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Home My WebLink About2023/05/26 - ADMIN - Agenda Packets - City Council - Regular AGENDA MAY 26, 2023 The St. Louis Park City Council is meeting in person at St. Louis Park City Hall, 5005 Minnetonka Blvd. in the council chambers located on 3rd floor. Members of the public can attend the meeting in person, watch by web stream at bit.ly/watchslpcouncil, or watch on local cable (Comcast SD channel 17/HD channel 859). You can provide comments on agenda items in person or by emailing your comments to info@stlouisparkmn.gov by noon the day before the meeting. Comments must be related to an item on the meeting agenda. Comments will be shared with the city council by providing copies for their review at the meeting. Public comments are generally not taken during study sessions. Recordings of city council meetings are available to watch on the city’s YouTube channel at https://www.youtube.com/user/slpcable, usually within 24 hours of the end of the council meeting or study session. 8:30 a.m. Special city council meeting 1. Call to order. a. Roll call. b. Pledge of Allegiance. 2. Approve agenda. 3. Presentations – none. 4. Minutes – none. 5. Consent items – none. 6. Public hearings – none. 7. Regular business. a. American Rescue Plan Act appropriation 8. Communications and announcements. 9. Adjournment. St. Louis Park Economic Development Authority and regular city council meetings are carried live on civic TV cable channel 17 and replays are frequent; check www.parktv.org for the schedule. The meetings are also streamed live on the internet at www.parktv.org, and saved for video on demand replays. If you need special accommodations or have questions about the meeting, please call 952.924.2505. Meeting: Special city council Meeting date: May 26, 2023 Action agenda item: 7a Executive summary Title: American Rescue Plan Act appropriation Recommended action: Adopt resolution appropriating remaining unobligated ARPA funds to replace lost revenue due to the COVID-19 pandemic. Policy consideration: Does the council support appropriating the remaining $2,640,131 in unobligated ARPA funds to provide government services, specifically public employee salaries and funding for software and contract services? Summary: In 2021 and 2022, the city received a total of $5,317,881 from the American Rescue Plan Act (ARPA). The city has reported to the U.S. Treasury that it will utilize these funds as replacement for lost revenue to provide general government services. The council has previously given direction for $3,194,750 to specific projects and spent over $844,000. This leaves $2,123,131 of unobligated funds. This number is subject to multiple assumptions about final expenditures needed for approved projects. In order to clearly convey to the Federal government the city’s expenditure plan and account for the aforementioned assumptions, staff recommends obligating the remaining ARPA dollars to public employee salaries as revenue replacement. Adopting a plan to spend ARPA funds on eligible projects and within the required timeline increases the security of the dollars and ensures the city can maximize the impact of this historic investment in local governments. Appropriating funds to public employee salaries does not preclude further discussion on broader city priorities as a part of the 2024 budget process. Financial or budget considerations: See report. Strategic priority consideration: Not applicable. Supporting documents: Budget Resolution Prepared by: Amelia Cruver, finance director Reviewed by: Cheyenne Brodeen, administrative services director Approved by: Kim Keller, city manager Special city council meeting of May 26, 2023 (Item No. 7a) Page 2 Title: American Rescue Plan Act appropriation Discussion Background The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program, a part of the American Rescue Plan Act (ARPA), delivered $350 billion to state, local, and Tribal governments across the country to support their response to and recovery from the COVID -19 public health emergency. Funds were dispersed directly to local government agencies to det ermine how best to allocate the funds. In 2022 and 2023, the city received a total of $5,317,881 ARPA funds. The city must appropriate these funds for specific purposes by December 31, 2024, and spend the funds by December 31, 2026. Treasury regulations stipulate how funds can be expended as well as restrictions on the use of the funds. The allowable expenditures are as follows: • Replace lost public sector revenue • Support the COVID-19 public health and economic response • Invest in water, sewer, and broadband infrastructure The option that allows the most flexibility is using the funds for the replacement of lost public sector revenue. This money can be spent on government services. This includes any service traditionally provided by a government. Some examples would include, but not be limited to: • Road building and maintenance and other infrastructure • Health services • General government administration, staff, and administrative facilities • Environmental remediation • Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles) The following are ineligible uses or restrictions on the funds: • Offset a reduction in net tax revenue – If taxes are cut during this period, the city must demonstrate how it paid for the tax cuts from sources other than ARPA • Deposit into a pension fund • Making debt service payments • Replenishing or building up fund balance • Satisfying settlements and judgments St. Louis Park has communicated to the U.S. Treasury that it will utilize all the $5,317,881 ARPA funds to replace lost revenue and has obligated $2,677,750 to specific projects