10.5 American Rescue Plan Act Funds

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FEATURE ISO19 costs,like vaccination programs and ( , contact tracing,qualify as a response to a public health emergency.Assis- tance to households,small businesses, and nonprofits meets the negative economic impact standard.Cities can r.,,, .. help residents in many ways,includ- ing increasing affordable housing ill and providing assistance with food, rent,and utilities.And they can aid businesses with loans and grants to mitigate financial hardship or help _isk oti with COVID-19 measures. �� s Premium pay for essential work- ers. ork ers.While offering premium pay for �4� .4)14 employees was a common use of the • • • CARES Act funding,cities must be more careful with the second funding CITIES WORK TO MAKE THE MOST OF round,Soya premia pyo eligible may pro- vide ees to the extent that the employees' Federal pi ' Piii time is dedicated to responding to the COVID-19 public health emergency. i Revenue replacement for provision BY MARY JANE SMETANKA of government services.Cities that lost money during the pandemic must For Houston,a small city in Minne- basis and cannot exceed 75%of a city's calculate their losses by comparing sota's southeastern corner,fixing annual budget.Cities have received the general revenue from all eligible and replacing old water and sewer first half of their money from the state; sources at the end of 2020 and each pipes is an expense that stretches the they'll receive the remainder in 2022. year end through 2023 to the general city budget. ABPA is different from the first COVID- revenue for 2019.The funding cities But City Administrator Michelle 19 relief bill,called the CARES Act,because receive can help replace this lost reve- Quinn says that if city officials decide it offers the opportunity for a significant nue.The federal funds can be used for to tackle those projects,Houston finally and lasting impact on cities,says Lisa Soya, the provision of government services has the resources to finish replacing lead assistant finance director with the League but can't be used to pay outstanding water service lines to homes and work on of Minnesota Cities(LMC). debt,replenish reserve funds,or pay sealing a leaky sewer main. The CARES Act helped cities with settlements or judgments. The money for that work would come their emergency response to COVID-19, a, Investments in water,sewer,and from the federal American Rescue Plan and the funding had to be spent quickly. broadband infrastructure.Any Act(ARPA),the massive COVID-19 ARPA is intended to help cities recover project that meets federal standards relief legislation approved last March. from the pandemic's effects,allowing under the Environmental Protection ARPA is the second federal relief bill more time to set priorities on how to Agency's Clean Water State Revolv- enacted since 2020,and it focuses on spend the money. ing Fund or Drinking Water State helping local governments recover from "With CARES Act funding,cities Revolving Fund is eligible,but in most the impact of COVID-19. were reacting to COVID-19 and needed cases,money cannot be spent on new Quinn says the$102,000 Houston will cash flow immediately to meet unbudg- development.Soya says many cities receive will have a big impact in the town eted expenses;Soya says."Now,cities have asked about replacing roads, of 997 people."We have aging infrastruc- are able to be thoughtful "It PHOTO COURTESY CITY OF RED WING tore,and this will be huge,"she says. about how they use these N - _ . will benefit the community as a whole funds,in the way that's - r _, ,�.: .;c.: _ ' and keep a lid on our tax rates; best for their communities -1--':.a.,- o.- _ i a in the long term; —4 �'' _ amvN c qi How cities can use ARPA funds ARPA funding can be - _ �•-- Minnesota counties,towns,and cities spent in four areas: -7- will receive$2.13 billion in ARPA funds, a Response to the public "�''RE 2.= ..111111171.71--:"'s with$377 million going to local govern- health emergency and ..7 .. . ments with populations below 5o,000. the negative economic 111 Cities had to apply for the funds,which impact of the pan- Red Wing is considering investing some ofIts federal funding in the are being distributed on a per-capita demic.Direct COVID- city-owned ambulance service. 16 I JAN/FEB 2022 I MINNESOTA CITIES