engagement process:

https://www.a2elnel.com/post/arpa-funding-to-be-decided-at-council-meeting-april-4-2022


Staff funding recommendations are listed in DS-2, which I have reprinted below in order of funding amount:

https://a2gov.legistar.com/LegislationDetail.aspx?ID=5534294&GUID=E5B3011D-DF6A-474F-A18E-AC754BA50E6E&Options=&Search=&FullText=1


Proposed ARPA Funding (Total $24,182,630)

  • $4,500,000 Solar on City Facilities

  • $3,500,000 Property Acquisition for Affordable Housing

  • $3,500,000 Unarmed Response

  • $2,300,000 Gallup Park Bridge

  • $2,000,000 Galvanized Water Service Line Replacement

  • $2,000,000 Vision Zero Plan Implementation

  • $1,682,630 Coordinated Funding Support

  • $1,600,000 Universal Basic Income

  • $1,000,000 City Clerk Election Center

  • $1,000,000 Housing for Homeless Households

  • $500,000 Community and Law Enforcement Data Platform

  • $500,000 Funding for the Arts

  • $100,000 Liberty Plaza



FEDERAL GUIDELINES

Many residents have asked that more of these funds be allocated toward infrastructure projects. At least one of my colleagues has posted on social media that it is “wrong” to use ARPA funds for capital improvements on anything other than water, sewer and broadband infrastructure. This is clearly not the case, given that Staff recommends significant investment in City facilities (installation of solar panels) and City parks (Gallup Park bridge).


Use of these funds is dictated by federal guidelines, which were clarified in January. Explanation of the “Final Rule” (effective April 1, 2022) can be found here:

https://www.govinfo.gov/content/pkg/FR-2022-01-27/pdf/2022-00292.pdf


It is worth noting that the largest single funding recommendation in DS-2 is for installation of solar panels on City facilities ($4.5 million). The “Final Rule” published in January addresses such expenditures, whether or not they would be eligible for funding under ARPA:

Environmental quality and climate resilience. Several commenters recommended eligible uses to enhance environmental quality, remediate pollution, promote recycling or composting, or increase energy efficiency or electrical grid resilience. Whether these projects respond to the disproportionate impacts of the pandemic on certain communities would depend on the specific issue they address and its nexus to the public health and economic impacts of the pandemic. (p. 4376)

The “Final Rule” is clear, however, in giving municipalities flexibility to invest in infrastructure:

Uses of funds that are not specifically named as eligible in this final rule may still be eligible in two ways. First, under the revenue loss eligible use category, recipients have broad latitude to use funds for government services up to their amount of revenue loss due to the pandemic. A potential use of funds that does not fit within the other three eligible use categories may be permissible as a government service, which recipients can fund up to their amount of revenue loss. For example, transportation infrastructure projects are generally ineligible as a response to the public health and negative economic impacts of the pandemic; however, a recipient could fund these projects as a government service up to its amount of revenue loss, provided that other restrictions on use do not apply (p. 4340)

These two categories of eligibility - “revenue loss” and “government service” - allow the City to allocate funds toward capital improvement projects such as the Gallup Park bridge and installation of solar panels. Last October, then-interim City Administrator John Fournier confirmed in a memo:

After reviewing our budget and financial projections, we are estimating that we will be able to spend $18,376,457 in the revenue loss category, allowing us to spend those funds on any general governmental purpose. The remaining amount of our ARP funds, $5,806,173, must be spend on economic aid or public health programs.

https://a2gov.legistar.com/View.ashx?M=F&ID=9861463&GUID=DE3FB842-7FA6-40A6-9315-C3D2DC4B54C5



RECOMMENDATIONS & AMENDMENTS

Yesterday (Friday), all of Council received notice about four proposed amendments to ARPA spending recommendations. These amendments were submitted by Council Members, and are attached to the DS-2 Legistar item:

https://a2gov.legistar.com/View.ashx?M=F&ID=10689331&GUID=9E623DAC-E289-4A1D-B211-1906A17E56F9


AMENDMENT 1 (Sponsors: Radina, Briggs, Disch, and Griswold)

$1,600,000 originally allocated to Universal Basic Income would be re-directed toward road improvements: “additional investment in the next feasible construction season, or to maximize impact through additional investment in a future potential bond proposal to repair streets.”


AMENDMENT 2 (Sponsors: Song, Eyer, Grand, Disch, Taylor)

$500,000 would be spent on residential supportive services. This money would come from the already-allocated $3,500,000 to affordable housing acquisition.


AMENDMENT 3 (Sponsors: Song, Eyer, Disch, Grand)

Up to $200,000 would be spent in collaboration with Washtenaw Office for Community and Economic Development (OCED) to grant, support, and evaluate “arts-based trauma response programs and workforce development.” This money will come from the $500,000 already allocated as Funding for the Arts.


AMENDMENT 4 (Sponsors: Ramlawi, Nelson, Griswold)

$935,336 allocated to Unarmed Emergency Response will be re-directed to Coordinated Funding to support homeless individuals. Funding for Unarmed Response will remain the same, with $935,336 to be allocated from Marijuana Excise Tax Revenue.


Amendment 1 is not surprising to me. Earlier this year, representatives from the United Way Washtenaw County (UWWC) and the Ann Arbor Area Community Foundation (AAACF) reached out to individual City Council members to discuss the City proposal for a Universal Basic Income (UBI). It happens that the UWWC and AAACF are co-funding a pilot program for exactly this - direct cash assistance to families - and they have already identified a platform for administering it at the county level. You can learn more about it here:

https://www.uptogether.org


The current proposal for a City UBI suggests that we duplicate a program already being organized at the county level. I support the concept of a UBI and I believe that the City can play a role in funding it. However, given that this work is already happening at the County level, I expect that there will be opportunities for the City to offer funding in the future, without taking on the task of administration.


I am interested in hearing about what we might fund with Amendment 1, which would allocate $1.6 million toward investment in the next construction season. There are a number of City improvements that have been delayed, due to funding challenges. One example is the Snyder/Edgewood stormwater improvement project, which has not moved forward since the most recent public meeting about it in November 2019. At that time, the estimated cost of the project was $2.9 million.

https://www.a2gov.org/departments/engineering/Documents/Snyder_public%20mtg_4%20-2019-11-06%20-%20final%20version%20-%20191106.pdf


Amendment 2 is also not surprising to me. The amount proposed for supportive services - $500,000 - is consistent with funding recommendations that have been discussed before. In 2020, I cosponsored the Affordable Housing Millage. After consulting with Jennifer Hall (director of the City’s Affordable Housing Commission), Council passed a resolution allowing that up to 20% of proceeds from the Affordable Housing Millage may be spent on supportive services. Amendment 2 is consistent with that percentage.


I am curious to know more about Amendment 3. It does not provide any additional funding for the local arts community, but it seems to prescribe something fairly specific (“arts-based trauma response programs”) and it’s not clear to me who or what we are funding to provide that.


I am one of the sponsors for Amendment 4, which will make use of Marijuana Excise Tax funds for Unarmed Response, in order to direct more money to Coordinated funding and support for individuals who are homeless. The state of Michigan recently announced how much money is due to local municipalities that participate in state licensing for marijuana dispensaries and the city of Ann Arbor will be receiving a significant sum: $1.4 million. I wrote about that here:

https://www.a2elnel.com/post/marijuana-excise-tax-update-1-4-million-to-ann-arbor


I look forward to discussion on Monday and I am excited about how these ARPA funds can be used to improve our community.