CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Receive the report on the status of American Rescue Plan Act funds and direct staff to obligate funds to approved 2023 capital improvement projects
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Finance Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
In March 2021, the federal government passed the American Rescue Plan Act (ARPA) into law. This $1.9 trillion coronavirus relief package included $350 billion in direct assistance to state and local governments. These funds are intended to address the economic impacts of the pandemic and lay the foundation for a strong recovery.
The Coronavirus Local Fiscal Recovery Fund (CLFRF), established under ARPA, is the funding source for local governments receiving ARPA funds. The City of Naperville received a direct allocation of $13,308,689 through CLFRF. The first half of the funds were received in May 2021, and the second half in May 2022. The funds are held in a special revenue fund separate from other budgetary funds.
The United States Department of Treasury is the administrator and rulemaking authority over the CLRFR funds. The U.S. Treasury established clear rules for allowable fund uses and the timeline under which they must be used. All funds must be obligated by Dec. 31, 2024, with final expenses paid by Dec. 31, 2026. Any unspent funds must be returned to the U.S. Treasury.
The City has not spent any CLFRF funds; the entire $13,308,689 remains available.
DISCUSSION:
Staff first presented the City Council with a discussion on the CLFRF funds in June 2021. During that discussion, staff outlined the permissible uses of funding and offered several potential strategies for the City to consider when deciding how best to allocate the dollars. A point of emphasis was that these funds are a one-time revenue source. Fiscal best practice dictates that one-time revenues should be allocated to one-time expenses instead of creating new programs or se...
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