August 21, 2021
The city council has formally accepted approximately $8.3 million in ARPA (American Recovery Plan Act) funding from the federal government.
Half of those funds have already been received by the city, with the second half to arrive no sooner than May 2022. The allocation was determined using the same HUD (Housing and Urban Development) formula that determines (Community Development Block Grant (CDBG) funding.
Like funding awarded by the CARES Act, the City of Lee’s Summit will be able to use the money for certain eligible expenses incurred by (or revenue losses resulting from) the COVID-19 pandemic. Unlike the CARES funding, however, which was administered via the county, this program will be administered directly by the United States Treasury.
The intent of the ARPA program is to continue mitigation of the fiscal effects of COVID-19, and it offers four primary categories of eligible spending, including response to COVID-19 and negative economic impact, premium pay for eligible essential workers, and necessary investments in water, sewer and broadband infrastructure.
Ryan Elam, director of development services, says the fourth category offers the city the most flexibility in how it can spend the funding: recouping revenue losses due to the pandemic. Using the Treasury’s formula to calculate lost revenue, Lee’s Summit saw a loss of about $5.8 million. Elam noted during his presentation that this formula is not in line with the city’s own lost revenue calculations but instead based on federal guidance.
City staff proposed that the council adopt a two-part spending plan for the $8.3 million allocated through ARPA: First, use the funding eligible under the “recouping revenue losses” category – the $5.8 million – in line with the city’s recent Ignite Strategic Plan, Ignite Comprehensive Plan and Consolidated Plan. Second, put the remaining $2.4 million in a COVID reserve.
“And what I mean by a COVID reserve is,” Elam said, “everybody knows the current situation with the pandemic is fluid. We don’t know exactly what the needs are going to be. We know that the response to COVID is eligible for these funds, and this provides a cushion there for us to be able to allocate some of those funds to that.”
He went on to explain that the lost revenue will be calculated at the end of each calendar year through 2024, likely creating additional opportunities for the city to allocate funding toward its own strategic goals.
Mayor Bill Baird asked for additional clarification about why so much funding was being recommended for the reserve. “I don’t want to come across the wrong way by sitting on this money,” he said.
Steve Arbo, city manager, explained that splitting the funding this way will give the city as much flexibility as possible in spending it, without having to preassign any money to any specific purpose or project before they have to.
The city council offered consensus on the project selection framework and voted unanimously to formally accept the ARPA funding from the Treasury. All councilmembers were present at the Aug. 17 session.
City staff will begin reviewing projects from the city’s strategic planning initiatives in accordance with the framework. Potential projects will be measured for conformance with ARPA requirements, strong and equitable recovery, amount of community impact, connection to strategic goals, and consideration of additional funding sources available. Staff will also note whether the projects will require one-time funding or ongoing expenditures. The council will then meet to discuss their options and consider prioritization of funding.