City Council Meeting - FINAL

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Meeting Date: 09/07/2021  
From: Rick Tadder, Management Services Director

Discussion and Direction: American Rescue Plan Act Local Recovery Funding 
Staff is seeking Council discussion and direction for allocating the American Rescue Plan Act (ARPA) Local Recovery Funding (LRF) of $13,252,816.00 which the City of Flagstaff will receive.
The City of Flagstaff will receive $13,252,816 in federal funding from the American Rescue Plan Act for State and Local Recovery Funds.  Until we receive final clarification from the US Treasury guidance, are reserving $4.5 million for potential revenue loss recovery and do not anticipate anything higher than that amount.  Staff and Council will focus on allocations of the remaining $8,752,816 for programs, services, and activities that the City would like to support with these funds.  Staff and the Budget Team have been reviewing the available uses for these funds and have developed a draft proposal for Council to consider and provide feedback and changes to the allocations.  
The American Rescue Plan Act (ARPA) for State and Local Recovery Funds (SLFRF) provides a substantial infusion of resources to help turn the tide on the pandemic, address its economic fallout, and lay the foundation for a strong and equitable recovery. The American Rescue Plan Act for State and Local Fiscal Recovery Funds provides substantial flexibility for each government to meet local needs—including support for households, small businesses, impacted industries, essential workers, and the communities hardest hit by the crisis. These funds can also be used to make necessary investments in water, sewer, and broadband infrastructure.

On May 10, 2021, the United States Treasury released an Interim Final Rule (IFR) related to the guidance for eligible use of ARPA funds. There was a 60-day comment period which closed July 16, 2021.  After reviewing comments, the Treasury will issue a Final Rule which may differ slightly from the previous rule. The release of the Interim Final Rule gave the City of Flagstaff more guidance to what we can use the funds for within our city and community.

The US Treasury is also releasing Frequently Asked Questions (FAQs) which provides further understanding of how cities can apply the Interim Final Rule. In addition, the US Treasury has created a Compliance and Reporting Guidance document which we are beginning to review.  A team of Stacey Brechler-Knaggs, Grants and Contracts Manager; Sarah Langley, Management Analyst; Morgan Mullaney, Grants and Contracts Specialist; Glorice Thousand, Accountant; and Rick Tadder, Management Services Director; has been participating in several educational opportunities and have discussed the ARPA funding with the Budget Team. 

In April at the Council Budget Retreat, staff estimated $9M in revenue losses that may be able to be recovered with the ARPA funding.  The combination of revenues exceeded budget and the guidance provided by the US Treasury required us to adjust those figures.  We are still waiting on the Final Rule to determine if any of the ARPA funds will be available for revenue recovery.  Currently, are reserving $4.5 million for potential revenue loss, leaving $8,752,816 to allocate to programs. The Budget Team has provided an initial draft proposal for utilizing the funding.  We will be seeking Council direction for adjustments to the Budget Team's proposal.  

For information, guidance, and frequently asked questions on the American Rescue Plan Act for State and Local Recovery Fund please visit the US Treasury website:

List of ARPA Local Funding Categories
Proposed Funding


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