The Coronavirus State and Local Fiscal Recovery Funds, a part of the American Rescue Plan, delivers $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. The City of Apple Valley has been allocated $5,647,258, of which the first half installment of $2,823,629 was received on July 6, 2021, and the second half installment is anticipated in July 2022.

The recently issued Final Rule on the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program provides substantial flexibility for each jurisdiction to meet local needs within the four separate eligible use categories. An overview of the Final Rule addresses the four eligible use categories ordered from the broadest and most flexible to the most specific.

Recipients may use SLFRF funds to:

• Replace lost public sector revenue, using this funding to provide government services up to the amount of revenue loss due to the pandemic. Recipients may use funds up to the amount of revenue loss for government services; generally, services traditionally provided by recipient governments are government services, unless Treasury has stated otherwise.
• Support the COVID-19 public health and economic response by addressing COVID-19 and its impact on public health as well as addressing economic harms to households, small businesses, nonprofits, impacted industries, and the public sector.
• Provide premium pay for eligible workers performing essential work, offering additional support to those who have and will bear the greatest health risks because of their service in critical sectors. Recipients may provide premium pay to eligible workers – generally those working in key economic sectors – who are below a wage threshold or non-exempt from the Fair Labor Standards Act overtime provisions, or if the recipient submits justification that the premium pay is responsive to workers performing essential work.
• Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand affordable access to broadband internet.

On January 6, 2022, the US Treasury issued the Final Rule outlining guidelines for the American Rescue Plan Fiscal Recovery Funds Program (ARPA). The guidelines go into effect on April 1, 2022, and provide expanded use of the funds. These final rules provide smaller governments (those that will receive under $10 million in ARPA funds) with greater flexibility in the way that the expenditures may be used and offer greater ease of reporting.

The final rule provides recipients, under the revenue loss category, the option to choose between two options for how to determine their amount of revenue loss, which may be especially helpful to smaller governments, like Apple Valley. They may elect a “standard allowance” of up to $10 million or they may calculate their actual revenue loss according to the formula in the final rule. The revenue loss replacement category is the most flexible spending category under the State & Local Fiscal Recovery Funds (SLFRF) and can be used for government services or any service traditionally provided by local governments offering streamlined reporting and maximizes the allowable use of their funds.

Following direction provided by the City Council at the informal council meeting on March 10, 2022, staff is recommending that the City utilize the the standard allowance calculation for revenue loss and using the funds for eligible government services which include;

• City-wide cybersecurity audit 
• Public Safety:
  • Expansion of the Community Impact Unit service in the Police Department
  • Video storage hardware and expanded storage capabilities
• Public Safety Infrastructure / Facilities:
  • Police Operational Support Facility / Garage additional Continuity of Operation capabilities
  • Improvements at Fire Station # 2 including storm water handling
• Public Works Infrastructure / Facilities:
  • Water Infrastructure Security throughout the water distribution system
  • Improvements at the Central Maintenance Facility 
  • Street and utilities improvements associated with the 133rd Street project
  • North Creek Greenway extension

Attached is an exhibit that outlines the proposed uses and allocated amounts. Also attached is the US Treasury Final Rule Overview for additional detail.