that meet the criteria under the lost revenue category and these projects are outlined in this report. Recently members of the executive and legislative branches at the federal level have indicated a willingness to recall unspent or unobligated ARPA funds as a part of a broader effort to low er the national debt. This report outlines a plan to appropriate and spend the remaining funds to ensure that the city is not affected by any change in federal policy. Special city council meeting of May 26, 2023 (Item No. 7a) Page 3 Title: American Rescue Plan Act appropriation Additionally, this report provides a summary of decisions-to-date regarding ARPA funds, staff recommendations on how to efficiently appropriate the remaining ARPA funds in a manner aligned with the high-level plan for ARPA funds, and next steps to determine funding strategies for other city needs that have been a part of federal funding discussions at the city. Projects and programs previously directed by council The council has provided direction to expend ARPA dollars in a number of ways with flexibility to ultimately expend the dollars to maximize both ARPA and general fund revenue. Ultimately, ARPA dollars have been or are expected to be expended as follows: Project Total allocation Budget year(s) Vaccine incentives $2,750 2022 May 26 and June 3, 2022 watermain break recovery $ 1,500,000* 2022 and 2023 Various capital project investments $1,000,000 2023 and 2024 Hennepin County Social Worker $65,000 2023 Dakota Park Pedestrian Bridge $110,000** 2024 Internal service and customer support projects $517,000 2023 and 2024 *The program closes on August 1, 2023, and final dollar figures should be available in September 2023. **Council previously provided direction to expend $110,000 on replacing the Dakota Park Bridge. With the increase in total cost to $220,000, council directed staff to do further engagement to inform their decision on replacement or rerouting. This decision will come to the Council later this spring. If Council elects to reroute the trail rather than reinstall a bridge, a portion of the $110,000 could be used for another program or project. Estimated ARPA dollars remaining for future allocation After subtracting for previously allocated funds, staff estimates $2,123,131 of ARPA funds will remain once the final watermain break expenses are determined. This final number is subject to multiple assumptions: • Watermain break recovery program final expenditures • Final council decision on the Dakota Park Pedestrian Bridge • Final dollar amounts for internal service and customer support projects Any or all of these three items could utilize fewer ARPA dollars than previously obligated. Appropriating funds for public employee salaries does not preclude further discussion of previously considered projects. Decision making on these proposals and how to fund them can be done as a part of the 2024 budget process when the city has updated revenue, spending and cash balance information. Special city council meeting of May 26, 2023 (Item No. 7a) Page 4 Title: American Rescue Plan Act appropriation Decision needed St Louis Park has consistently communicated through its federal reports that it will be utilizing ARPA funds as revenue replacement but has not yet obligated all the funds. Given ongoing work to refine and respond to 2023 needs and plan for the 2024 budget, s taff recommends updating the reporting as follows, which will obligate all ARPA funds. For other projects previously under consideration for funding by the city with ARPA dollars, proposals and possible funding sources will be evaluated as a part of the 2024 budget process. Below is a summary of recommended ARPA obligations on May 26, 2023. This increases the security of the dollars and ensures the city can maximize the impact of this historic investment in local governments. May 26, 2023 ARPA obligation recommendations Vaccine Incentives $2,750 Watermain Break Recovery $1,500,000 Various Capital Project Investments $1,000,000 Hennepin County Social Worker $65,000 Dakota Park Bridge $110,000.00 Internal Service and Customer Support Projects $517,000 Pubic Employee Salaries $2,123,131 Total $5,317,881 Next steps: As previously directed, staff will bring refined information on one-time spending needs to the council as part of the budget process. As actual spending for all appropriated projects is known, adjustments may need to be made to this plan. The city will review these allocations as a part of the 2024 budget process and at other future dates as needed. Special city council meeting of May 26, 2023 (Item No. 7a) Page 5 Title: American Rescue Plan Act appropriation Resolution No. 23-____ American Rescue Plan Act Appropriation Whereas the City of St. Louis Park received a total of $5,317,881 from the American Rescue Plan Act (ARPA). Whereas the city must appropriate these funds for specific purposes by December 31, 2024. Whereas the city has reported to the U.S. Treasury that it will utilize these funds as replacement for lost revenue to provide general government services but has not appropriated all of the funds yet to date. Now therefore be it resolved by the city council of the City of St. Louis Park, that the American Rescue Plan Act fund Budget are adopted as presented. Project 2022 2023 2024 Total Vaccine Incentives 2,750 Watermain Break Recovery 1,500,000 Various Capital Project Investments 1,000,000 Hennepin County Social Worker 65,000 Dakota Park Bridge 110,000 Internal Services 517,000 Public employee salaries 2,123,131 Total $1,502,750 $1,582,000 $2,233,131 $5,317,881 Reviewed for administration: Adopted by the city council May 26, 2023 Kim Keller, city manager Jake Spano, mayor Attest: Melissa Kennedy, city clerk