City Council approves American Rescue Plan Act funds spending plan

The City of Colton was allocated $14,881,400 through the American Rescue Plan Act (ARPA); the first $7.44 million was received in July 2021, and the balance is expected in July 2022. All funds need to be committed by Dec. 31, 2024, with a final expenditure deadline of Dec. 31, 2026.

Finance Director Stacey Dabbs provided a staff report and recommendations on how to spend the funding, first noting what the city cannot use the funds for:

Contributions to rainy-day funds; payment of interest or principals on outstanding debts, offsets in reductions to net tax revenue, and settlement, judgment, consent decree, or legal debt.

The city can utilize ARPA funds for COVID-19 emergency response that includes services and programs to promote COVID-19 mitigation and prevention, services for behavioral health, and payroll for those directly providing a public health response. 

Premium pay for essential workers is an eligible use of funding, to compensate workers for heightened risk and additional stress and work necessary to continue to provide care and service to the community. According to Dabbs, the federal government stipulates that any premium pay or grants provided using fiscal recovery funds should prioritize compensation to lower income-eligible workers. Additionally, government workers are not the only category of essential workers eligible for hazard pay; City Council can award premium pay to other essential workers such as those working in nursing homes, grocery stores, or hospitals.

Other areas eligible for ARPA funding are revenue replacement and infrastructure investment in water, sewer, or broadband including cybersecurity to secure sewer and water infrastructure.

According to the staff report, the City Council has already approved $2.8 million in hazard pay payments to essential workers leaving $4.6 million on the table to allocate as part of the first tranche.

Dabbs pointed out that the city’s actual and estimated revenue loss exceeds the amount the city will already receive and recommends that the city’s whole ARPA disbursement be reported as revenue loss, giving the city maximum flexibility in utilizing those funds for general government services that will allow City Council to prioritize and address a variety of projects and services city-wide without being subject to the more restrictive categorical funding.

Staff also recommends that the city prioritize projects and programming for implementation through FY 2022-2023 budget process.

Councilman Dr. Luis González moved to approve the spending plan, Mayor Pro Tem Ken Koperski seconded the motion.