GV and CHV treat American Rescue Plan Act funds differently

BY FREDA MIKLIN
GOVERNMENTAL REPORTER

On March 11, 2021, President Biden signed The American Rescue Plan Act (ARPA), including $350 billion in direct aid to states, cities, tribal governments, and U.S. territories to facilitate the recovery from the devastating effects of the pandemic.  It was described by the U.S. Treasury as, “providing fast and direct economic assistance for American workers, families, small businesses, and industries.” 

The guidelines for use of the funds were described in an interim final rule effective May 17, 2021 and outlined more broadly in a 42-page United States Treasury FAQ issued July 19, right after the period for commenting on the interim rule ended. 

One of the permitted uses for the funds was, “for the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency.”

The July 19 FAQ contained more expanded information on how the funds received by cities could be used, including, “supports for vulnerable populations to access medical or public health services; support for prevention, mitigation, or other services in congregate living facilities (e.g., nursing homes…homeless shelters, group living facilities) and other key settings like schools; job training to address negative economic or public health impacts experienced due to a worker’s occupation or level of training.”  ARPA funds could also be used for loans or grants to small businesses and non-profits “to mitigate financial hardship such as declines in revenues or impacts of periods of business closure; aid to support safe reopening of businesses in the tourism, travel and hospitality industries; educational services like tutoring or afterschool programs, and supports for students’ social, emotional, and mental health needs.”  The money could also be, “provided to small businesses, including loans, grants, in-kind assistance, technical assistance or other services, to respond to the negative economic impacts of the COVID19 public health emergency.” Also, “These initiatives also may support small business startups and individuals seeking to start small businesses.”

On June 7, Deputy City Manager John Sheldon informed the GV City Council that GV would be receiving $3.95 million, half in 2021 and half in 2022.  After Sheldon said, “Staff is participating in many calls and webinars on the eligible uses of the funds,” Councilmember Tom Dougherty, pointing to previous testimony from Shawn Cordsen, GV finance director, asked, “Is it possible to simply put it into our budget to replace the shortfall that we incurred in 2020?” Sheldon replied, “I would say yes.” On September 13, without its agenda stating that a public hearing would be held about how the funds would be used, and no discussion by any of its members prior to voting, the GV City Council voted unanimously to simply add the $1.98 million it had received in June from ARPA to its 2021 budget. The proposed 2022 GV budget anticipates doing the same with the second allocation of $1.98 million that will be received by the city in June 2022. GV’s total fund balance (the amount left after all expenses are paid) is anticipated to be $49.5 million at December 31, 2021 and $50.7 million at December 31, 2022.

The city council of neighbor city Cherry Hills Village voted unanimously on July 20 to amend its 2021 budget by creating a new separate fund in its financial records, the American Rescue Plan Act Fund. CHV Director of Finance and Administration Jessica Sager told the city council, “Between 2021 and 2022, the city will receive just over $1.6 million from the United States government in response to the COVID 19 pandemic. The ARPA funds can be used to mitigate COVID-19 efforts, replace lost revenue, provide premium pay for essential workers, and invest in water, sewer and broadband infrastructure. (This separate fund) will allow the city council time to explore the projects that will have the greatest impact to the Village. Creating the ARPA Fund provides greater transparency for how the funds are spent as they will be tracked separately from the general fund expenditures and will allow a more streamlined reporting to (the U.S.) Treasury.” 

CHV’s total fund balance was $21 million as of December 31, 2020 and is expected to be $19.6 million at December 31, 2021. Numbers for 2022 are not yet available. 

fmiklin.villager@gmail.com