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MOUNDS VIEW Item No. 8.13 Meeting Date: February 27, 2023 Type of Business: Council Business City Administrator Review: City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 9705 Allocating American Rescue Plan Act Funding The City has received $1,456,076 in American Rescue Plan Act (ARPA) grant funding in 2021/2022. 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 the remaining $246,076 plus any accumulated interest for the provision of Public Safety in 2023. 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 provided final guidance so eligible expenses have not changed from preliminary guidance. Strategic Plan Strategy/Goal: Operate under a balanced budget that meets the needs and goals of the community. Financial Impact: $1,456,076 in grant funds, $728,038 in 2021 and $728,038 in 2022 to be spent in 2021 - $650,000, 2022 - $560,000, and 2023 - $246,076 for the provision of Public Safety. Conclusion Using public safety expenses would be the most efficient administratively. This provides the City Council with the greatest flexibility. This will complete the multi -year process in 2023. Respectfully Submitted, mMz Peer Mark Beer, Finance Director