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MOUNDS VIEW City of Mounds View Staff Report Item No. 8.G. Meeting Date: December 13, 2021 Type of Business: Council Business City Administrator Review: To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 9510 Accepting and Allocating American Rescue Plan Act Funding The City has received $704,953 and $23,085 in American Rescue Plan Act (ARPA) grant funding in 2021 and will receive an additional distribution in 2022 of approximately $704,953. (Total $1,432,991) The funds need to be spent or dedicated by December 31, 2024. The guidance provided by the U.S. Treasury indicates that ARPA funds may be used to Support Public Health Expenditures, Address Negative Economic Impacts Caused by the Public Health Emergency, Replace Lost Public Sector Revenue, Provide Premium Pay, and Invest in Water, Sewer, and Broadband Infrastructure. We have projected lost revenue of $2,177,037, which is more than what is needed to satisfy the grant requirements, the funds only need to be spent on the provision of government services. This will provide the City Council with the greatest flexibility in expending the funds. Staff is recommending that the City Council designate up to $650,000 for the provision of Public Safety in 2021. We have already budgeted for the public safety expenditures so this will increase fund balance which will allow the City Council to use fund balance for other public purpose expenditures at their discretion. This will keep us under the Single Audit threshold which would add $3,500 - $4,500 additional costs to our annual audit. The US Treasury has not provided final guidance so some aspects could change and we will respond accordingly. Strategic Plan Strategy/Goal: Operate under a balanced budget that meets the needs and goals of the community. Financial Impact: $1,432,991 in grant funds, $728,038 in 2021 and $704,953 in 2022. Conclusion Using public safety expenses would be the most efficient administratively. The City Council would still have the flexibility to utilize the funds for other expenses. This will be a multi -year process. Respectfully Submitted, Ma r�z geer Mark Beer, Finance Director