Title
Recommended Uses for American Rescue Plan Funds
Action
Action:
A. Approve the use of $25,401,110.01 from the Coronavirus State and Local Fiscal Recovery Fund for government services to offset revenue lost as a result of the COVID-19 public health emergency, and
B. Adopt a budget ordinance appropriating $25,401,110.01 from the General Operating Fund to the American Rescue Plan Act Fund.
Body
Staff Resource(s):
Shawn Heath, City Manager’s Office
Explanation
§ This Request for Council Action will enable the city to fully obligate funds received from the federal government as a result of the American Rescue Plan Act of 2021 (ARPA).
§ As of November 15, 2024, of the original $141.6 million allocation, the city had expended $92.1 million and encumbered (i.e., obligated) $23.6 million; $25.9 million remains unobligated (unspent and unencumbered).
§ The deadline to obligate the city’s ARPA allocation is December 31, 2024, with a final deadline to expend the funds by December 31, 2026.
§ Of the $25.9 million that is currently unobligated, staff intend to obligate $520,000 by December 31, 2024, leaving $25,401,110.01.
§ To ensure that the city can invest this remaining $25.4 million in Charlotte and not return the funds to the federal government, staff have recommended expending these funds on government services to replace lost revenue. The $23.6 million that is currently encumbered will still be subject to the December 31 deadlines in 2024 and 2026.
§ By authorizing these actions, the city will satisfy the federal requirement that all $141.6 million in ARPA funds allocated to the City of Charlotte be obligated for eligible uses by December 31, 2024.
§ By authorizing ARPA to pay for government services typically paid for within the General Operating Fund, the General Operating Fund will realize $25.4 million in one-time expenditure savings.
§ A transfer in the amount of $25.4 million will be made from the General Operating Fund to the American Rescue Plan Act Fund so that the city has more time to obligate and expend these funds.
- $20.1 million has already been programmed by City Council including:
§ $5.95 million for Anti-Displacement programs,
§ $4.50 million for a multi-family affordable housing project developed by DreamKey,
§ $3.00 million tentatively planned for workforce development,
§ $2.71 million for digital inclusion,
§ $1.50 million for the faith-based affordable housing initiative, and
§ $2.38 million for economic development projects.
- $5.3 million that was previously programmed is now available for reallocation and redeployment by City Council.
Background
§ On March 11, 2021, in response to the COVID-19 public health emergency, President Biden signed the American Rescue Plan Act of 2021 (ARPA).
§ ARPA included the Coronavirus State and Local Fiscal Recovery Fund (SLFRF), which provided $130 billion in direct assistance for local governments to be used to mitigate the fiscal effects stemming from the COVID-19 public health emergency.
§ The SLFRF provides direct payments to metropolitan cities and counties. Charlotte was one of the 990 cities across the nation that met the criteria.
§ The U.S. Treasury Department released SLFRF funding to local governments in two equal installments. Charlotte received its first installment of approximately $71 million in May 2021 and the second installment in May 2022, for a total of $141.6 million.
§ Funds from the SLFRF may only be used to cover costs incurred by December 31, 2024, for the following purposes:
- To respond to the COVID-19 public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
- To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible city employees who are performing such essential work or by providing grants to eligible employers that have eligible workers who perform essential work;
- For the provision of government services to the extent of the reduction in revenue in the city’s budget due to the COVID-19 public health emergency relative to revenues collected in Fiscal Year 2019; and
- To make necessary investments in water, sewer, or broadband infrastructure.
§ Of the $115.7 million obligated or expended as of November 15, 2024, approximately 75 percent was allocated by City Council to community-facing investments such as investments in affordable housing, non-profit support, workforce development, advancing digital inclusion, supporting the small business ecosystem, and property tax relief.
Fiscal Note
Funding: American Rescue Plan Act (ARPA) Funds
Attachments
Attachment(s)
October 28, 2024, Action Review Presentation
Budget Ordinance